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AFSCME pushes for single payer health plan.

Double-digit health care premium inflation and lack of access to health insurance for 37 million Americans has rekindled a fierce debate across the country regarding health care reform. Cost-sharing has left no one-including state and local governments, businesses, and workers-unaffected by the problem. Union members have seen health care benefits become one of the most contentious issues at the bargaining table. In 1989 alone, health benefits were the precipitating issue in 78 percent of all labor disputes.

The debate over health care reform has particular relevance for state and local governments.

First, health care inflation is bankrupting our cities, counties and states. A recent AFSCME study ("Simultaneous Solutions: Single Payer National Health Insurance Is The Best Cure For The State And Local Government Fiscal Crisis) found that local and state government "faced the impossible task of financing health care cost growth of 11 percent per year with revenue growth of only 6.2 percent per year. The report concludes that "as much as $24 billion-46 percent of the estimated state and local budget gaps for fiscal year 1991-is attributable to the fact that health care spending outstripped revenue growth over the last five years." If present trends continue, the growth in the proportion of sate and local government budgets needed to maintain the present level of health care will either require $100 billion in tax increases or squeeze $100 billion out of other necessary government spending in the year 2000.

Second, incremental health care reform requires massive amounts of additional spending without the benefits of comprehensive reform. Almost every incremental reform proposal put forward so far leaves the claims administration, billing processes, and excessive overhead costs of our health care system (estimated as about 25 percent of our current health care spending) in place while expanding coverage to the uninsured. This could mandate between $10 billion and $100 billion of additional spending.

Third, universal coverage provides necessary coverage for the uninsured and it levels the playing field for all providers, especially state and local government. Sixty million Americans are uninsured or underinsured. These Americans only receive health care when they desperately need care, and it is the state and local government and the well-insured who pay their bill.

It is clear that only health care reform which contains health care cost increases, does not result in additional spending and provides coverage to the uninsured is reasonable. Among all the proposals presently before Congress only one, single payer, national health insurance (H.R. 1300/S. 2320 See May 11th NCW), contains costs and expands coverage without massive additional spending. According to a report to Congress from the U.S. General Accounting Office (GAO): "If the U.S. were to shift to a system of universal coverage and a single payer, as in Canada, the savings in administrative costs would be more than enough to offset the expense of universal coverage.

The AFSCME study found that if single payer national health insurance had been fully implemented in 1991, it would have saved state and local governments combined, over $27 billion. Local governments would be the biggest "winner" saving $19.8 billion of the $27 billion.

A recent survey by Citizen Action of New York shows the following individual payroll savings for several medium to small New York towns if a single payer national health insurance plan were in place, like that proposed by H.R. 1300/S. 2320.

Section Orangeburg, N.Y.: A township in upstate New York with 290 employees, reports they would have saved $1 million in payroll costs in 1990 under H.R. 1300.

Section Newark Village, N.Y.: A small town in upstate New York with 24 employees (only 8 employees are enrolled in the health insurance plan), reports they would have saved $19,000 in payroll costs in 1990 under H.R. 1300.

Section Saratoga Springs, N.Y.: A township in upstate New York with 300 employees, reports they would have saved $958,000 in payroll costs in 1990 under H.R. 1300.

Where do the savings come from and why?

Under a single payer national health insurance plan the population of an entire state, no matter where they work, is treated as a single group to be insured. One large insurance group allows realistic fee setting, an end to cost-shifting, and administrative efficiencies (i.e. there is only one claims processing system rather than hundreds of different ones) for both the insurance plan and providers.

For businesses, large and small, such a plan means that health insurance costs are fair and reflect the real cost of basic health coverage for each person. For state and local governments all residents will have insurance that provides reimbursement to both private and pubic sector facilities at a fair and reasonable price.

Finally, one large insurance group can contain future health care cost growth, an issue of vital importance to government, businesses and workers.

The challenge to leaders in state and local government is to seize this historic opportunity to cut costs and simultaneously guarantee health insurance to all Americans for the first time in our history. We cannot afford to do less.

"Simultaneous Solutions: Single Payer National Health Insurance is the Best Cure for the State and Local Government Fiscal Crisis" is a joint publication of the American Federation of State, County and Municipal Employees; Public Citizen Health Research Group; and Physicians for a National Health Plan. The report was prepared by Jody Hoffman, M.S.P.H., Iris J. Lav, M.B.A., Ida Hellander, M.D., David Himmelstein, M.D., Robert E. McGarrah, Jr., J.D., and Sidney M. Wolfe, M.D. To obtain a copy of this report contact AFSCME's Department of Public Policy at (202) 429-1155.
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Title Annotation:American Federation of State, County and Municipal Employees
Author:McEntee, Gerald W.
Publication:Nation's Cities Weekly
Date:Jun 1, 1992
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