How Insurers Obscure Healthcare Costs And How to Get Past That

How Insurers Obscure Healthcare Costs (Un-covered) — “As any magician will tell you, you can obscure what you don’t want people to notice by using a technique they’ve used forever: misdirection. Insurers want you to look at the fingers pointing away from them, not at the ones picking your pocket. An important goal of the industry’s misdirection is to keep customers and other important people from asking a question you’d think would be obvious: If insurers can’t do much about those ‘key drivers’ other than to point them out and complain about them, what, exactly, is the industry’s ‘value proposition’?”

By Wendell Potter

A couple of years before I left Cigna, I was in a leadership meeting that was typically uneventful until someone asked Ed Hanway, the CEO at the time, what kept him up at night.  

 “Disintermediation,” Ed said, without a second of hesitation. For those not familiar, that’s the technical term for “cutting out the middleman.”  

He went on to explain his worry that someday, America’s big employers would start questioning health insurers’ value proposition and view them as just that— unnecessary middlemen.  

Hearing this, I immediately perked up because as head of corporate communications, one of my major job objectives was to keep the public convinced that private payors play an essential role in our healthcare system and that the status quo is nothing to tinker with.  

Ed retired not long after that and is now probably sleeping well, but today’s CEOs undoubtedly are concerned that the “someday” Ed worried about might be close at hand. You can be certain they’re well aware that the big, self-insured customers they care most about are not happy with how insurers are managing their—and their employees’—money.    

A big part of my work back then was to point the finger of blame for rising healthcare and health insurance costs at everybody else, not us. I never missed an opportunity to talk about what we called the “true drivers” (or “key drivers”) of medical inflation. The guilty parties—in my telling— were greedy doctors, drug and medical device companies and big hospital systems that charged too much and kept jacking up their prices. Also among the guilty, I’d hasten to add, were regular folks who go to the doctor too much and overuse the healthcare system.  

The finger-pointing preceded my time in the industry, and it continues to be a central element of payors’ messaging strategy. That’s because it works. As any magician will tell you, you can obscure what you don’t want people to notice by using a technique they’ve used forever: misdirection. Insurers want you to look at the fingers pointing away from them, not at the ones picking your pocket.  

An important goal of the industry’s misdirection is to keep customers and other important people from asking a question you’d think would be obvious: If insurers can’t do much about those “key drivers” other than to point them out and complain about them, what, exactly, is the industry’s “value proposition”? 

To keep members of Congress in particular from asking that question, insurers have pressed one of their big trade groups, America’s Health Insurance Plans (AHIP), into service. To add credibility to the work, AHIP has enlisted the support of a long-time messaging partner: the big accounting/consulting firm PricewaterhouseCoopers (PwC).  

The AHIP/PwC team has produced several official-looking “policy briefs” over the years as well as a nifty graphic that pops up in the form of billboard ads in Washington D.C.’s Metro stations whenever lawmakers start making noise about health insurance reform.  

The graphic is a colorful dollar bill marked up to ostensibly answer the question: Where does your healthcare dollar go? 

If you look at how that graphic has changed over time, you’ll notice that some of the categories swell while others shrink. A bigger chunk of our premium dollar now goes to buying prescription drugs—21.5 cents now compared to 14 cents in 2012 (when I wrote about how insurers tried to fool Congress with fuzzy math)—according to AHIP/PwC. The higher drug spend is not necessarily surprising when you consider that many medications are quite expensive. Because these drugs are likely keeping more people out of the hospital, reducing the overall cost of care, this isn’t without some benefit to patients. To insurers’ delight, the growth in spending on prescription medications is why lawmakers have drug makers, and not them, in their sights at the moment. 

If you’re wise to what AHIP and PwC are up to, you’ll notice how they now cleverly break into pieces the portion of the dollar insurers grab and keep for themselves and their shareholders. You have to go to the trouble of adding up those pieces to see that close to a fifth of our premium dollars goes not to keeping us well but to covering insurers’ profits, taxes and overhead expenses. When you compare the 2021 version of AHIP/PwC’s chopped up bill to the 2012 version, you’ll see that insurance companies are getting more of your dollar than they did in 2012. 

Some employers appear to be catching on to the industry’s sleight of hand and could be on the verge of publicly questioning insurers’ value proposition. A recent survey of CEOs of several big companies, conducted by the Kaiser Family Foundation and the Purchaser Business Group on Health (PBGH), showed that a huge majority say the expense of the current system is not sustainable for their businesses, not even in the short term. Not only are they sick and tired of devoting more and more of their revenues to health insurance premiums, but they also hate having to saddle their employees with insurers’ out-of-pocket requirements, which are now far beyond what many workers can afford.  

A few weeks after that survey was released, PBGH and the Colorado Business Group on Health (CBGH) announced a partnership to find ways for their member companies to contract directly with hospital systems and disintermediate the middleman, as Boeing has been doing with considerable success for a few years now. That will only work for employers with a lot of workers in one market, but many of PBGH’s and CBGH’s member companies are big enough to pull it off. Meanwhile, the consulting firm Health Rosetta is helping employers of all sizes reduce their healthcare costs and improve employee health and satisfaction by sidelining the middleman in various ways.  

