"Rx for U.S. Healthcare Reform" - A Position Paper from TANC

Trans-American Alliance for a National Consensus (TANC)

Rx for U.S. Healthcare Reform
A Proven Model for NON-PROFIT “Universal Healthcare”
Provides a Solution for Widespread Enactment
www.transamericanalliance.org

Thousands of residents of Wise, Va., and Los Angeles seeking
free exams and medical/dental treatments offered by the all-
volunteer Remote Area Medical (RAM) organization.
Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Trans-American Alliance for a National Consensus (TANC)

A Self-Sustaining, Ready-Made NON-PROFIT Model for
“Universal Healthcare” is Achievable at Little Cost

By Michael A. Freeman
Executive Director, TANC

“Of all forms of
inequality,
injustice in
healthcare is the
most shocking
I t’s right under the noses of President Obama and members from both major
parties of Congress, and they may not even know it or have simply over-
looked it: There is a practical, self-sustainable model and ready-made solution for
the reform of America’s teetering healthcare system. And the federal Medicare sys-
and inhumane.” tem helped create it.

— Rev. Dr. Martin It is a little-known federally-funded Medicare program that has successfully covered
Luther King, Jr. a segment of the Senior Citizen population for nearly a quarter-century in an innova-
(1966) tive partnership with NON-PROFIT health insurance organizations. And it is one of
the best kept secrets and a relatively tiny sliver of American healthcare.

Operating under the Medicare Advantage Prescription Drug Program (MA-PD),
which are standard ―Part D‖ Medicare payments from senior citizens’ accounts typi-
cally dedicated for prescription drug plans, is a special classification of ―Social Man-
aged Care” — an entire suite of extensive
healthcare services. These so-called ―Social
HMOs‖ stand to serve as shining models for a
―national non-profit health insurance system‖
and offer broader applications for the general (under-65) American population — an
innovative, new paradigm to potentially convert and reform our cost-spiraling FOR-
PROFIT/PRIVATE Health Insurance system.

As this position paper attempts to illustrate, the
model for ―Social HMOs” set an outstanding
template for what low- to no-cost, NOT-FOR-
PROFIT health insurance can do to alleviate and
reverse the ever-escalating costs and gaps in
coverage for an estimated 47 million uninsured
Americans. The more altruistic and humane
principles that are the basic tenets of these
NON-PROFIT, senior-based ―Social HMOs,‖ if
adapted and broadened out for the ―general‖
Remote Area Medical (RAM), a Nashville-based non-profit medical relief
organization, stands at the vanguard of providing “mobilized” treatment under-65 population, could bring badly needed
events across the country — attracting tens of thousands of Americans relief to the many millions of other ―insured‖
who can’t obtain or afford FOR-PROFIT/PRIVATE health insurance cover- Americans who live in dire fear of their FOR-
age. PROFIT/PRIVATE carriers raising their deducti-
ble payments, co-pays on hospital stays, issuing
outright DENIALS on critical life-saving medical procedures, and routine policy revo-
cations for discovering ―preexisting conditions‖ — all of which can have a devastat-
ing economic impact on American families.


A Proven Model for NON-PROFIT “Universal
Healthcare” Provides a Solution for Enactment

Under proposals from President Obama and Sen. Max Baucus (D-MT),
chairman of the Senate Finance Committee sharing half of Congress’ load
on healthcare reform, both have laid out plans for some kind of national or
state ―Insurance Exchanges‖ in which FOR-PROFIT/PRIVATE health insurance
carriers would be placed into ―competitive, low-cost pools‖ for consumers to
choose which plans best fit their needs and what they can afford. But, the Presi-
dent and Congress would find a much more affordable, minimally government
budgeted and much lower cost solution in fostering the creation of a NON-PROFIT
"One of the central health insurance pool, which is already an operational, more justifiable “Social
public policy ques- HMO” model for future healthcare reform than long-standing FOR-PROFIT insurance
tions for U.S. citizens models.
today is whether the
The hallmark of these non-profit “Social HMOs,” originally authorized by Congress’
richest nation on
enactment of the Deficit Reduction Act of 1984 and the federal government’s ex-
earth will continue to
pansion under the Omnibus Reconciliation Act of 1990, feature minimal to no out-
allow millions of poor of-pocket cost health insurance premiums guaranteeing affordable, equitable and
people to exist with- humane access to healthcare services.
out health insurance.
To do so violates bibli- Originally constructed to serve as an ―alternative nursing care‖ system that keeps
cal justice. How can senior citizens from being prematurely forced into nursing home facilities, these
any Christian read NON-PROFIT health insurers formally operate under the banner of being Social
what the Bible says Managed Care Plans; an organization that provides the full range of Medicare
about the poor and benefits offered by standard Managed Care Plans plus additional services which
what Jesus says include care coordination, prescription drug benefits, chronic care benefits covering
about the sick with- short term nursing home care, a full range of home and community based services
out hearing a divine such as homemaker, personal care services, adult day care, respite care, and medi-
call to demand that cal transportation. Other services that may be provided include eyeglasses, hearing
every person in this aids, and dental benefits. These plans offer the full range of medical benefits that
nation, starting with are offered by standard Managed Care Plans plus chronic care/ extended care ser-
the poor, have access vices. Membership offers other health benefits that are not provided through Medi-
to health insurance?" care alone or most other FOR-PROFIT/PRIVATE-SECTOR senior health plans.

— from "Just Generos- There are four NOT-FOR-PROFIT, Social Managed Care Plan organizations — SCAN
ity" by Ronald Sider, Health Plan of Southern California, Elderplan of Brooklyn, New York, Kaiser Health
founder of Evangeli- Foundation of the Northwest (Portland-Vancouver metropolitan area, Salem, Ore.,
cals for Social Action and Longview, Wash.), and Health Plan of Nevada of Las Vegas — that secured MA-
PD funding from Medicare in servicing several hundred thousand Seniors with
broad inpatient/outpatient and preventive health insurance coverage in their re-
spective regions.

