A Single-Payer Statewide Health System for All Illinoisans The Only Solution for Illinois Nicholas Skala Senior Research Associate Physicians for A National Health Program Co-Founder, Health Care for All Illinois

Illinois : 1.7 Million Uninsured Institute of Medicine 18 Illinoisans Die Every Week Due to a Lack of Health Insurance But simply helping them buy private insurance is not a solution.

Meet Thomas Wilkes Born in 2003 with Severe Hemophilia A. Born in 2003 with Severe Hemophilia A. Dad: Senior Engineer at a high- tech computer firm with good benefits. Dad: Senior Engineer at a high- tech computer firm with good benefits. 2004: Develops an inhibitor to his hemophilia treatment. 2004: Develops an inhibitor to his hemophilia treatment. $750,000 annual claims. $750,000 annual claims.

Private Insurance for Thomas Company faces 40% to 55% increase in premiums. Company faces 40% to 55% increase in premiums. Only insurer that will cover them requires $10,000 out-of-pocket and a $1 million cap. Only insurer that will cover them requires $10,000 out-of-pocket and a $1 million cap. Thomas is projected to reach the $1 million benefit cap in summer 2007 Thomas is projected to reach the $1 million benefit cap in summer 2007

Options for Thomas’ Family 1. Thomas’ father can quit the job he loves and go to work for a mega-firm that will take longer to be affected by high claims. 2. Thomas’ mother can stop raising the children and go to work for a mega-firm. 3. Thomas’ father can divorce his mother to leave her and Thomas legally destitute and eligible for public programs.

America’s Underinsured Proportion of Americans Going Without Care due to Costs, 2005 (skipping doctor visit, specialist appointment, treatment or prescription when needed) Source: Commonwealth Fund Biennial Health Insurance Survey, 2005

Medical Bankruptcy Illness and Medical Bills Contributed to 40,000 Personal Bankruptcies in Illinois in (Half of All Illinois Bankruptcies) Source: Himmelstein, Health Affairs 2005 (state estimates provided by author) Of those, more than three- quarters had insurance when they got sick. Insurance Status at Onset of Illness

Rising Costs = Less Benefits = Under/Uninsurance Proportion of Illinoisans Covered by Employer Insurance Source: US Census

Expansion of Public Programs: An SCHIP Math Problem! 8 Million Uninsured Kids (1995) 5 Million get coverage through SCHIP 5 Million more become uninsured + -

Expansion of Public Programs: A Zero Sum Game Source: U.S. Census Bureau Number of Uninsured Kids (0-18 yrs.)

What Does This Mean? Lesson #1: Simply Expanding Existing Private Insurance Policies Is Not a Solution. Current Private Insurance Policies Offer Inadequate Protection. Any Gains in Coverage Will Be Quickly Offset as Costs Rise and Employers Shed Benefits.

What Does This Mean? Lesson #2: Any Real Solution to the Health Crisis Must Do Two Things: 1) Offer Coverage More Comprehensive than that Currently Available on the Private Market. 2) Control Costs so that Benefits are Sustainable.

Life Expectancy, 2005 (Data in Years)

Infant Mortality, 2005 (Deaths in first year of life per 1,000 live births)

International Health Spending, 2005 U.S. Public Spending is Greater than Other Nations’ Public/Private Spending Combined Source: OECD 2007; Japan data are from 2004

Source:Agency for Healthcare Research and Quality MEPS Percent of health Care Costs 1% 1% 2% 4% 6% 13% 73% 0% 0% 0% If you were in an insurance CEO, who would you want to insure?

Source:Agency for Healthcare Research and Quality MEPS Percent of health Care Costs 1% 1% 2% 4% 6% 13% 73% 0% 0% 0% The Health and Profitable to the “Market,” the Sick and Poor to the Taxpayer Private Insurers Government Programs

Growth of Physicians and Administrators Source: Bureau of Labor Statistics and NCHS

One-Third of Health Spending is Consumed by Administration 31% Potential Savings: $350 billion per year Enough to Provide Comprehensive Coverage to Everyone Source: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services, 2004

Medicare Medicaid Payroll Tax Income Tax Single-Payer Health Care Fund $$$ Financing Single-Payer Bonus: Negotiated formulary with physicians, global budget for hospitals, increased primary and preventive care, reduction in unnecessary high-tech interventions, bulk purchasing of drugs and medical supplies = long term cost control.

Single-Payer Benefits Comprehensive Coverage for all medically necessary services (doctor, hospital, long-term care, mental health, vision, dental, drug, etc.) in a single-tier system. Comprehensive Coverage for all medically necessary services (doctor, hospital, long-term care, mental health, vision, dental, drug, etc.) in a single-tier system. Free Choice of doctor and hospital. Free Choice of doctor and hospital. Health Workers Unleashed from corporate dictates over patient care. Health Workers Unleashed from corporate dictates over patient care. Hospitals guaranteed a secure, regular budget. Hospitals guaranteed a secure, regular budget.