These developments undoubtedly are more than a passing concern for health insurance CEOs and their PR people. You can be certain that the possibility of disintermediation catching on is one of the reasons insurers’ growth strategy has shifted from buying smaller competitors to buying physician practices and clinics and merging with pharmacy benefit management companies and retailers. They see the writing on the wall and are rushing to diversify, in part by becoming healthcare providers themselves. 

But don’t expect the industry’s misdirection machinery to grind to a halt anytime soon. Congress will eventually set its sights on payors again. When that happens, you’ll be seeing AHIP/PwC’s dollar bill all over Washington D.C. again.  

Wendell Potter is a former health insurance executive, New York Times bestselling author, health care and campaign finance reform advocate, and authority on corporate and special interest propaganda. He leads two health care reform advocacy nonprofits: the Center for Health and Democracy and Business Leaders for Health Care Transformation, and is the founder of, a nonprofit journalism organization.


The United States is one of the richest countries in the world, yet its poverty rates are higher and its safety nets are far weaker than those of other industrialized nations. It is also the only large rich country without universal health care. In fact, as Noam Chomsky argued in Truthout, the U.S. health system is an “international scandal.”

Why is the U.S. an outlier with regard to health care? What keeps the country from adopting a universal health care system, which most Americans have supported for many years now? And what exactly is Medicare for All? On the eve of scheduled marches and rallies in support of Medicare for All, led by various organizations such as the Sunrise Movement, Physicians for a National Health Program, the Democratic Socialists of America and concerned citizens throughout the country, the interview below with Peter S. Arno, a leading health expert, sheds light on some key questions about the state of health care in the United States.

Peter S. Arno is senior fellow and director of health policy research at the Political Economy Research Institute at the University of Massachusetts-Amherst, and a senior fellow at the National Academy of Social Insurance. Among his many works is his Pulitzer Prize-nominated book, Against the Odds: The Story of AIDS Drug Development, Politics & Profits.

C.J. Polychroniou: U.S. health care is widely regarded as an outlier, with higher costs and worse outcomes than other countries. Why are health care expenditures in the U.S. significantly higher than those of other industrialized countries? And how do we explain poor health outcomes, including life expectancy, compared to most European nations?

Peter Arno: The short answer as to why the U.S. has the highest health care expenditures in the world is simply that, unlike other developed countries, we exercise very few price constraints on our health care products and services, ranging from drugs, medical devices, physician and hospital services to private insurance products. On a broader level, the corporatization and profits generated from medical care may be the most distinguishing characteristics of the modern American health care system. The theology of the market, along with the strongly held mistaken belief that the problems of U.S. health care can be solved if only the market could be perfected, has effectively obstructed the development of a rational, efficient and humane national health care policy.

Despite the U.S.’s outsized spending on health care, its relatively poor health outcomes are beyond dispute. For example, in 2019, the U.S. ranked 36th in the world in terms of life expectancy at birth — behind Slovenia and Costa Rica, not to mention Canada, Japan and all the wealthy countries in Europe. This is not solely, as one might at first think, a function of racial and ethnic health disparities, as dramatic as they are in the U.S. A recent study found that even white people living in the nation’s highest-income counties often have worse health outcomes on infant mortality, maternal mortality, and deaths after heart attack, colon cancer and childhood leukemia than the average citizens of Norway, Denmark, and other wealthier countries.

The relatively poor health outcomes in the U.S. require a more nuanced explanation based on income, wealth and power inequalities. These factors drive inadequate and inequitable access to health care. But they also undermine many of the social determinants of health, particularly for poor and vulnerable populations, which fall largely outside the health care sector. These include, for example, higher income, access to healthy food, clean water and air, adequate housing, safe neighborhoods, etc.

Given the above facts, it’s important to ask: Why doesn’t the U.S. have universal health coverage?

The simple answer is that the economic and political forces that profit greatly from the status quo are opposed to universal health coverage. It’s certainly not too complicated to implement such a system — nearly every wealthy country in the world has figured out how it can be done. Many academics and pundits point to surveys indicating that Americans are fearful of change and are satisfied with the status quo, in particular with their employer-based health insurance (which covers more than 150 million workers and their families). In part, these attitudes are understandable. Most people are healthy and thus are not faced with the inequities and indignities that befall those who become ill and must deal with the private insurance industry and a dysfunctional health care system. Additionally, the true costs of health care are often hidden from workers who receive their insurance through jobs in which insurance premiums are automatically deducted from their paychecks. Even less well understood is the fact that we all subsidize employers’ contributions to workers’ health insurance with more than $300 billion of our tax dollars (employer contributions are not taxed but are considered a line item in the federal budget).