The longest running of these ―Social HMOs‖ is the not-
for-profit SCAN Health Plan (www.scanhealthplan.com),
otherwise known as the Senior Care Action Network,
founded in 1977 by a group of Long Beach, Calif. area
seniors angered about some short-comings in the elder
healthcare sector. With the backing and help of area
doctors and other medical/caregiver practitioners join-
ing their management staff, SCAN secured its first MA-PD funding from Medicare to
offers health insurance and seniors-based healthcare services in 1985.



Today, SCAN provides insurance coverage and other wellness/preventive
healthcare services to over 110,000 seniors in seven Southern California
counties. Over the last year or so, SCAN has expanded its non-profit ser-
vices to senior residents of Maricopa County (Phoenix) in Arizona and has
drawn up plans to launch shortly in Northern California — potentially doubling
its number of Senior subscribers within the next year or two.

A key ingredient of SCAN’s success is its broad Southern California-area roster of
17,000-plus registered ―in-network‖ doctors and specialists
and over 150 hospital choices. SCAN’s remaining care menu
is quite broad and impressive to include other inpatient hospi-
tal care; outpatient doctor/hospital care; at-home care; emer-
gency admittance and transportation services coverage; a pre-
scription brand/generic drug program; vision services; dental
coverage; hearing; other no- to low-cost co-pays on a variety of
screenings and exams; and a wide array of preventive and
health-and-wellness services — features necessary for senior
care but MUCH GREATER than what could be found in either
standard Medicare and so-called “Cadillac Plans” from PRI-
VATE/FOR-PROFIT insurance carriers for the general under-65
population.

Most notably, out-of-pocket costs, or so-called co-pay ex-
penses to senior subscribers, come at mere fractions in the
two SCAN Health Plan choices — ―Classic‖ and ―Option‖ plans.
For example, an in-hospital stay of 1 day to 150 days incurs
out-of-pocket costs of up to $2,300 under the standard Medi-
care plan while SCAN’s ―Classic‖ plan has a maximum co-pay
deductible of $400 and the ―Options‖ plan has a $0 co-pay
deductible In fact, if you peruse either of SCAN’s two plans
(on both facing pages), most of the benefit categories feature
$0 co-pays/deductibles and hit a maximum of $100 for select
care services.

Adding frosting to the NON-PROFIT case, my next-door
neighbors, a senior-aged married couple and long-time SCAN
policy holders, both sing its praises by exclaiming that they
have ―guaranteed‖ emergency care/hospital coverage on a
―worldwide basis‖ if they go travelling abroad. Additionally, my
neighbors boast that they have an individual ―Personal Care
Representative‖ who has been assigned to each of them for
the duration of the SCAN memberships. They also empha-
sized they have ―never‖ had to deal with a disputed or denied
claim from SCAN, and their Personal Care Representative
―always handled outside billing issues‖ that either arose from
hospital or doctor/specialist procedures.

Perhaps the most intriguing figure comes from a Wikipedia.org estimate that SCAN
earns $1.3 billion in revenue from its direct billings to Medicare, which translates to



a premium cost of roughly $98 per month for each of its 110,000 sub-
scribers or $1,181 per year for its full array of covered services — al-
though Medicare’s database factors in the potential additional surcharge
www.transamericanalliance.org of up to $56 per month for SCAN’s Special Needs Plan (SNP) subscribers
and other ―options-based‖ premium charges. Still, the no-out-of-pocket-
cost premiums SCAN offers translate to little more than $2.00 above the
―minimum‖ base $96 per month Medicare deducts from seniors’ accounts (about
$1,157 for all of 2009).

Better yet, the most startling fact in this is that SCAN and
the three other major NON-PROFIT health insurance carriers
participating in the MA-PD program provide much higher
levels of premium coverage and at lower co-pay/deductible
costs and ―in-Medicare‖ monthly premium fees ($96 per
month) — at about one-fifth (20%) to one-quarter (25%) of
the cost of an average $400 to $500 per month (or $4,800
per-year premium average) of what FOR-PROFIT/PRIVATE
health insurance carrier charges on a premium for an indi-
vidual policyholder in the general under-65 population, ac-
cording to World Health Organization data.

If FOR-PROFIT/PRIVATE health insurance carriers label their
so-called top-of-the-line plans as ―Cadillac Premiums,‖ than
several ―Social HMOs‖ including SCAN’s Medicare-based
plans for seniors should be coined the ―Rolls-Royce Premi-
ums‖ of health insurance. It just proves that a greatly ex-
panded menu of benefits and lower deductibles and co-pays
are very achievable at a fraction of the monthly/yearly costs
of what FOR-PROFIT/PRIVATE health insurers offer.

An online trip to Medicare’s state-by-state and plan-specific
website (http://www.medicare.gov/MPPF/Include/
DataSection/ComparePlans/BenefitsAtAGlance.asp) reveals
a convenient database for searching out a wide array of
mostly FOR-PROFIT/PRIVATE health insurance carriers that
offer senior ―option‖ plans. Some of the plans are spon-
sored by the American Association of Retired People (AARP),
but they originate from FOR-PROFIT, pay subscription plans
(outside of standard Medicare-provided health insurance)
typically featuring considerably higher co-pays/deductibles
and far fewer coverage areas.

If you really want to get a true gauge of how seniors in
Southern California value their SCAN health plans, just give
a read of a May 2001 article in The Christian Science Moni-
tor. At the time, TCSM reported that SCAN garnered highly
favorable ratings from Consumer Reports, which found that
96 percent of SCAN subscribers would ―never leave the
plan‖ and 98 percent said they would recommend it to their senior friends. Basi-
cally, these NON-PROFIT ―Social HMOs‖ like SCAN offer as great or greater selection


of ―in-network‖ doctors, specialists and hospitals than what FOR-PROFIT/
PRIVATE insurers comparably offer.

Ratings from Medicare’s own online database typically rank both SCAN
www.transamericanalliance.org Health Plans — ―Classic‖ and ―Options‖ — each with scores of 4 out of 5 stars
when it comes to handling ―member complaints and those staying with the pro-
gram.‖ The same numbers of stars are accorded to SCAN for the prescription ―drug
pricing and patient safety‖ category as well. Similarly high ratings were attributed to
other NON-PROFIT ―Social HMOs‖ like Elderplan and Kai-
ser Foundation Health Plan of the Northwest.

