Letter from the US: Obama's health care a boon for big business

In a split decision the United States Supreme Court largely upheld the health insurance law, the Affordable Health Care Act, passed by Congress and signed by President Barack Obama.

The key provision upheld by the nine robed reactionaries in a five-to-four split decision mandated that all US citizens have to buy health insurance from the private insurance companies beginning in 2014, or pay a penalty.

This approach was originally proposed decades ago by right- wing think tanks as an alternative to national health insurance for all.

In fact, a similar law was passed by Massachusetts when Republican presidential candidate Mitt Romney was governor of that state. Now Romney and the conservatives denounce the same thing applied to the whole country as “Obamacare.”

This shows how far capitalist politics has moved to the right. What was originally a far-right proposal is now embraced by the Democrats and Obama, while the same far right has moved so far to the right that it labels its own proposal as “socialism.”

The law entrenches control over how health costs get paid in the hands of the financial capitalists who brought us the new depression that began in 2007.

There is one exception in the law. This is the Medicare program, which is a form of national health insurance for people over 65. It has loopholes, which gouge the elderly, but it is at least something.

Since Medicare isn’t run for profit, its overhead costs are about 3% of its budget. By contrast, the insurance companies grab about 30% of the premiums paid to them.

The insurance racket has high administrative costs. This is because one of the main tasks of its bloated bureaucracy is to ferret out who has “already existing” health problems so they can be denied insurance, refuse payment to people who failed to fill out forms properly, and find other ways to “cut costs”.

Then there are the billions of dollars the insurance companies pay their stockholders and the bloated millions in “salaries” for chief executives.

Given that people over 65 have more health problems than younger people, legitimate administrative costs for Medicare are higher than for private insurance companies. Yet the private companies spend far more on their bureaucracies.

The law does have some positive provisions. One already in effect is that children of parents who have coverage are included under their parents' plans up to the age of 26.

Another is the requirement that, after 2014, insurance companies stop the practice of denying people coverage for pre-existing conditions.

But in the negotiations leading up to the drafting of the law, the insurance companies demanded they be compensated for the reduction in profits they would “suffer” if they are banned from excluding people.

The result was the mandate that everyone had to buy private insurance, either as individuals or through employer-sponsored plans, which in effect comes out of wages. Thus, insurance companies will reap a huge increase in clients.

Those too poor to buy insurance would supposedly be able to get help with their premiums from government subsidies. These would, in all likelihood, be sub-standard policies, with inadequate coverage and out-of-pocket expenses.

But even this is in doubt. In a different five-to-four vote, the Court gutted a provision in the law that would have had states expand Medicaid coverage for the very poor. Medicaid is supposed to help out the poor younger than 65, but leaves much to be desired.

The court ruled that states can opt out of the law’s provision that they expand Medicaid to insure those below the poverty line, even though the federal government would subsidise the states doing so. Already, some of the most right-wing state governments say they will opt out.

The law provides federal subsidies for individuals above the poverty line, defined as US$23,000 before taxes for a family of four.

But the law assumed that the states would expand Medicaid, with the federal government footing the bill, for those below that line. The latter category includes about 17 million of the 50 million uninsured.

So in those states that refuse to expand Medicaid, the poorest will still have no insurance because they are below the poverty line and ineligible for the federal insurance subsidies.

Romney is running on the promise to repeal the law in its entirety. The Republicans play on fears of the better off that somehow they will have to pay for insurance for the poor, especially people of colour.

If the Republicans win the elections, it’s not clear what they would put in its place. Some features of the present law, such as prohibiting denial of insurance for prior conditions, are popular.

In spite of the fact the law is favorable to insurance companies, the Republican right wants to further the ideological agenda of opposing any idea that society as a whole has a responsibility for its citizens’ welfare.

They also play on fears that any reform, especially any rise in Medicare and Medicaid, will drive up healthcare costs.

It’s not only big finance capital through health insurance that is driving up health costs. Pharmaceutical corporations have their snouts in the trough too, as do the hospitals and many (though not all) doctors.

As cost go up, the quality of health care in the US remains below in comparison not just to other “advanced” (imperialist) countries, but many others as well.

One measure of the quality of health care for the whole population, not just the rich, is infant mortality. This is measured in the number of deaths of babies up to one-year-old per 1000 births.

By this measure, the CIA ranks the US 49th in the world. Nations with a lower infant mortality rate include: Japan, Sweden, Iceland, Italy, Spain, France, Finland, Norway, Germany, the Netherlands, Ireland, Switzerland, Israel, Austria, Belgium, Luxembourg, Australia, Britain, Portugal, New Zealand, Canada and Greece.

Japan is number one, with a rate of 2.21. The US comes in at 5.98.

Cuba, subjected to a US economic blockade for more than six decades, beats the US with a rate of 4.83.

These are averages for the whole population. For the years 1995 to 1998, the disparities between Blacks and whites were as follows: Atlanta, 14.6 for Blacks and 6.7 for whites; Boston, 10.0 to 4.8; Chicago, 17.6 to 7.0; New York city, 12.1 to 4.5; Philadelphia, 16.6 to 6.7; Pittsburgh, 18.6 to 5.9; San Francisco, 12.3 to 2.6.

For the same years in largely Black Washington DC, the figure was 17.5 for Blacks, just a shade better than Sri Lanka, ranked 70th in the world.

It would be safe to assume a similar disparity by income among all races.

This grotesque failure for the richest country in the world underlines the task ahead of us. We can’t remain trapped between the right (Democrats) and the far right (Republicans).

We must redouble our fight for national health insurance for everyone. This is being encapsulated in the slogan “Medicare for all”.

Winning this would be a stepping stone to demand that the profit system be taken out of health care altogether.

[Barry Sheppard was a long-time leader of the US Socialist Workers Party. He recounts his experience in the SWP in a two-volume book The Party the Socialist Workers Party 1960-1988, available from Resistance Books.]



So many excellent examples of thriving national health services exist around the world, and have been functioning brilliantly for years. It's hard to believe that Americans seem to have no knowledge of this. They seem to agonise over some faulty model and then reject the obvious when it's staring them in the face. Americans should look over the fence occasionally, they might find there's a whole world out there!
I dont understand it !!! Developing countries seem to have no issues with healthcare. But in US it just the opposite. Is the world's strongest economy falling short of providing basic needs to its people ? Something is wrong somewhere.. - Tracy McManamon