But public sentiment is changing as health care expenditures continue to outpace earnings. Over the past 10 years, insurance premiums have risen more than twice as fast as earnings, while deductibles rose more than six times as fast. And the even more rapidly rising price of prescription drugs has particularly captured the public’s attention. This is likely because prescription drug prices rose by 33 percent between 2014 and 2020, and the average price of new cancer drugs now exceeds $100,000 per year. There is also an increasing public recognition of the massive and growing medical debt burden. One recent study estimated that nearly 1 out of 5 individuals in the U.S. collectively had $140 billion worth of medical debt in collections in June 2020.

You have done outstanding research on the economics and politics of AIDS. How did your background in AIDS research shape your views on health care and social insurance?

My background in AIDS research, which began in the mid-1980s as the epidemic exploded around the country, highlighted a central weakness of American health care — if you become ill and lose your job, you frequently lose your health insurance. Thus, at the point when you need it most, you lose access to health care. This was driven by the private health insurance profit-maximizing model, the reliance on employment-based insurance and the lack of recognition of health care as a human right. The Affordable Care Act provided some mitigation but, with tens of millions uninsured today, these issues are still with us.

Another dimension of American health care that came into sharper focus for me was the sheer power of dominant stakeholders, such as the pharmaceutical companies, to extract profits with little restraint. The clearest example of this is perhaps the relentless increase in drug prices, which one could argue began when the first AIDS drug, AZT, was marketed at $10,000 per year in 1987; today we have cancer drugs sold at more than 10 times that price.

Medicare for All is now gaining traction in the U.S. What exactly is Medicare for All and how would it work?

The term “Medicare for All,” as it is commonly known and described in congressional bills such as the Medicare for All Act of 2021 (H.R. 1976, which currently has 117 co-sponsors in the House of Representatives), is a short-hand expression for a universal, single-payer health care system. Essentially, this means that health care will be provided to all U.S. residents and a single payer — the federal government — will pay all bills. The Act’s summary states in part:

Among other requirements, the program must (1) cover all U.S. residents; (2) provide for automatic enrollment of individuals upon birth or residency in the United States; and (3) cover items and services that are medically necessary or appropriate to maintain health or to diagnose, treat, or rehabilitate a health condition, including hospital services, prescription drugs, mental health and substance abuse treatment, dental and vision services, and long-term care. The bill prohibits cost-sharing (e.g., deductibles, coinsurance, and copayments) and other charges for covered services. Additionally, private health insurers and employers may only offer coverage that is supplemental to, and not duplicative of, benefits provided under the program.

The “single payer” aspect of Medicare for All has several crucial virtues. First, it would do away with the thousands of private claim processes that currently exist to service the private insurance industry, thereby reducing an enormous amount of bureaucratic waste that is estimated to be in the hundreds of billions of dollars each year. At the same time, with the negotiating power given to the federal government, prices for pharmaceuticals, medical devices, and other medical expenditures could be brought under control. But most importantly, the single-payer approach is the most realistic approach to providing health care to all Americans.

Medicare for All marches and rallies are taking place in scores of cities across the country on Saturday, July 24. In fact, there is ample evidence that most Americans already support universal health care. But can we have health care reform without reforming the political system?

There is no doubt that the road to Medicare for All is an uphill struggle, given the array of political and economic forces that benefit from the status quo. However, the more than 50 marches and rallies around the country on July 24 reflect not only public support for transformative change in our health care system, but the type of movement building that is necessary to carry out this change. A complementary strategy, which could ignite a national consensus, would be a breakthrough success for a Medicare for All-type program at the state level, particularly in large states such as California or New York, where organizing efforts have been underway for several years. This could well have a cascading effect on other states and ultimately at the federal level. The common strategic thread for success at the state or federal level, is building a strong, popular social movement demanding universal health coverage for all.


Noam Chomsky: The US Health System Is an “International Scandal” — and ACA Repeal Will Make It Worse

BYC.J. PolychroniouTruthoutPUBLISHEDJanuary 12, 2017SHAREShare via FacebookShare via TwitterShare via Email

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READING LISTENVIRONMENT & HEALTHMedicare for All Rallies in 50 Cities Show Big Support for Universal Health CarePRISONS & POLICINGBiden Upholds Last-Minute Trump Memo That Would Send 4,000 People Back to PrisonREPRODUCTIVE RIGHTSLegal Brief From Mississippi AG Calls for Supreme Court to Undo Abortion RightsPOLITICS & ELECTIONSFBI Admits It Got 4,500 Tips on Kavanaugh But Didn’t Investigate ThemPOLITICS & ELECTIONSMitch McConnell Is Threatening to Stifle Debt Ceiling Vote to Get What He WantsECONOMY & LABORRepublicans Are Using Antitrust Reform as a Trojan Horse to Attack Democracy

(Image: Lauren Walker / Truthout; Adapted: Thomasjphotos)(Image: Lauren Walker / Truthout; Adapted: Thomasjphotos)

Changes are coming to America’s health care system. Not long from now, the Affordable Care Act could be history. President-elect Donald Trump wants to repeal so-called Obamacare, although he is now urging Republicans to repeal and replace it at the same time. But replace it with what?