Only Two Paths to Reform 1. Preserve Private Insurance Companies and their Waste 2. Create a National Health Insurance System

Blagojevich: “Illinois Covered” Modest Expansion of Public Coverage (Expand Medicaid to destitute people up to 100% of poverty). Modest Expansion of Public Coverage (Expand Medicaid to destitute people up to 100% of poverty). Tax Credits to Buy Coverage (Those up to 400% of poverty will get subsidies, if people don’t buy plans the stat will probably force them to). Tax Credits to Buy Coverage (Those up to 400% of poverty will get subsidies, if people don’t buy plans the stat will probably force them to). State Risk Pool (Pool uninsured, ostensibly to bargain down health costs). State Risk Pool (Pool uninsured, ostensibly to bargain down health costs).

Single-Payer CoverageBenefits Coverage Method Costs / Savings Sustainability Blagojevich Plan All Illinois Residents Covered As many as two-thirds of uninsured stay that way. Full coverage for all medically necessary needs Full coverage for all medically necessary needs. Skimpy policies which restrict access and protection. Expand Medicare to all Illinoisans. If they don’t buy insurance, punish them. Redirect >$17 billion in waste; no net cost increase. Raise $2.1 billion to waste on private insurers. Effective cost control to ensure sustainable benefits. Gains in coverage quickly erased by rising costs.

“Individual Mandate” “Let them buy insurance.”

Criminalizing the Uninsured: A Massachusetts Punitive Index # The Crime The Fine 1 Violation of Child Labor Laws $50 2 Illegal Sale of Firearms, First Offense $500 max. 3 Driving Under the Influence, First Offense $500 min. 4 Domestic Assault $1000 max. 5 Cruelty to or Malicious Killing of Animals $1000 max. 6 Communication of a Terrorist Threat $1000 min. 7 Being Uninsured* $1500 min. *Note: Original version of House Bill would have suspended individuals’ driving licenses for uninsurance as well.

Subsidy and Individual Mandate Schemes Substandard Coverage: forces the uninsured to buy defective insurance industry products that are already causing families to face bankruptcy and go without needed care. Substandard Coverage: forces the uninsured to buy defective insurance industry products that are already causing families to face bankruptcy and go without needed care. Unaffordable: Without the savings achievable with single-payer, taxes must raised or funds diverted from other needy programs. Unaffordable: Without the savings achievable with single-payer, taxes must raised or funds diverted from other needy programs. Micro-coverage, Macro-costs: Preserves wasteful private insurers and adds yet another layer of state administrative waste. Rather than provide care to the uninsured through a relatively efficient program like Medicare, the plan launders tax dollars through wasteful private insurers. Micro-coverage, Macro-costs: Preserves wasteful private insurers and adds yet another layer of state administrative waste. Rather than provide care to the uninsured through a relatively efficient program like Medicare, the plan launders tax dollars through wasteful private insurers. No Realistic Cost Control: Any gains in public coverage will be unsustainable due to rising costs. No Realistic Cost Control: Any gains in public coverage will be unsustainable due to rising costs.

“Sounds Great, but it’s not politically feasible” 2/3rds of population want it Many (probably most) physicians want it Business community is now realizing the need for it

Single-Payer: Glen Barton Former CEO, Caterpillar Inc. (Fortune 100) Past Chairman, Health and Retirement Task Force Business Roundtable Represents 150 Largest Employers Total Assets: $4.0 Trillion “The quickest and simplest solution… is to go to a single-payer system” - Written Testimony to AHCTF, Feb

“If done right, health care in America could be dramatically better with true single-payer coverage.” - Ben Brewer, WSJ, April 18, 2006 “[single-payer] is an idea that's so easy to slam politically yet so sensible for business that only Republicans can sell it! …it may take a Republican President to bless the socialization of health spending we need.” -Matt Miller, Fortune, April 18, 2006 “Think, as a small business, how you could benefit from a single-payer system: you wouldn’t lose potential employees to larger firms that offer more attractive health benefits; health insurance costs would cease to be a line item in your budget. A serious illness befalling you or an employee wouldn’t be a company- wide financial crisis. You might even save money.” -Joseph Antony, CNBC / MSN Money, Winter 2003 CNBC / MSN Money

“A Step Towards Universal Coverage” or The Definition of Insanity? Other States That Have Taken “Steps” Hawaii (1974)82,000116,000 Massachusetts (1988)494,000617,000 Oregon (1989)400,000578,000 Tennessee (1992)687,000835,000 Minnesota (1992)350,000430,000 Maine (2003)133,000142,000 Uninsured 2005Uninsured at Time

Is “The Perfect the Enemy of the Good?” The Radical and the Republican “Many of Lincoln’s admirers have painted him as a man who wanted exactly what the abolitionists did but cannily waited for a perfect moment to achieve it. [In fact], radicals like Douglass set an agenda Lincoln gradually adopted as his own. Without abolitionists, there would have been no Lincoln.” - James Oakes, Historian, UC Berkeley

Single-Payer: “Politically Feasible?” Abolition of Human Slavery (1600s) Women’s Suffrage Movement ( ) Civil Rights Act (1964) Other “Politically Infeasible” Movements