The lone ―Social HMO‖ on the East Coast is Elderplan
(http://www.elderplan.org), a Brooklyn-based non-profit
founded 23 years ago and operating under the auspices
of the Metropolitan Jewish Health System, serving just
over 15,000 seniors in the five boroughs of New York
City. Although it operates on a much smaller scale than
SCAN, Elderplan’s five plan options similarly offer $0 co-
pay and deductible features across the board to a nearly
identical menu of ―in-network‖ inpatient, outpatient and
at-home services.

Kaiser Health Foundation of the Northwest offers a pair
of HMO plans, Senior Advantage Basic and Senior Ad-
Non-profit “Social HMOs” offer coverage at Public “Medicare-minimum”
vantage, but each have respective $39 and $99
rates, so it’s likely the savings would be greater than the 25% in the fur- monthly add-on premium charges and generally higher
thest right-hand bar if it would be operated as a “Non-Profit Insurance co-pays and deductibles than what SCAN and Elderplan
Exchange” — not solely as “For-Profit/Private Exchanges” proposed by
Congress and the White House.
offer as ―Medicare-minimum‖ premium values. The
slightly higher co-pay/deductible levels and additional
premium charges are somewhat in keeping with other FOR-PROFIT/PRIVATE carri-
ers offering Medicare exchange plans. Kaiser Health
Foundation of the Northwest is a non-profit organiza-
tion that is a MA-PD spinoff from the other FOR-PROFIT
Kaiser Permanente healthcare subsidiaries.

Health Plan of Nevada also offers ―Medicare mini-
mum,‖ no outside monthly cost premiums, but does
charge a low- to higher-range of co-pays/deductibles
and offers fewer coverage areas to about 25,000 sen-
ior members in the southern and northern regions of
the state. However, FOR-PROFIT insurance giant Unit-
edHealth Group acquired Health Plan of Nevada’s over-
all under-65 health insurance business (serving close
to 500,000 subscribers overall) in early 2008, but was
required by the U.S. Justice Department to divest own-
ership of the NOT-FOR-PROFIT ―Social HMO‖ senior
Allowing FOR-PROFIT, “free-market” forces to go unregulated has proved
disastrous — while government “incentivized” NON-PROFIT ventures like care arm of the company to be fall into compliance with
Medicare-based “Social HMOs” have proved hugely beneficial to Senior the deal. It is not immediately known if the ―Social
Citizens. HMO‖ has yet been fully divested from the UnitedHealth
Group-owned parent company or discontinued entirely.



That is why it is so vitally important for any ―true‖ healthcare reform to
take place in this country, our government needs to step up and use the
weight of its legal authority to untangle FOR-PROFIT/PRIVATE health insur-
www.transamericanalliance.org ance carriers from a future ―Universal Healthcare‖ system. Given the ongo-
ing criminality of FOR-PROFIT/PRIVATE health insurance practices, where
Americans are either DYING or currently suffering from GROWING TERMINAL ILL-
NESSES due to DENIED CLAIMS, there is NO constitutionally justifiable reason why
American lives are being weighted or balanced ver-
“Both the President‟s and Baucus‟ plans still sus the model of MAXIMIZING AND MINIMIZING
fundamentally fail to address how the FOR-PROFIT/ RISKS so entrenched into our long-standing FOR-
PRIVATE health insurance industry has been PROFIT/PRIVATE system up to today.
artificially inflating the prices of premiums (most
In his speech to a joint session of Congress on
likely due to covering excessive executive
September 8, Pres. Obama reiterated a verbal-only
compensation, bloated administrative overhead and proposal to create a ―non-profit insurance ex-
an overstated emphasis on maximizing earnings and change,‖ conceivably featuring a pool of FOR-
profit margins) while increasingly chipping away at PROFIT/PRIVATE health insurance carriers for con-
coverage options and placing higher co-pay and sumers to pick the ―most competitively priced
deductible burdens on the backs of consumers. plan‖ that fits their needs. On September 16, Sen.
Essentially, it is a „middleman‟ system where the Baucus then released his ―Chairman’s Report,‖ an
consumers pay more but get less in return.” $856 billion, 10-year plan, that would similarly fea-
ture a ―State Insurance Exchange‖ program and
FOR-PROFIT/PRIVATE-based healthcare ―cooperatives.‖ This is just pouring more
taxpayer money into the pockets of cor-
rupt FOR-PROFIT/PRIVATE carriers, who
were the same $4 million contributors to
Sen. Baucus’ latest fundraising dinner
last May.

While sounding and appearing like po-
tentially attractive, reasoned proposals,
both the President’s and Baucus’ plans
still fundamentally fail to address how
the FOR-PROFIT/PRIVATE health insur-
ance industry has been artificially inflat-
ing the prices of premiums (most likely
due to covering excessive executive com-
pensation, bloated administrative over-
head and an overstated emphasis on
maximizing earnings and profit margins)
while increasingly chipping away at cov-
erage options and placing higher co-pay
and deductible burdens on the backs of
consumers. Essentially, it is a
Under The Commonwealth Fund’s study offering three different healthcare plan scenarios, it is ―middleman‖ system where the consum-
an inescapable fact that offering up a “Public Plan” based on Medicare rates — such as that
the long-term projected savings of up to $56 billion by 2020 — would be most ideally maxi- ers pay more but get less in return.
mized under a nonprofit-based “Health Insurance Organizational” proposed by TANC.
Medicare already runs an ―exchange-
like‖ system where senior consumers can choose from a pooled menu of largely


FOR-PRIVATE/FOR-PROFIT coverage plans, with the American Association
of Retired People (AARP) even serving as a clearinghouse/sponsor for
lower-cost ―Medicare Health Plans.‖ But many of these ―exchange‖ option
plans — coming from such Big Health Insurance companies as UnitedHealth
www.transamericanalliance.org Group, CIGNA, Aetna, Coventry, Wellpoint, Anthem Blue Cross/BlueShield
and Humana — are still priced considerably higher, with additional ―out-of-
pocket‖ monthly premium charges and other higher Medicare ―estimated costs‖
compared to what the handful of NON-PROFIT ―Social HMOs‖ charge in most cases
to be ―Medicare-minimum‖ base rates. (The most noticeable differences in Medi-
care’s customizable/comparable database comes from what FOR-PROFIT/PRIVATE
insurance carriers typically charge in additional ―out-of-pocket‖ monthly premium
fees, higher co-pays and deductible
costs, and generally offer consid-
erably smaller menus of ―covered‖
care services.)