The political culture of the most powerful nation in the world is such that it vehemently defends the right of people to buy guns but opposes the right to free and decent health care for all its citizens. In all likelihood, the Trump health care plan will be one based on “free market principles.” Under such a plan, as Noam Chomsky notes in the exclusive interview for Truthout that follows, poor people are likely to suffer most. In other words, the scandalous nature of the US health care system is bound to become even more scandalous in the Trump era. Welcome back to the future.

C.J. Polychroniou: Trump and the Republicans are bent on doing away with Obamacare. Doesn’t the 2010 Patient Protection and Affordable Care Act (ACA) represent an improvement over what existed before? And, what would the Republicans replace it with?

Noam Chomsky: I perhaps should say, to begin, that I have always felt a little uncomfortable about the term “Obamacare.” Did anyone call Medicare “Johnsoncare?” Maybe wrongly, but it has seemed to me to have a tinge of Republican-style vulgar disparagement, maybe even of racism. But put that aside…. Yes, the ACA is a definite improvement over what came before — which is not a great compliment. The US health care system has long been an international scandal, with about twice the per capita expenses of other wealthy (OECD) countries and relatively poor outcomes. The ACA did, however, bring improvements, including insurance for tens of millions of people who lacked it, banning of refusal of insurance for people with prior disabilities, and other gains — and also, it appears to have led to a reduction in the increase of health care costs, though that is hard to determine precisely.

The House of Representatives, dominated by Republicans (with a minority of voters), has voted over 50 times in the past six years to repeal or weaken Obamacare, but they have yet to come up with anything like a coherent alternative. That is not too surprising. Since Obama’s election, the Republicans have been pretty much the party of NO. Chances are that they will now adopt a cynical [Paul] Ryan-style evasion, repeal and delay, to pretend to be honoring their fervent pledges while avoiding at least for a time the consequences of a possible major collapse of the health system and ballooning costs. It’s far from certain. It’s conceivable that they might patch together some kind of plan, or that the ultra-right and quite passionate “Freedom Caucus” may insist on instant repeal without a plan, damn the consequence for the budget, or, of course, for people.

One part of the health system that is likely to suffer is Medicaid, probably through block grants to states, which gives the Republican-run states opportunities to gut it. Medicaid only helps poor people who “don’t matter” and don’t vote Republican anyway. So [according to Republican logic], why should the rich pay taxes to maintain it?

Article 25 of the UN Universal Declaration on Human Rights (UDHR) states that the right to health care is indeed a human right. Yet, it is estimated that close to 30 million Americans remain uninsured even with the ACA in place. What are some of the key cultural, economic and political factors that make the US an outlier in the provision of free health care?

First, it is important to remember that the US does not accept the Universal Declaration of Human Rights — though in fact the UDHR was largely the initiative of Eleanor Roosevelt, who chaired the commission that drafted its articles, with quite broad international participation.

The UDHR has three components, which are of equal status: civil-political, socioeconomic and cultural rights. The US formally accepts the first of the three, though it has often violated its provisions. The US pretty much disregards the third. And to the point here, the US has officially and strongly condemned the second component, socioeconomic rights, including Article 25.

Opposition to Article 25 was particularly vehement in the Reagan and Bush 1 years. Paula Dobriansky, deputy assistant secretary of state for human rights and humanitarian affairs in these administrations, dismissed the “myth” that “‘economic and social rights constitute human rights,” as the UDHR declares. She was following the lead of Reagan’s UN Ambassador Jeane Kirkpatrick, who ridiculed the myth as “little more than an empty vessel into which vague hopes and inchoate expectations can be poured.” Kirkpatrick thus joined Soviet Ambassador Andrei Vyshinsky, who agreed that it was a mere “collection of pious phrases.” The concepts of Article 25 are “preposterous” and even a “dangerous incitement,” according to Ambassador Morris Abram, the distinguished civil rights attorney who was US Representative to the UN Commission on Human Rights under Bush I, casting the sole veto of the UN Right to Development, which closely paraphrased Article 25 of the UDHR.The Bush 2 administration maintained the tradition by voting alone to reject a UN resolution on the right to food and the right to the highest attainable standard of physical and mental health (the resolution passed 52-1).

Rejection of Article 25, then, is a matter of principle. And also a matter of practice. In the OECD [Organization for Economic Cooperation and Development] ranking of social justice, the US is in 27th place out of 31, right above Greece, Chile, Mexico and Turkey. This is happening in the richest country in world history, with incomparable advantages. It was quite possibly already the richest region in the world in the 18th century.

In extenuation of the Reagan-Bush-Vyshinsky alliance on this matter, we should recognize that formal support for the UDHR is all too often divorced from practice.

US dismissal of the UDHR in principle and practice extends to other areas. Take labor rights. The US has failed to ratify the first principle of the International Labour Organization Convention, which endorses “Freedom of Association and Protection of the Right to Organise.” An editorial comment in the American Journal of International Law refers to this provision of the International Labour Organization Convention as “the untouchable treaty in American politics.” US rejection is guarded with such fervor, the report continues, that there has never even been any debate about the matter. The rejection of International Labour Organization Conventions contrasts dramatically with the fervor of Washington’s dedication to the highly protectionist elements of the misnamed “free trade agreements,” designed to guarantee monopoly pricing rights for corporations (“intellectual property rights”), on spurious grounds. In general, it would be more accurate to call these “investor rights agreements.”

