FCL NEWSLETTER -- February, 2003

California's Health Care Crisis Prompts a Second Look at Single Payer
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Health Care Resources
People of Faith Speak Out on Universal Health Care
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California's Health Care Crisis Prompts Second Look at Single-Payer System

FCL supports the fundamental right of individuals and communities to strive for optimal physical health. Basic to that goal are: a healthy environment; access to nutritious and unpolluted food, air and water; adequate clothing and shelter; and full access to health services when required. Our first priority is the promotion of policies which ensure that no person or community be deprived of these basic necessities.? ? FCL Policy Statement H-1 (emphasis added)

It may seem strange to our readers that we should be talking about health care reform at a time when the state is facing a budget deficit in the neighborhood of $30 billion. We could hardly fault you for thinking we lack perspective. The budget crisis underlies just about everything that happens in the Capitol these days. But while the state suffers from a shortage of money, a sense of common purpose and shared destiny are even more lacking these days in Sacramento and elsewhere. Human needs are easily reduced to mere statistics. Compassion and practicality often take a back seat to ideology. The state?s budget crisis, however, demands a serious look at health care policy and creates an opportunity for lawmakers to fashion creative proposals that move us to universal coverage.

Fortunately, some lawmakers in Sacramento are seeking solutions to California?s escalating health care crisis. FCL is supporting Senator Sheila Kuehl?s (D., Santa Monica) upcoming proposal to overhaul the state?s patchwork of private and public health care into a single-payer system that will insure all Californians. (The bill is still being drafted as we go to press.) Under Kuehl?s proposal, health care providers would remain private and the state would function as the insurance company. Other members are proposing reforms that retain the status quo with an expanded role for the state to reduce the numbers of uninsured. Senator Jackie Speier (D., Hillsborough) has introduced SB 2, which would require employers to offer each employee health care coverage. Assemblyman Keith Richman?s (R., Northridge) AB 30 would tax HMO premiums to expand coverage for the uninsured who earn up to 250 percent of the Federal Poverty Level, or $45,250 for a family of four.

While FCL supports all efforts to expand health insurance coverage, incremental reforms leave too many Californians without coverage and fail to contain health care costs. Health insurers and managed care providers would still offer coverage to only the healthiest, while those with pre-existing medical conditions and the economically disadvantaged would be left to the public sector. Neither the state nor the federal government is currently willing to increase spending for those who lack coverage. A single-payer system, however, will cover all Californians for less money than is currently spent on health care.

Large Numbers of Uninsured

There are now 6.5 million Californians without any health insurance, 70 percent of whom work mostly in low- paying service industry jobs with no health insurance benefits. Ten million Californians have no prescription drug benefits. A disproportionate share of the uninsured are racial minorities. Though the U.S. spends a larger share of its gross domestic product (15 percent) on health care than any of the industrialized countries, there are over 40 million Americans without health insurance. Family members with household incomes over $75,000 are the largest group of the newly uninsured.

While employers are still the largest health insurance provider, a growing number are finding the costs prohibitive. Even during the so-called ?boom? years of the mid- to late 1990s, the numbers of uninsured continued to increase nationally as most job growth was in small businesses that are less able to afford health insurance coverage for their employees. Between 1989 and 1996, the average amount employees paid for health care jumped from $935 to $1,778 per year. Many employees do not take advantage of their employer?s health insurance plans because they cannot afford the employee?s contribution, yet they earn too much to qualify for Medi-Cal and Healthy Families.

Spiraling Costs

California once enjoyed the reputation as a leader in managed care with fewer hospital visits and lower health care costs than other states. In recent years, the state?s overall health care costs are increasing at rates that are among the highest in the nation, and its hospitalization costs are rising at nearly double the national rate. Health insurance premiums are rising 15 percent per year, more than seven times the rate of inflation. The California Public Employees Retirement System, the nation?s second largest purchaser of group insurance, will raise health care premiums by a staggering 25.1 percent in 2003. Health care experts point to several key factors that are driving up costs:

Cost-shifting: The uninsured typically cannot seek treatment until conditions become severe. As a result, they often require expensive hospitalization that would be avoided with access to primary care. As emergency rooms become the primary health care provider for the uninsured, and as providers takes losses on government programs like Medi-Cal, hospitals shift theses costs to those who currently can pay: businesses, employees and taxpayers. One way or another, everyone pays.

Prescription drugs: Prescription drug prices are rising faster than any other health care component. Americans pay 64 percent more than Canadians for the same prescription drugs. Fueled by advertising, pharmaceutical companies are making huge profits on sales of ?designer? drugs.

Profits: In the mid- to late 1990s, most managed care providers and health insurers lost money and are now making up for those losses by raising premiums. Nationwide, HMOs reported a 162 percent increase in profits during the first quarter of 2002 compared to 2001. The Sacramento Business Journal reported that the four largest non-profit HMOs serving the Sacramento area saw their combined income (after expenses) rise 61 percent during the first nine months of 2002, compared to 2001.

Shifting demographics: As the baby boom generation ages, increasing numbers of older patients will require more health care services.

Shrinking Safety Net

In the public sector, the governor has proposed reinstating quarterly reporting and stricter eligibility requirements for Medi-Cal. The California HealthCare Foundation, an organization that advocates for universal health care, says these requirements would reduce the number of insured Californians by 550,000 people. By default, hospital emergency rooms would become their primary care provider in the event of a severe illness. The governor has also proposed reducing Medi-Cal provider payments by 15 percent, which would result in fewer doctors willing to take Medi-Cal patients.