Plain and simple, the excessively
high levels of executive compensa-
tion for PRIVATE/FOR-PROFIT insur-
ance, bloated administrative over-
head costs and the 20%-plus profit
margins of the Big Insurance Carri-
ers (please refer to the accompany-
ing charts), truly reflect the inordi-
nate disparity of what they charge
versus what NON-PROFIT carriers
can charge on a much lowered-priced, feature-rich basis. It is also an accurate re-
flection of the grossly inequitable, unethical and often CRIMINAL business practices
of FOR-PROFIT insurance and why Americans are literally ―paying through their
teeth‖ for less healthcare.

Additionally taking into account the
outright DENIALS of medical proce-
dure claims for at-risk patients and
the often arbitrary revocations of
premium holders for have what Big
Insurance deems are ―preexisting
conditions‖ to meet the ―business
model‖ of MAXIMIZING PROFIT
AND MINIMIZING RISKS common
with Big Health insurance, are
wholly UNETHICAL and frequently
MORALLY CRIMINAL…purely on a
Constitutional Law basis.

In these proposed ―exchange systems,‖ where some lower-income/disadvantaged
Americans will conceivably have the ability price out ―low-cost‖ insurance premiums
but may actually face paying ―penalties‖ for not having coverage under Baucus’
original plan, there are still massive inequities in what being laid out in both the
Congressional and White House proposals. Even the President has not elaborated


on how to get the Big Health Insurance Carriers to seriously modify and
reform their business practices away from their historical strategies of
monopolizing/consolidating the marketplace with exploitive and punitive
actions directed at American consumers.

In fact, I am not even sure if the President realizes it yet, but his marginal-
ized, verbal-only vision of a ―non-profit insurance exchange‖ carries merit, but it ac-
tually should be broadened out to mandate that Health Insurance Carriers can only
reform their CRIMINAL business practices by
dropping their exploitive and predatory PRI-
VATE/FOR-PROFIT status and instead adopting
NON-PROFIT roles going forward. And that
NON-PROFIT organizational model, which once
flourished when religious hospitals and family
clinics were founded in America during the
18th to early 20th centuries, is something that
could have broader applications beneficial to
other segments of healthcare in America to-
day.

For those reasons, our non-profit citizens’ ad-
vocacy and ―Direct Democracy‖-based organi-
zation, Trans-American Alliance for a National
Consensus (TANC), is proposing that the Presi-
dent and Congress crafts healthcare reform
legislation that 1) funds and fosters the crea-
tion of NON-PROFIT health insurance carriers
in structures similar to Medicare’s ―Social HMO‖ organizational architecture; and 2)
presents FOR-PROFIT/PRIVATE Big
Insurance carriers the opportunity
to convert to NON-PROFIT status or
face the consequences of not par-
ticipating in the ―exchange pro-
gram‖ and facing the specter of
U.S. Justice Department and Con-
gressional ―criminal investigations‖
into DENIAL-based patient deaths,
the alarming rise of terminal ill-
nesses, debilitation, and other
needless suffering in other cases.

This is a time when Congress, the
White House and other federal in-
vestigatory agencies need to live
up to their Constitutional oaths to
uphold the law and end this long-
standing corrupt pattern of busi-
ness practices in the healthcare
industries — the only thing Big
Health Insurance will yield to is if


know the federal government is going to use its full weight of its authority
to uphold laws and enact serious reform to re-regulate their business prac-
tices. Given that total healthcare costs currently eat up to 17% of the
United States’ Gross Domestic Product (GDP), or roughly $2.5 trillion of
www.transamericanalliance.org nearly $15 trillion in total GDP for 2009 (according to World Health Organiza-
tion estimates), the world’s most expensive healthcare system will eventually
implode under the sheer weight of its excesses and lead to an even greater public
health crisis/catastrophe in the near future.

On that front, TANC has formed a pair of Facebook ―Cause Groups,‖ the
most critical being a ―Petition for the Federal Government to Open CRIMI-
NAL INVESTIGATIONS into DENIED Patient Deaths” (http://
apps.facebook.com/causes/340854/54103574?m=611088da) to compel
our government not to let this long-standing pattern of criminality in the
health insurance industry go unpunished.

Secondly, TANC ideally hopes the proposals laid out in this position paper
can be used as springboard for our Facebook Cause Group initiative to
“Petition for a CITIZENS’ SUMMIT on U.S. Healthcare Reform” (http://
"Every person has the apps.facebook.com/causes/332619/54103574) to lay to out a set of proposals
right to adequate for a truly OPEN PUBLIC-FORUM debate — a draft bill-making process for American
health care. This right citizens to offer as template and blueprint for our ―elected‖ representatives to pos-
flows from the sanctity sibly follow as “THE WILL OF THE AMERICAN PEOPLE.” Even if our federal gov-
of human life and the ernment chooses to dismiss this summit and draft bill, it will forever be on-the-
dignity that belongs to record where American citizens decided the future direction of Healthcare Reform
all persons, who are should go!
made in the image of
If the health insurance industry does concede that its business practices need
God... Our call for
drastic reform and it abides by new government regulatory actions, TANC has set
health care reform is
forth detailed recommendations for the Congress and the White House — at the
rooted in the biblical
very least — to SET MINIMUM PROFIT MARGIN CAPS and LIMITS ON EXECUTIVE
call to heal the sick and COMPENSATION AND BONUSES for the PRIVATE/FOR-PROFIT Health Insurance
to serve 'the least of Carriers. The other major option the federal government can present is that a
these,' the priorities of funding program based on new, minimal corporate taxes and a special tax assess-
justice and the princi- ment on companies producing and distributing ―unhealthy/addictive consumable
ple of the common products‖ be used to help fund their conversion into NON-PROFIT Health Insurance
good. The existing pat- Organizations (HIOs).
terns of health care in
the United States do no To accomplish steps necessary for the NON-PROFIT conversion of Private/For-Profit
meet the minimal stan- Health Insurance, TANC is proposing the following preliminary scenarios:
dard of social justice
1) De-list FOR-PROFIT/PRIVATE-SECTOR Insurance Companies from
and the common good."
stock exchanges and Re-File under ―Non-Profit Articles of Incorpo-
— Resolution on Health ration‖ — Much in the same way the federal and state government
Care Reform, U.S. Catho- issue interest-bearing bonds, the federal government can serve to
lic Bishops, 1993, com- guarantee bond funds to participating Private-Sector Insurance
ing before the Clinton Carriers an exchange in expediting the buyback of shares from
Administration's failed large institutional investors, hedge funds and individual share-
efforts at achieving U.S. holders in these publicly-held corporations. By unlocking them-
healthcare reform. selves from the control of large shareholders, some of whom own