Comparison of the attitude toward elementary rights of labor and extraordinary rights of private power tells us a good deal about the nature of American society.

Furthermore, US labor history is unusually violent. Hundreds of US workers were being killed by private and state security forces in strike actions, practices unknown in similar countries. In her history of American labor, Patricia Sexton — noting that there are no serious studies — reports an estimate of 700 strikers killed and thousands injured from 1877 to 1968, a figure which, she concludes, may “grossly understate the total casualties.” In comparison, one British striker was killed since 1911.

As struggles for freedom gained victories and violent means became less available, business turned to softer measures, such as the “scientific methods of strike breaking” that have become a leading industry. In much the same way, the overthrow of reformist governments by violence, once routine, has been displaced by “soft coups” such as the recent coup in Brazil, though the former options are still pursued when possible, as in Obama’s support for the Honduran military coup in 2009, in near isolation. Labor remains relatively weak in the US in comparison to similar societies. It is constantly battling even for survival as a significant organized force in the society, under particularly harsh attack since the Reagan years.

All of this is part of the background for the US departure in health care from the norm of the OECD, and even less privileged societies. But there are deeper reasons why the US is an “outlier” in health care and social justice generally. These trace back to unusual features of American history. Unlike other developed state capitalist industrial democracies, the political economy and social structure of the United States developed in a kind of tabula rasa. The expulsion or mass killing of Indigenous nations cleared the ground for the invading settlers, who had enormous resources and ample fertile lands at their disposal, and extraordinary security for reasons of geography and power. That led to the rise of a society of individual farmers, and also, thanks to slavery, substantial control of the product that fueled the industrial revolution: cotton, the foundation of manufacturing, banking, commerce, retail for both the US and Britain, and less directly, other European societies. Also relevant is the fact that the country has actually been at war for 500 years with little respite, a history that has created “the richest, most powerful¸ and ultimately most militarized nation in world history,” as scholar Walter Hixson has documented.

For similar reasons, American society lacked the traditional social stratification and autocratic political structure of Europe, and the various measures of social support that developed unevenly and erratically. There has been ample state intervention in the economy from the outset — dramatically in recent years — but without general support systems.

As a result, US society is, to an unusual extent, business-run, with a highly class-conscious business community dedicated to “the everlasting battle for the minds of men.” The business community is also set on containing or demolishing the “political power of the masses,” which it deems as a serious “hazard to industrialists” (to sample some of the rhetoric of the business press during the New Deal years, when the threat to the overwhelming dominance of business power seemed real).

Here is yet another anomaly about US health care: According to data by the Organization for Economic Cooperation and Development, the US spends far more on health care than most other advanced nations, yet Americans have poor health outcomes and are plagued by chronic illnesses at higher rates than the citizens of other advanced nations. Why is that?

US health care costs are estimated to be about twice the OECD average, with rather poor outcomes by comparative standards. Infant mortality, for example, is higher in the US than in Cuba, Greece and the EU generally, according to CIA figures.

As for reasons, we can return to the more general question of social justice comparisons, but there are special reasons in the health care domain. To an unusual extent, the US health care system is privatized and unregulated. Insurance companies are in the business of making money, not providing health care, and when they undertake the latter, it is likely not to be in the best interests of patients or to be efficient. Administrative costs are far greater in the private component of the health care system than in Medicare, which itself suffers by having to work through the private system.

Comparisons with other countries reveal much more bureaucracy and higher administrative costs in the US privatized system than elsewhere. One study of the US and Canada a decade ago, by medical researcher Steffie Woolhandler and associates, found enormous disparities, and concluded that “Reducing U.S. administrative costs to Canadian levels would save at least $209 billion annually, enough to fund universal coverage.” Another anomalous feature of the US system is the law banning the government from negotiating drug prices, which leads to highly inflated prices in the US as compared with other countries. That effect is magnified considerably by the extreme patent rights accorded to the pharmaceutical industry in “trade agreements,” enabling monopoly profits. In a profit-driven system, there are also incentives for expensive treatments rather than preventive care, as strikingly in Cuba, with remarkably efficient and effective health care.

Why aren’t Americans demanding — not simply expressing a preference for in survey polls — access to a universal health care system?

They are indeed expressing a preference, over a long period. Just to give one telling illustration, in the late Reagan years 70 percent of the adult population thought that health care should be a constitutional guarantee, and 40 percent thought it already was in the Constitution since it is such an obviously legitimate right. Poll results depend on wording and nuance, but they have quite consistently, over the years, shown strong and often large majority support for universal health care — often called “Canadian-style,” not because Canada necessarily has the best system, but because it is close by and observable. The early ACA proposals called for a “public option.” It was supported by almost two-thirds of the population, but was dropped without serious consideration, presumably as part of a compact with financial institutions. The legislative bar to government negotiation of drug prices was opposed by 85 percent, also disregarded — again, presumably, to prevent opposition by the pharmaceutical giants. The preference for universal health care is particularly remarkable in light of the fact that there is almost no support or advocacy in sources that reach the general public and virtually no discussion in the public domain.

