QUESTION #3: How did we get to where we are with our current healthcare system?


Twila Brase:

“…So, I think people are probably very surprised, maybe, at where we are. They don’t understand it, but all you have to do is look back in the history and you can see how we got there. So, in a very quick history lesson here, in the 1940’s Congress put wage and price controls, and employers came to Congress and said, “Well how can we compete for employees?” And so they came up with this idea of offering health insurance. And so, about 12 years after that they put health insurance into law, by employers, and allowed them to count it as a business expense. Now employers get this tax deduction whenever they offer employee coverage.

That really grouped people into their employers and made them captive, and a lot of people don’t look at it this way, but really before that people used to have their own insurance or they just paid cash to get care. And so then, what came along in 1965 is national healthcare for seniors and for the poor, called Medicaid, and Medicare. And these are really, for Medicare, it’s really a single payer system for seniors, although seniors are paying a lot out of their pocket for it, but the government makes all the rules. Medicaid is basically state based and federal, and sort of half and half, depending on what state you’re at, but still the federal government has a lot of rule making in there. Well that was 1965. What Congress discovered was there was a run on the US Treasury. 19 million people who had never paid a dime for Medicare suddenly had access to free care, all they wanted. And the doctors in the hospitals were looking at a really big pocket book, and so they increased what they charged for care, sometimes double or quadruple.

And so, Senator Kennedy, Ted Kennedy, who’d been looking for a way to single payer, and was supportive of Medicare being the first step into there, said, “Here’s an idea. We will mandate the HMO be built across the country.” And he and Richard Nixon together agreed to do this, and so the HMO act of 1973 passed, and it merged the delivery of healthcare with the financing of healthcare, which is a serious conflict of interest. And now that HMO has merged and come together, it’s really all managed care and people call it today their health plan. But it is what Kennedy and Nixon put across the country. And then they added it to Medicare, and I think it was 2003, where they created the Medicare advantage program, HMO’s for seniors. And that was Kennedy’s plan, was that the HMO’s would ration care at an arm’s length from Congress. Congress couldn’t be blamed, the HMO’s or the health plans could be blamed.

And then finally we have Obamacare, which essentially gave the entire market to the managed care organizations, to the health plans, and actually prohibits catastrophic coverage unless you are under the age of 30. So only people 1-29 can have catastrophic coverage plans, which is the only true insurance that there is. And that’s the brief history of how we got to where we are.