large blocks of stock and exercise considerable control of
―voting‖ shares and seats on the Board of Directors for these Big
Insurance corporations, the government is effectively alleviating
the health insurance carrier of typical outside ―marketplace pres-
sures‖ to meet certain per-share earnings and profit projections –
in addition to eliminating ―conflicting agendas‖ and ―hostile take-
over‖ scenarios, sometimes those arising internally from their own
Board of Directors and/or large-block shareholders.
"To be without health
insurance in this coun- 2) The federal government forms the temporary FEDERAL NON-
try means to be with- PROFIT HEALTHCARE CONVERSION ASSISTANCE CORPORATION
out access to medical with the mandate of helping Health Insurance Companies and
care. But health is not potentially other FOR-PROFIT Healthcare entities un-tether them-
selves from outside investors and other marketplace-driven forces
a luxury, nor should it
— The mission of this federal program will be solely to assist par-
be the sole possession
ticipating FOR-PROFIT Health Insurance Carriers with bond-issue
of a privileged few. We
funding to buyback the publicly-traded shares from major institu-
are all created b'tzelem tional investors and individual shareholders. Once buyers of
elohim — in the image these bonds (including investors and non-profit foundations, etc.)
of God — and this reach maturity and can be paid off (within the next 5 to 10 years),
makes each human life the government can effectively liquidate/disband the FEDERAL
as precious as the next. NON-PROFIT HEALTHCARE CONVERSION ASSISTANCE CORPORA-
By 'pricing out' a por- TION once all the conversions are completed.
tion of this country's
population from health 3) The buyback of publicly-traded shares, with the assistance of gov-
care coverage, we mock ernment-backed bonds can be timed to mature in 5 years to 10
the image of God and years, or less — This would allow the once-publicly traded/for-
destroy the vessels of profit Health Insurance Carrier to recoup all costs related to the
God's work." buyback share plan as well as covering any other debts incurred
by the organization before converting to NON-PROFIT status. Mon-
— Rabbi Alexander ies from the government bond issues will also allow for a sliding
Schindler, Past Presi- scale of a 5% to 25% premium to be paid over the Health Insur-
dent, Union of American ance Carrier’s ―current‖ per-share stock market price, which will
Hebrew Congregations be based on any potential negative short-falls some shareholders
(1992) may still incur from what they originally paid on a per-share basis.
This is to make sure both the investor/shareholders, lien holders
and the company are reimbursed and properly covered at
or slightly above their original investments — so it effec-
tively un-encumbers Health Insurance Carriers from any
outside FOR-PROFIT interests and outside marketplace
forces.
4) Upon their incorporation as NON-PROFIT Health Insur-
ance Organizations (HIOs), participating insurance carriers
will still be able to service their roster of current premium-
holding customers on their existing levels of premium cov-
erage but able to do it closer in line with lower cost Medi-
care-based rate structures — The maintaining of premium
subscriptions with the HIO’s current roster of customers will
also address concerns some consumers have about being
forced into ―universal access‖ Public-Option plans offered to low-


income individuals and families. Moreover, current policy-holders
will benefit from LOWER MONTHLY/ANNUAL PREMIUM COSTS due
to the NON-PROFIT restructuring of health insurance, in addition
to likely seeing their DEDUCTIBLE and CO-PAYMENT cost contribu-
www.transamericanalliance.org tions greatly reduced or eliminated. Employer-compensated will
also great benefit from lower individual and family plan premium
costs, much as described above.
5) ―Universal Access‖ will also be a mandatory requirement as a re-
sult of a Health Insurance Organization’s NON-PROFIT, TAX-
EXEMPT STATUS, meaning a ―Public
Option‖ program will be made available
to low-/no-income Americans who
can’t afford to obtain coverage on a
reviewed, as-needed basis — By tap-
ping into a special 1% or 2% general
U.S. Corporate Healthcare Tax levy,
which could bring in anywhere from
$140 to $280 billion annually in an-
nual revenues (depending on the state
of the economy and final dollar-
generation figures from annual Gross
Domestic Product totals) to help cover
non-profit HIOs offering the same kind
of individual and family premiums offer
to its regular customers. Currently, cor-
porations pay the equivalent of 2.5% of
the Gross National Product, or roughly
$378 billion in corporate taxes in 2008
while ―individual‖ American taxpayers
paid roughly 8% of the GDP or roughly $1.2 trillion in individual
taxes. So, if corporations pay an additional 1% to 2% corporate tax
(rather than individual taxes), they will
still realize much larger immediate sav-
ings to their bottom-line expenses
through a drastically reduced NON-
PROFIT health insurance system. Addi-
tionally, due to the disproportionately
large burdens placed on the healthcare
system by unhealthy/addictive consum-
ables — tobacco, alcohol, fast foods,
sweetened beverages, candy/
confectionery products, and packaged
snack foods — could be assessed a spe-
cial 5% to 10% corporate tax based on
their gross sales revenue volume, possi-
bly raising between $25 billion to $50
billion in new tax revenue to help subsi-
dize a ―Public Option‖ program (see the accompanying chart).
These unhealthy/addictive consumables account for the greatest