The facts about public support for universal health care receive occasional comment, in an interesting way. When running for president in 2004, Democrat John Kerry, The New York Times reported, “took pains .. to say that his plan for expanding access to health insurance would not create a new government program,” because “there is so little political support for government intervention in the health care market in the United States.” At the same time, polls in The Wall Street Journal, Businessweek, The Washington Post and other media found overwhelming public support for government guarantees to everyone of “the best and most advanced health care that technology can supply.”

But that is only public support. The press reported correctly that there was little “political support” and that what the public wants is “politically impossible” — a polite way of saying that the financial and pharmaceutical industries will not tolerate it, and in American democracy, that’s what counts.

Returning to your question, it raises a crucial question about American democracy: why isn’t the population “demanding” what it strongly prefers? Why is it allowing concentrated private capital to undermine necessities of life in the interests of profit and power? The “demands” are hardly utopian. They are commonly satisfied elsewhere, even in sectors of the US system. Furthermore, the demands could readily be implemented even without significant legislative breakthroughs. For example, by steadily reducing the age for entry to Medicare.

The question directs our attention to a profound democratic deficit in an atomized society, lacking the kind of popular associations and organizations that enable the public to participate in a meaningful way in determining the course of political, social and economic affairs. These would crucially include a strong and participatory labor movement and actual political parties growing from public deliberation and participation instead of the elite-run candidate-producing groups that pass for political parties. What remains is a depoliticized society in which a majority of voters (barely half the population even in the super-hyped presidential elections, much less in others) are literally disenfranchised, in that their representatives disregard their preferences while effective decision-making lies largely in the hands of tiny concentrations of wealth and corporate power, as study after study reveals.

The prevailing situation reminds us of the words of America’s leading 20th-century social philosopher, John Dewey, much of whose work focused on democracy and its failures and promise. Dewey deplored the domination by “business for private profit through private control of banking, land, industry, reinforced by command of the press, press agents and other means of publicity and propaganda” and recognized that “Power today resides in control of the means of production, exchange, publicity, transportation and communication. Whoever owns them rules the life of the country,” even if democratic forms remain. Until those institutions are in the hands of the public, he continued, politics will remain “the shadow cast on society by big business.”

This was not a voice from the marginalized far left, but from the mainstream of liberal thought.

Turning finally to your question again, a rather general answer, which applies in its specific way to contemporary western democracies, was provided by David Hume over 250 years ago, in his classic study of the First Principles of Government. Hume found “nothing more surprising than to see the easiness with which the many are governed by the few; and to observe the implicit submission with which men resign their own sentiments and passions to those of their rulers. When we enquire by what means this wonder is brought about, we shall find, that as Force is always on the side of the governed, the governors have nothing to support them but opinion. `Tis therefore, on opinion only that government is founded; and this maxim extends to the most despotic and most military governments, as well as to the most free and most popular.”

Implicit submission is not imposed by laws of nature or political theory. It is a choice, at least in societies such as ours, which enjoys the legacy provided by the struggles of those who came before us. Here power is indeed “on the side of the governed,” if they organize and act to gain and exercise it. That holds for health care and for much else.C.J. Polychroniou

C.J. Polychroniou is a political economist/political scientist who has taught and worked in numerous universities and research centers in Europe and the United States. Currently, his main research interests are in European economic integration, globalization, climate change, the political economy of the United States, and the deconstruction of neoliberalism’s politico-economic project. He is a regular contributor to Truthout as well as a member of Truthout’s Public Intellectual Project. He has published scores of books, and his articles have appeared in a variety of journals, magazines, newspapers and popular news websites. Many of his publications have been translated into several foreign languages, including Arabic, Croatian, Dutch, French, Greek, Italian, Portuguese, Russian, Spanish and Turkish. His latest books are Optimism Over Despair: Noam Chomsky On Capitalism, Empire, and Social Change, an anthology of interviews with Chomsky originally published at Truthout and collected by Haymarket Books; Climate Crisis and the Global Green New DealThe Political Economy of Saving the Planet (with Noam Chomsky and Robert Pollin as primary authors); and The PrecipiceNeoliberalism, the Pandemic, and the Urgent Need for Radical Change, an anthology of interviews with Chomsky originally published at Truthout and collected by Haymarket Books (scheduled for publication in June 2021). MORE BY THIS AUTHOR…


Health Care “by the People”: An Interview With the Architect of Colorado’s Single-Payer Plan

Next year, residents will vote on replacing the Affordable Care Act with ColoradoCare, a single-payer plan that works like a Nathan SchneiderYES! Magazine October 26, 2015

Health Care “by the People”: An Interview With the Architect of Colorado’s Single-Payer Plan

BYNathan SchneiderYES! MagazinePUBLISHEDOctober 26, 2015SHAREShare via FacebookShare via TwitterShare via Email

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The Colorado State Capital dome, in Denver, Colorado. In November of 2016, the state will have the opportunity to opt out of Obamacare and replace it with ColoradoCare, a universal health care system governed by those who rely on it. (Photo: Jimmy Emerson, DVM)The Colorado State Capitol dome, in Denver, Colorado. In November of 2016, the state will have the opportunity to opt out of Obamacare and replace it with ColoradoCare, a universal health-care system governed by those who rely on it. (Photo: Jimmy Emerson, DVM)

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Also see: Will Colorado Become the First State to Implement Single-Payer Health Care?