According to the California Medical Association, 60 emergency rooms in the state closed due to fiscal insolvency between 1990 and 2001. As the numbers of uninsured continue to grow, emergency rooms will be further strained to provide services. A shortage of emergency rooms means that everyone who requires emergency room treatment, rich or poor, may be severely affected. Paramedics often must scramble for local emergency rooms that are fewer and farther between. A shortage of emergency rooms makes all Californians vulnerable in the event of a major calamity.

In Los Angeles County, residents voted to raise their property taxes to keep public clinics and hospitals open. Sixteen public clinics have closed, but proposed closures of Harbor-UCLA and Olive View-UCLA Medical Centers were avoided. The Bush Administration turned down a request from Governor Davis for federal money in the form of waivers. A request by state governors to increase the federal government?s share of Medicaid funding was also denied.

The health care crisis is snowballing. The high costs of health insurance and the shrinking safety net leads to a growing number of uninsured who therefore utilize the most expensive modes of treatment. These costs are then borne by those who currently have health insurance in the form of higher fees for services and higher premiums, which eventually leads to larger numbers of uninsured.

A Sane Solution: the Single-Payer System

In 1999, SB 480 (Solis) required the Department of Health and Human Services to report to the Legislature the findings of a study by the University of California on how to achieve universal health care for California. The Health Care Options Project detailed nine options for achieving universal health care. Of these options, only the three single-payer plans offered universal coverage.

A single-payer system would streamline administrative costs, which currently account for about 25 cents of each health care dollar, by consolidating all public and private health plans into one. The state would realize huge savings from the bulk purchases of pharmaceuticals and durable medical goods, and the savings would go toward expanded services. Linking spending increases to increases in gross domestic product would contain health care costs.

By realizing economies of scale, a single-payer system can provide universal coverage and an expanded benefit package for less than the total amount currently spent on health care in California. Regardless of the actual cost savings, a single-payer system is the surest way of obtaining universal health care. FCL urges policymakers to remember that access to health care is a basic human need that cannot be adequately expressed in terms of dollars and cents.

WHAT YOU CAN DO

In a speech to the United States Senate, the late Senator Paul Wellstone said of the Clinton Adminis-tration?s universal health care proposal ?[T]he only way we could have beaten the health care industry would have been with dramatic and effective citizen politics. It never happened . . . the Administration never asked the American people to take on this fight.?

Enacting universal health care legislation will require a large citizen lobbying effort. Contact FCL if you and/or your organization are willing to participate in a large grass roots effort that will move our state towards a more humane health care system.
- Jim Lindburg

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Health Care Resources

Results of the University of California Study The State Health Care Options Project http://www.healthcareoptions.ca.gov/

The State of Health Insurance in California: Recent Trends, Future Prospects UCLA Center for Health Policy Research 10911 Weyburn Aveunue, Suite 300 Los Angeles, CA 90024 (866) 275-2447 (toll free) http://www.CHIS.ucla.edu

The Henry J. Kaiser Family Foundation 2400 Sand Hill Road Menlo Park, CA 94025 (650) 854-9400 http://www.kff.org/

Physicians for a National Health Program 29 East Madison St. Suite 602 Chicago, IL 60602 (312) 782-6006 http://www.pnhp.org/

Health Care Crisis Glossary of Terms http://www.pbs.org/healthcarecrisis/glossary.htm

Universal Health Care Action Network 2800 Euclid Ave. Suite 250 Cleveland, OH 44115-2418 (800) 634-4422 http://www.uhcan.org/files/about/about.html

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People of Faith Speak Out on Universal Health Care

Of all forms of inequality, injustice in health care is the most shocking and inhumane.

--The Reverend Dr. Martin Luther King, Jr.

To be without health insurance in this country means to be without access to medical care. But health is not a luxury, nor should it be the sole possession of a privileged few. We are all created b?tzelem elohim ? in the image of God ? and this makes each human life as precious as the next. By ?pricing out? a portion of this country?s population from health care coverage, we mock the image of God and destroy the vessels of God?s work.

--Rabbi Alexander Schindler, Past President, Union of American Hebrew Congregations [1992]

Every person has the right to adequate health care. This right flows from the sanctity of human life and the dignity that belongs to all persons, who are made in the image of God... Our call for health care reform is rooted in the biblical call to heal the sick and to serve ?the least of these,? the priorities of justice and the principle of the common good. The existing patterns of health care in the United States do no meet the minimal standard of social justice and the common good.

--Resolution on Health Care Reform, U.S. Catholic Bishops [1993]

The health of a society is truly measured by the quality of its concern and care for the health of its members. . . The right of every individual to adequate health care flows from the sanctity of human life and that dignity belongs to all human beings. . . We believe that health is a fundamental human right which has as its prerequisites social justice and equality and that it should be equally available and accessible to all.

--Imam Sa?dullah Khan, The Islamic Center of Southern California

Reprinted from The Faith Project, Universal Health Care Action Network

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Planned Giving for a Better Future with FCL

An important ongoing part of our fundraising efforts is encouraging supporters to consider Planned Giving contributions that have lifetime benefits for donors and strengthen the long-term financial foundation of our work for a more just and peaceful world.

Gifts to the FCL Education Fund (EF) are tax deductible. You don?t have to be ?wealthy? to make a meaningful gift. For more information, please contact the FCL office at (916) 443-3734. Here are some of the options available:

A Charitable Remainder Trust provides the donor and survivor with an assured income for life, as well as favorable tax consequences. Contributions to the EF?s Pooled Income Fund are invested, with the annual income shared among donors and their beneficiaries

A Life Estate Gift of your property, which allows you to continue to use it and receive a tax deduction

Your permanent or revocable gift of Life Insurance

Bequests through a will support a legacy of your values at work

Designating the EF as a beneficiary on your Retirement Plan

Current Gifts through cash, securities or closely held stock

Through a Charitable Gift Annuity, the donor is assured of fixed income payments for life.

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