The Center for Public Integrity

Want to be an entrepreneur but also be certain you’ll have health insurance?

Good luck with that. You might seriously consider moving to Denmark or Canada. Those countries have not only achieved universal health care coverage for their citizens — coverage that’s not tied to employment — but they have also moved ahead of the U.S. in the Small Business Administration’s ranking of entrepreneurial performance worldwide.

Contrast that with our situation stateside. Many of America’s best and brightest are locked in soul-killing corporate jobs because of this country’s employer-based health care system. A lot of them undoubtedly would love to make a break from their corporate jails and start their own businesses. But they won’t —especially if there’s a family to support — because they fear losing health care benefits and not being able to find decent coverage on their own.

When it comes to recruiting the best talent, big corporations have a hefty advantage over small business owners in this country.  With hundreds and often thousands of employees, large firms can spread the risk of insuring their workers and offer coverage with richer benefits and lower premiums than small businesses. And most big employers are able to pay a larger portion of their workers’ premiums than small employers. Big companies that offer health care benefits also have historically enjoyed tax advantages that have not been available to small firms.

This is one of the reasons the U.S. Chamber of Commerce, which represents the interests of big business in Washington, was so adamantly opposed to the Affordable Care Act, which will begin to at least level the playing field for small firms.

On behalf of Grigor and Hilda Sarkisyan, I would like to invite Republican Rep. Phil Gingrey of Georgia to attend the 21^st birthday celebration of the Sarkisyans’ only daughter, Nataline, this coming Saturday, July 9, in Calabasas, Calif.

Gingrey could consider it a legitimate, reimbursable fact-finding mission. He clearly needs to have more facts about the U.S. health care system before he starts talking about death panels again.

Gingrey seems determined to keep alive the lie that the Affordable Care Act (a.k.a., Obamacare) will create government-run death panels in the Medicare program.

Sarah Palin started the death panel fabrication when she claimed during the health care reform debate that a proposal to allow Medicare to reimburse doctors for talking to their patients about advance directives would be tantamount to establishing death panels deep in the federal bureaucracy.  So many people believed her lie that Democrats felt they had no choice but to strip that provision from the final bill.

Taking a page from Palin’s playbook, Gingrey is now alleging, also falsely, that excising that provision didn’t do the trick, that the bill signed by President Obama still creates death panels somewhere inside the federal government. He says a new board created by Congress to look for ways to reduce Medicare spending would have to operate those panels. .

“Under this IPAB (Independent Payment Advisory Board)… that the Democrats put in Obamacare, where a bunch of bureaucrats decide whether you get care, such as continuing on dialysis or cancer chemotherapy, I guarantee you when you withdraw that the patient is going to die,” Gingrey said recently. “It’s rationing.”

No, Congressman, that’s not true. And I suspect you’re well aware that the charter creating the board forbids it to ration care.

One of my favorite bumper stickers reads, “If you’re not outraged, you’re not paying attention.”

That’s sort of how I feel about the health care debate. If more Americans paid attention to the fate of neighbors and loved ones who have fallen victim to the cruel dysfunction of our health care system, they would see through the onslaught of lies and propaganda perpetrated by special interests profiting from the status quo.  

Since I started speaking out against the abuses of the insurance industry, I have heard from hundreds of people with maddening and heartbreaking stories about being mistreated and victimized by the greed that characterizes so much of the profit-driven American health care system.

Many other people send me links to articles or broadcasts they have seen. When I worked in the insurance industry, we called them “horror stories,” and for good reason. The circumstances people often found themselves in were nightmarishly horrible. As an industry PR guy, my mission was to keep as many of those horror stories out of the media as possible.  We didn’t want the public to know.

It occurred to me recently that Americans are not sufficiently outraged because they either don’t hear these stories or, if they do, don’t believe how commonplace they are or that anyone they know could experience the same misfortune. Or they might hear that more than 50 million Americans don’t have insurance because they can’t afford it or, in many cases, can’t buy it even if they can afford it, but they don’t stop to think that real human beings make up that abstract 50 million figure.

The reality is that these stories are indeed commonplace. Almost all of us—regardless of our age, income, job or political affiliation—are just a layoff or plant closure away from being uninsured, or a business decision beyond our control from being underinsured, or an illness away from being forced into bankruptcy and homelessness.

More and more Americans are falling victim to one of the most insidious bait-and-switch schemes in U.S. history. As they do, health insurance executives and company shareholders are getting richer and richer.

This industry-wide plot explains how health insurers have been able to reap record profits during the recent recession as the ranks of the uninsured and underinsured continue to swell.

It also explains why the insurance industry and its allies are pulling out all the stops to kill a measure in the California legislature that could protect state residents from losing their homes and being forced into bankruptcy if they get seriously sick or injured.

On June 2, the California Assembly passed AB 52, a bill that would give state regulators the authority to reject excessive health insurance rate increases. Similar legislation has been introduced in other state legislatures, but nowhere are the stakes higher than in California—not only because AB 52 would allow the insurance commissioner to turn down requests for unjustifiably high rate hikes, but also because it would enable the commissioner to reject increases in deductibles as well. 