First pot, now health. In November 2012, Colorado voters approved a ballot initiative that made recreational use of marijunana legal, despite a federal ban. In November of next year, the state will have the opportunity to lead the way again – this time, by opting out of Obamacare and replacing it with ColoradoCare, a universal health care system governed by those who rely on it. Proponents presented far more than the requisite 99,000 signatures required to put the initiative on the 2016 ballot in Denver today, though they must be verified in the coming weeks.

ColoradoCare proposes a single-payer model that covers every Colorado resident. A tax on income and employers would replace insurance premiums, but the revenue wouldn’t be subject to the whims of legislators; instead, it would go directly to a fund overseen by trustees whom the recipients choose. In this respect, it would be a cooperative-like system accountable to everyone in the state, independent from the rest of the government and enshrined in the constitution.

Proponents argue that ColoradoCare will mean better, more accountable care at a lower cost. Opponents, including the Koch brothers-funded Advancing Colorado, say it will be the Obamacare rollout on steroids. But by combining conservative irritation with the Affordable Care Act with liberal ambition toward universal coverage, it may actually have a chance in a purple state like Colorado.

Colorado, also, has a history of building practical, cooperative infrastructure. When energy companies failed to bring power to the state’s rural areas quickly enough, communities set up electricity co-ops to power themselves. Credit unions are plentiful. Cooperative business models accommodate both community-mindedness and the state’s libertarian streak.

Irene Aguilar, a physician and state senator, is the chief architect of ColoradoCare’s unique cooperative approach and one of its leading spokespeople. I sat down with her at an ice cream shop in Louisville, Colorado, to learn more.

Nathan Schneider: What brought you from medical practice to the state legislature?

Irene Aguilar: I was appalled to see how much we were spending on health care. I often think of one woman in particular who was about 42 and working as a secretary when she first saw me. Every year I’d drag her in to write her prescriptions, and she’d say, “I can’t really afford these.” Because of this, her numbers showed that she was not doing very well at managing her disease. By about 50 she had renal failure, and she qualified for Medicare. I couldn’t help her take her medicines, and soon we were paying $70,000 a year to give her dialysis. Because she was on dialysis three days a week, guess what – she couldn’t keep her job, and she ended up on Medicaid. This was a woman who had been working. She went on, in her 50s, to have heart disease, and she had a leg amputated, and at 60 she was dead. That is the real human cost of the backward way in which we deal with our health care system.

It was so much more expensive to pay for her to get dialysis, to get all those heart procedures, to lose her leg, and to be on welfare than it would have been if we kept her on her diabetes medicines at the age of 42 and let her control her disease. It’s possible to have an alternative that is both fiscally conservative and socially just; it would be win-win in my mind.

How did you start to entertain the possibility of an alternative like ColoradoCare?

I worked for 28-years-plus at Denver Health, a county hospital, doing primary-care internal medicine. In 2007, Colorado had something called the 208 Blue Ribbon Commission for Healthcare Reform. The four plans it considered included a single-payer health care plan, and the commissioners created subgroups to consider how the plans would impact certain populations. Since my daughter was disabled, I applied to be on the vulnerable populations task force. We learned that if we adopted the single-payer plan we could have everyone covered and decrease spending by $1.6 billion a year.

Not knowing anything about politics, I assumed that of course the commissioners would pick that one – and then quickly found out how much money there is in health care and how many self-interested individuals were in that pot. I began learning more about the political aspects of this that I needed to be more aware of. In 2009 we tried to run a single-payer bill through the legislature, but the governor managed to kill it. I ran for office in 2010 in order to concentrate on this. Our setbacks gave me motivation to listen to the feedback and see we could to modify this and make it more consistent with Colorado values.

How did the initial proposal begin to evolve into ColoradoCare?

In 2009, Atul Gawande published an article in The New Yorker called “The Cost Conundrum.” He profiled the impressive health outcomes in Grand Junction, Colorado, alongside those of McAllen, Texas. I went and visited with people in Grand Junction to learn more about what they were doing differently. There, [insurance company] Rocky Mountain Health Plans collected all the payments and paid providers the same, no matter who the individual patient’s payer was. They paid them about 80 percent on fee-for-service and kept about 20 percent to be given on a reward basis based on quality of care and patient satisfaction. Unlike my experience as a provider, providers there did not have a disincentive against seeing certain people because of the insurance they had. ColoradoCare is sort of a blend of Rocky Mountain Health Plans and single-payer.