burdens and biggest public health risks that require inordinately
larger public/private expenditures from America’s healthcare
system budgets. So, the producers and distributors of these un-
healthy/addictive consumables should shoulder an additional tax
levy as part of ―social responsibility‖ to help assist in funding a
―Public Option‖ system, which originates from a ―10% Reform”
healthcare reform tax proposal submitted by Facebook Friend,
Andy Freeman (no relation). Currently, it is estimated that there
are 47 million uninsured American citizens, so on a cost-level
comparable to ―Medicare-minimum‖ base rates (for
Senior Citizens), the full rolls of ―uninsured‖ being
extended ―Public Option‖ premiums could come to
a total cost of $188 billion annually with an average
―non-profit‖ premium adjusted to a cost of $2,500
to $3,000 per year – in reverse of the ongoing
trend of $4,800 to $6,000 annual costs for individ-
ual premiums and upwards of $12,000 to $14,000
annually for family premiums that are UNATTAIN-
ABLE for low-income families on an out-of-pocket
basis.
6) Limits on senior management/executive
salaries and bonuses — One of the key driving
forces for the escalating costs of healthcare in this
country is the ever-escalating rise in senior manage-
ment executive pay and administrative overhead
costs. Currently, the top Chief Executive Officers
(CEOs) of the ―Big 6‖ of Health Insurance — CIGNA, UnitedHealth
"The health of a society is
Group, Aetna, Humana, Wellpoint and Coventry — take home an
truly measured by the
average of $11 million in pay annually (see chart on page 8), but
quality of its concern
and care for the health
stock options typically carry overall compensation into the HUN-
of its members... The DREDS OF MILLIONS OF DOLLARS once shares are exercised for
right of every individual sale. For example, UnitedHealth CEO Steve Hemsley took home
to adequate health care $3.2 million in pay for 2008 but his unexercised stock options are
flows from the sanctity valued at $744 million, translating to roughly $700 out of each
of human life and that UnitedHealth customer’s monthly bill paid on a premium for one
dignity belongs to all hu- year, according to SickforProfit.com. Despite the groundswell of
man beings... We believe public criticism over excessive CEO pay in this country (especially
that health is a funda- in light of the federal government bailouts of corporate institutions
mental human right failing to immediately address excessive executive pay and bo-
which has as its prereq- nuses), the average CEO across all U.S. industries took home
uisites social justice and $10.8 million in total compensation annually — about 364 times
equality and that it the pay of the average American worker ($29,670 per year), ac-
should be equally avail- cording to an Associated Press survey of 386 of the top Fortune
able and accessible to 500 companies. All of this points to why healthcare costs are ris-
all." ing faster in the United States than in any other countries in the
-— Imam Sa'dullah Khan, world — largely due to excessive, undue executive costs, bloated
The Islamic Center of administrative overhead and investor/marketplace pressures to
Southern California maintain fat profit margins. Under a new NON-PROFIT Health In-
surance structure, executive compensation should be capped at


3% to 10% of their current average, or about $300,000 to $1 mil-
lion per year, and maybe at 3% to 6% of current levels for other
senior-level management below CEO.

www.transamericanalliance.org 7) Each of these freshly converted NON-PROFIT Health Insurance
Organizations (HIOs) will begin search processes for a new,
―independent‖ Board of Directors, inclusive of medical practitio-
ners, caregivers, first-responders and other non-profit hospital/
family clinic administrators — The proposed composition of these
Boards will effectively help guide newly-converted NON-PROFIT
Health Insurance Organizations to gather input and direction of
how to better interact in a more responsive
and efficient manner by observing a newly-
created ―UNIFORM HEALTH INSURANCE IN-
DUSTRY STANDARDS” for the processing of
medical billings and claims with hospital and
family clinic administrators, in addition to at-
home caregiver and rehab services. Uniform
standards for the claims and billing proc-
esses will greatly cut down on the red-tape
and hassles many hospitals and family clinic
physician centers deal with currently in a
patchwork, haphazard and non-uniform PRI-
VATE/FOR-PROFIT system insurance carriers
undertake in states across the country – ef-
fectively reducing hourly manpower costs in trying reconcile bill-
paying claims procedures.

8) To insure and maintain compliance on a newly structured national
UNIFORM INSURANCE INDUSTRY STANDARDS, it would be advis-
able to form ―independent‖ HEALTH SER-
VICES PROVIDER AND PEER REVIEW
BOARDS to regularly review Health Insur-
ance Organizations’ compliance with
various claims and billings reconciliation
processes — These kind of board re-
views, which can be conducted on an
open hearing basis, can also allow any
policy subscribers (either ―paid‖ or
―publicly-subsidized‖ subscribers) to reg-
ister any complaints and concerns to an
―ombudsman-like panel‖ regarding is-
sues that need to be addressed and cor-
rected with these new NON-PROFIT
Health Insurance Organizations.

Some partisans within the PRIVATE/FOR-PROFIT
Health Insurance industry will likely be reticent
and clearly reluctant to consider a NON-PROFTIT organizational model, but given
the roughly 75-year history of their resistance and lobbying efforts against Health-



care Reform (dating back to the World War II efforts of the Franklin D.
Roosevelt Administration), more vigorous publicly-generated petition and
legislative efforts need to be taken today.
Somewhere lost in the hysterics and vitriol that has marked the national
Healthcare Reform debate in America is a serious, reasoned and sane explora-
tion of how to craft a ―Universal Healthcare‖ system that somehow answers and
assuages fears from some corners about a ―Government-run, Socialist Healthcare
System.‖ It may surprise some congressional Re-
publicans, most of whom think ―Big Government‖
and ―Socialized Healthcare‖ are the inevitable re-
sults of a reformed healthcare system, that TANC’s
non-profit proposal is similarly based on the premise
that the federal government should NOT be involved
in the day-to-day operational management of health
insurance and healthcare services in this country.