Over the past several years, insurers have been implementing a strategic plan to “migrate” (their term) all of their policyholders out of traditional indemnity and managed care plans into so-called “consumer-driven” plans, which feature high deductibles. They have been luring people into these plans by setting premiums for high-deductible plans lower than HMOs and PPOs, at least initially.

At first glance, these plans appear to be a good deal to a lot of people.  Not only are the premiums relatively more affordable, but also the deductibles usually appear to be manageable—again, at least at the outset.

If you haven’t gotten much of a raise lately, it’s probably because the extra money that might have been put in your paycheck instead went to your health insurer if you are enrolled in an employer-sponsored plan.

Many Americans haven’t seen a pay increase of any kind because their employers can’t both increase their wages and also continue offering decent health care coverage. It has become an either-or for people like Zeke Zalaski, a factory worker in Bristol, Connecticut, who hasn’t had a raise in years.

I met Zalaski during a stop at the state capitol in Hartford last year. He wasn’t there lobbying for legislation that would create a state-run “public option, ” as many others were that day. Unlike those citizen lobbyists, Zalaski was actually able to vote for the public option.  

Zalaski is a rarity in U.S. politics. He’s not a lawyer or small business owner or career politician. He’s a blue-collar worker who is also a Democratic state legislator, serving his fourth term. When he’s not in the capitol, he’s working as a “power-press setup guy” at a plant producing precision-engineered springs.

Zalaski, who is also president of his union, shocked me in revealing he hadn’t received a raise in five years. In fact, because he and his fellow workers are now paying a greater share of premiums and more out of their own pockets for coverage because of higher deductibles, they are actually taking home less today than they were in 2006.And they are far from alone. Most U.S. workers are in the same boat, even if they have been receiving modest pay increases.

According to the U.S. Census Bureau, American families have been losing ground financially over the last decade. The median household income in the U.S. in 2009 was $49,777. While that is 22.3 percent more than median of $40,696 in 1999, after adjusting for inflation the median is actually 5.3 percent lower than it was a decade before.  

The global consulting firm McKinsey & Company set off a firestorm when it released a report last week suggesting that 30 percent of U.S. businesses will stop offering health care benefits to their employees after most of the provisions of the Affordable Care Act go into effect in 2014.

The White House was quick to challenge the validity of the report, noting that McKinsey has so far refused to provide any details of the methodology used to reach its conclusion. All McKinsey will say is that its report was based on a survey of 1,300 employers and “other proprietary research.”

White House deputy chief of staff Nancy-Ann DeParle, who previously headed the president’s office of health care reform, called it an “outlier” and cited other studies predicting that that few if any employers would drop coverage because of the Affordable Health Care Act.

Congressional Republicans were just as quick to defend the McKinsey report, which they are citing as fresh evidence that the new federal law — crafted in part to protect the employer-based system — will have disastrous consequences.

Who’s right? Well, pardon the cliché, but only time will tell. What we can say with certitude right now is that the hubbub over the McKinsey report has obscured a reality neither side is acknowledging. What is indisputably true is that the employer-based system has been crumbling for several years. And, with or without the Affordable Care Act, it’s very possibly on its last legs. Repealing the law, as every GOP presidential candidate pledged to do during the debate in New Hampshire Tuesday night, would probably only hasten its complete collapse.

When I began working in the insurance industry in 1989, the vast majority of Americans — well over two-thirds of the population — got their coverage through employers. Just about every year since then, the percentage has been declining.

Of the many supporters of a single-payer health care system in the United States, some of the most ardent are small business owners who have struggled to continue offering coverage to their workers.

Among them are David Steil, a small business owner and former Republican state legislator in Pennsylvania who earlier this year became president of the advocacy group Health Care 4 All PA.

Another supporter is Vermont Gov. Peter Shumlin, who last Thursday signed a bill that sets the stage for the country’s first single-payer plan. If all goes as Shumlin and the bill’s many backers hope, all 620,000 Vermonters will eventually be enrolled in a state-run plan to replace Blue Cross, CIGNA and other private insurers whose business practices have contributed to the number of Vermonters without coverage—approximately 60,000 and growing.  

Both men told me last week that their feelings were shaped by their backgrounds.   Their experiences as businessmen convinced them that a health care system controlled by private insurers cannot be sustained, regardless of attempts to force those insurers to provide affordable access to care for all Americans. They are both skeptical that the Obama administration’s Affordable Care Act will provide the fix the country needs, even with the new regulations and consumer protections.

Steil, president and owner of a small manufacturing company in Bucks County, Pa., told me he grew increasingly frustrated about having no leverage in dealing with private insurers, which demanded double-digit premiums increases every year.

Shumlin, who along with his brother took over the management several years ago of a travel business their parents founded, echoed the same frustration. Shumlin, who also served as a legislator, shared another frustration with Steil: not being able to help political constituents, many of them farmers and small business owners, who called begging for help in finding coverage.