A lot of people seem afraid of entrusting health care to the government – “death panels” and so forth. Does the Rocky Mountain model get around that?

Rocky Mountain Health Plans, at the end of the day, is still an insurer. In ColoradoCare, we’re all putting our money in, so in some ways it’s a cooperative. But it’s different from a cooperative because you don’t have to put money in if you don’t have a lot of money. The pure cooperative people tell us to stop calling it a cooperative, both because it’s mandatory and everybody doesn’t pay the same. But we like to call it a cooperative because the board is accountable to and elected by the people in the state.

Tell me about where that money comes from.

You collect the funds through a premium tax – a 6.6 percent employer tax across the board and a 3.3 percent individual tax. If you’re self-employed, it’s the whole 10 percent, but because it’s tax deductible it ends up being less than that. The funds are collected through our taxes, but they’re transferred into a separate authority that is run by its own elected board of directors.

What does that revenue buy?

We had a fiscal analysis done by Gerald Friedman, an economist at UMass, Amherst. He anticipated that with the Affordable Care Act, health care would be about 19.4 percent of the gross state product, and if we were to switch to this model, it would be closer to 15 percent. By Obamacare standards, the level of care would be the very top – Platinum Plus – covering 90 percent of your total health costs. We added in no copay for primary care and low copayments that the primary-care provider can waive if necessary to prevent longer-term costs. We also had it priced for everyone in state, regardless of documentation status, under the knowledge that we would not be turning people away for emergency care, so it made more sense to have up-front preventative care available for all the people who lived in the state. Vermont’s single-payer policy imploded because it was way too expensive for them. It’s a small state. But we have the numbers.

Do you think Colorado’s more conservative voters will go for it?

There are people in the legislature, primarily Republicans, who focus on what is and what is not government’s responsibility. They really don’t want health care to be government’s responsibility. But I was invited to present the initiative in Glenwood Springs on the Western Slope, which is historically pretty conservative. I ate at a cafe there where all the waitresses carry guns. I was impressed, though, with how well people in small communities like that understand how the current system works against them. Our rural areas have significantly higher rates for their plans and lower benefits. When somebody in those communities is sick and can’t get the care they need, it’s somebody people know. They asked me a lot of questions, and they seemed to like my answers. I didn’t sense any hostility.

What will the strategy be for passing this initiative?

I think it will be really important to involve doctors and nurses, making information available in their offices and ensuring that they know enough about it to answer a few basic questions or refer patients elsewhere. Of course, there are people who make billions of dollars off of our dysfunctional system, and they will spend millions of dollars trying to convince medical professionals that this will be more harmful to them than what they have right now.

Do you know who those opponents are yet?

I don’t. I would expect Big Pharma and for-profit hospital systems – maybe all hospital systems. It’s hard to tell the for-profit from the nonprofit these days. People often ask about what happens to insurance companies. I answer, “What happened to vinyl record companies?” It varies. An HMO like Kaiser could continue to exist because they would get a monthly payment – it just wouldn’t be from an employer, it would be from this premium tax. An insurer like Rocky Mountain could continue to be an administrator for the system.

I actually had a lobbying breakfast with United Healthcare. They said to me that when Vermont passed its plan, they spoke to the governor about wanting to be the administrator for the Vermont health plan. So I don’t think that insurers would go away, but they’ll have a different kind of role, because there is still fiscal management to be done, just as with Medicare. Estimates suggest that this kind of plan will create more jobs in the health care industry in terms of delivering service, but it’s a shift in what kind of jobs provided. The overall savings also means a certain amount of extra income that’s available in the economy to do things other than health care.

What do you think the chances are that this plan will actually pass?

Colorado is usually seen as a leader, as a state that is trying to do the right thing. I think there’s sort of a sense that it wouldn’t be unusual for a state like Colorado to try and do something new, since we’ve been so proactive in other ways. I give it at least 50-50, and the optimist in me gives it 52-48.

There’s this documentary that was done for PBS by T.R. Reid, who is part of our coalition, called Sick Around the World. In one scene, he’s talking with a former president of Switzerland, and she talks about how in 1994 they passed universal health care by a narrow margin. There were many people who were so angry that they said they were going to leave the country. Ten years later, there were very few people who were not thrilled with the program. Knowing what I do about health care, I can’t help but hope that it will be the same in Colorado. There will be people who put up a big fight, and when we beat them by the hair on our chinney chin chin they’ll be furious. But in 10 years we’ll all be grateful we took that step.

Click here for more on how ColoradoCare works.Nathan Schneider

Nathan Schneider is an editor of Waging Nonviolence. His first two books, both published in 2013 by University of California Press, are Thank You, Anarchy: Notes from the Occupy Apocalypse and God in Proof: The Story of a Search from the Ancients to the Internet. He has written about religion, reason and violence for publications including The Nation, The New York Times, Harper’s, Commonweal, Religion Dispatches, AlterNet and others. He is also an editor at Killing the Buddha. Visit his website at MORE BY THIS AUTHOR…