Given the growing divisions and rancorous allega-
tions being tossed within the halls of Congress and
the White House in this largely CLOSED-DOOR/
CLOSED-FORUM debate and legislative proposal
process, it is particularly understandable why the
various political factions and BIG HEALTHCARE LOB-
BIES and other well-funded special interest groups
have disseminated a head-dizzying array of MISIN-
FORMATION, PROPAGANDIZING, STIGMATIZING and
DEMONIZING about ―Universal,‖ ―Single-Payer‖ and so-called ―Public Option‖
healthcare systems — particularly against those already being practiced in over 50
countries around the world today.

Recent proposed ―compromise‖ plans for instituting
some form of national Healthcare Reform have pro-
duced what many Americans and the media have
derided as either ―watered-down‖ half-measure solu-
tions or have just been flatly rejected for injecting
any kind of government-/taxpayer-financed ―Public
Option.‖

It has been estimated that roughly 22,000 American
citizens unnecessarily die annually due to either
―inadequate‖ health insurance coverage, denied/
delayed claim payouts for treatment or being unem-
ployed and unable to afford PRIVATE health insur-
ance coverage, according to Institute for Medicine
research. A recently release Harvard University
study found that up to 45,000 patient die annually
(one every 12 minutes) due to a lack of insurance
coverage and quality healthcare services. However, the National Center of Policy
Analysis, a Washington-based think tank backing a free-market/private-sector ap-



proach to healthcare, countered that the Harvard study overstated the
―death risk‖ and did not track for how long the subjects were uninsured.

On top of the current, nearly three-year-old economic recession, the most
www.transamericanalliance.org dramatic, darkly illustrative byproduct of growing unemployment (more than
doubling from 4.7% at the beginning of 2006 to 9.7% in August 2009), the num-
ber of UNINSURED Americans has risen to an estimated 47 million American citi-
zens, according to U.S. Bureau of Labor and U.S. Department of Commerce statis-
tics. This growing number of the UNINSURED Americans has created a rising, fes-
tering public healthcare crisis — nearly universally decried by medical practitioners,
caregivers, first-responders and hospital administrators — that our ―elected‖ repre-
sentatives can’t ignore any longer…even with the roughly $2.3 billion in political
contributions by the INSURANCE LOBBY from 1998-2006 (source: OpenSecrets.org)
to maintain the status quo of America’s ―Have or Have-Not,‖ FOR-PROFIT HEALTH
Please click the hyperlink
INSURANCE SYSTEM.
with this photo for one of
the most revealing, infor- Given the poor economic climate and the alarming rise in unemployed and unin-
mative interviews PBS‟s sured Americans, other immense public pressure if coming down on the FOR-
Bill Moyers had with for- PROFIT/PRIVATE health insurance over its burgeoning ―DENIALS-BASED‖ business
mer CIGNA executive practices and other allegations of manipulating the marketplace, artificially inflating
Wendell Potter, a whistle-
blower who speaks in de-
pricing and shifting the costs of deductibles and co-pay charges to consumers, even
tail of insurance industry with ―employer-based‖ premiums.
practices and with insider
knowledge of CIGNA‟s foot Over the last few months, the California Nurses Association successfully lobbied
-dragging claims DENIALS state Attorney General Jerry Brown Jr. to mount a full investigation into what the
involved in the death of
group claimed were 45 million ―suspect‖ denied claims for medical treatment of
Nataline Sarkisyan.
patients — unlawfully carried about by major FOR-PROFIT/PRIVATE-SECTOR health
insurance companies in the state. SmartMoney.com re-
cently reported that out of 1 billion medical claims filed
nationally with PRIVATE/FOR-PROFIT insurers, as many as
75 million claims annually are ―rejected outright, leaving
patents unable to get treatment or stuck with medical bills
that add up to at least $50 billion annually.‖

Furthermore, Sen. Patrick Leahy (D-VT) is leading the
charge on a pair of Congressional bills (S. 1681 and H.R.
3596) under the Health Insurance Industry Antitrust En-
forcement Act banner to bring an end to the 64-year-old
exemption that the health insurance industry has been
allowed to operate outside the federal Sherman Antitrust
laws — rules that ―protect consumers from anti-
competitive practices like price fixing,‖ Leahy wrote in his
email blast to the American public.

―They can pick and choose their customers and deny cov-
erage to anyone with any sort of pre-existing condition --
even acne. They can get away with dropping your coverage
when you get sick,‖ Leahy wrote. ―Passing health care re-
form with an effective public option is one key way to pro-



mote competition in the health insurance marketplace, but we must
also eliminate the unjustified and unnecessary antitrust exemption cur-
rently enjoyed by insurance companies.‖
Sen. Leahy went on cite an unnamed ―recent study‖ that when one or two of
the handful of major FOR-PROFIT Big Insurance Carriers control found 94% of
the American health insurance markets across the country, it means ―every year
consumers are paying more for less coverage.‖

When insurance companies know they don’t have to compete, they don’t,‖ Leahy
added. ―When they know they can get away with raising your premiums every year,
they do. And when they know they can deny you coverage without consequence,
they'll leave you high and dry. The Health Insurance Industry Antitrust Enforcement
Act, which I introduced in the Senate in [mid-September 2009], is not the be all and
end all of necessary reform, but it is a
key way we can give consumers more
choice in the health insurance market-
place.‖
Nataline Sarkisyan
As the result of this ―DENIAL-BASED‖
"Health security is an issue private health insurance system, millions
that affects all of us. Every of Americans either live in dire fear of
person has a fundamental ever using their PRIVATE health insur-
human right to quality ance plans (and risking higher premium
healthcare — healthcare costs, higher deductibles or outright pol-
that is affordable, accessi-
ble, and compassionate. As
icy cancellations for having ―preexisting conditions‖) or having no coverage at all
the nation begins to trans- and risking going into bankruptcy due to a mountain of incoming medical bills.
form the healthcare system Wikipedia.org cited an un-sourced ―recent study‖ that found uninsured and uncov-
to one that is sustainable, ered, denial-based medical expenses played a ―significant factor‖ in 60% of all per-
it will be important that sonal bankruptcies filed in the United States.
we, as a society, ensure
that healthcare in the U.S. Even those who thought they had good
respects the dignity of insurance coverage took pause at the
every person and delivers story of Nataline Sarkisyan, a 17-year-old
the quality, compassionate
care we expect and de-
Los Angeles girl who died while her health
serve. Meaningful reform insurance carrier, CIGNA, hemmed and
will require dialogue, the hawed over whether to pay for her live-
acceptance of diverse views saving liver transplant surgery. CIGNA
and above all, compromise. deemed Sarkisyan’s badly-needed and
With the human right of delayed liver transplant surgery an
healthcare at stake, all of ―exploratory procedure‖ and this came
us must work together to despite UCLA Medical specialists citing instances where they had performed the
make sure future genera- transplant surgery successfully before. Nataline passed away while awaiting the
tions inherit a healthcare
system that embraces qual-
transplant in December 2007 — although CIGNA finally relented in approving her
ity and compassion." claim (after massive public outcry against the insurer) just a day before she died.

— Catholic Healthcare West's Sarkisyan’s story is one that rings familiar in denial-based cases where other Ameri-
Perspective, as printed in cans have died while awaiting critical life-saving surgeries and can be found, along
their Health Security Index, with other stories about prolonged, growing terminal illnesses and other suffering at
Spring 2007



-risk patients have endured, at film documentarian Robert Greenwald’s
healthcare advocacy site, www.SickforProfit.com.
If all or some of the Big Health Insurance carriers reject the NON-PROFIT
www.transamericanalliance.org conversion program model TANC is proposing here, then this federally-funded
program should be entirely focused on fostering the creation of new NON-PROFIT
Health Insurance Organizations and/or expanding the ex-
isting Medicare-based ―Social HMOs,” such as SCAN and
Elderplan, into the general under-65 marketplace. Allow-
ing greater NON-PROFIT participation will generate lower
pricing competition in the marketplace that could similarly
create new ―market-driven forces‖ to drive down the artifi-
cially inflated pricing from FOR-PROFIT/PRIVATE insurance
carriers.
The benefits of creating and fostering the growth of NON-
PROFIT carriers are many:
• Larger, feature-rich menus of inpatient and outpa-
tient coverage areas and prescription drug assistance
on a low- to no-cost basis available to all American
consumers.
• All medical procedures, doctor visits, preventative/at-home care and
screening exam tests are completely covered
with no chance of DENIALS or REVOCATIONS
of premiums if someone is identified with a
―preexisting condition.‖
• A large selection of in-network Primary Care
Physicians (PCPs), specialists, hospitals, emer-
gency care, family clinics, outpatient treatment
facilities, at-home caregiver services and low-
to no-cost prescription drug services.
• Even if corporations pay a 1 to 2 percent
special corporate tax to fund NON-PROFIT
healthcare, these companies will quickly real-
ize greater overhead savings with lower
―group‖ coverage policy costs — realizing that
a current ―individual‖ employee premium will
drop more than half in cost from about $6,000
Under the 3 scenarios proposed by The Commonwealth Fund (with research from annually while a typical ―family-of-four‖ pre-
the Lewin Group), the “Public Plan” — based on setting rates at “Medicare- mium will similarly drop by more than half from
minimum” levels — offers most optimal long-term reduction in federal outlays (at
nearly $3 trillion) over the next 10 years. But, imagine how much higher the sav- its annual $12,000 to $18,000 range today.
ings would be in all-nonprofit organizational health insurance system.
• There will be NO day-to-day, ―invasive‖ in-
volvement of the federal government in ―managing‖ a NON-PROFIT
healthcare system, only badly-needed regulatory and legal oversight.



• Non-profit HIO carriers will be able to charge middle- to upper-
income consumers directly for their premiums, incrementally lower-
ing the amounts of special federal startup and long-term funding.
• Low- to no-income Americans get ―Public Option‖ coverage through
the general and special corporate taxes on ―unhealthy/addictive‖ prod-
uct categories on a reviewed, ―as-needed‖ basis.
• People who choose stay with their FOR-PROFIT/PRIVATE carriers can
stay with their option plans, but will likely also realize a considerable
lowering in monthly/yearly premium costs because of the new-found
"Science may competition from an emerging and expanding offering of NON-PROFIT
have found a Health Insurance Organizations entering into the marketplace.
cure for most
evils, but it has • Adoption of new ―UNIFORM INSURANCE INDUSTRY STANDARDS” will
found no greatly reduce or eliminate red-tape hassles that medical practitioners,
remedy for the hospitals, family clinics and other caregiver services must deal with in
frequently arbitrary DENIALS on billings/pay-out claims — thus having a
worst of them ―snowball-effect‖ on greatly lowering hourly administrative and outside
all — the collection agency costs to reconcile billing statements.
apathy of
human beings." • The emergence of a flourishing, growing NON-PROFIT health insurance
market could also have the ―domino effect‖ of leading to the de-listing
of other FOR-PROFIT/PRIVATE healthcare companies — rekindling the
— Helen Keller founding spirit of ―social contract‖ non-profit, religious- and publicly-
funded hospitals and other caregiver services.
• Jobs in the health insurance and other healthcare sectors will be more
stable and secure in a NON-PROFIT organizational model — a much
more professionally and person-
ally rewarding experience would
await those who currently toil in
the FOR-PROFIT/PRIVATE arena
and switch to NON-PROFIT roles
in fulfilling a vital ―Social Con-
tract‖ dedicated to aiding the
health and well-being of Ameri-
cans.
Hopefully, more than anything, this
potential reinvigoration of NON-
PROFIT health insurance can get top-
to middle-level executives, adminis-
trators and highly-skilled medical
practitioners to look inside at a
healthcare system badly in need of
reform when it comes to overhead
costs and compensation. Reform of
the health insurance industry, like all
other sectors of healthcare, has to


"Rx for U.S. Healthcare Reform" - A Position Paper from TANC

"Rx for U.S. Healthcare Reform" - A Position Paper from TANC

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"Rx for U.S. Healthcare Reform" - A Position Paper from TANC