June 24, 2008

Private Health Insurance Is Not Part of the Health Care Solution, Consumer Advocates Tell Congress

National Single-Payer Plan Would Save Billions in Administrative Costs and Thousands of Lives a Year

WASHINGTON, D.C. - Congress must eliminate the private insurance industry and implement a national single-payer system if it wants to achieve true health care reform, two leading patient advocates told a U.S. House of Representatives subcommittee today.

Replacing private insurance companies with a national health insurance program could save $400 billion a year in excessive administrative costs, provide coverage to the 45 million people in the United States who are uninsured, and help prevent the more than 18,000 deaths a year from a lack of health insurance, said Dr. Sidney Wolfe, M.D., Public Citizen’s acting president, and Dr. Steffie Woolhandler, M.D., co-founder of the Physicians for a National Health Program.

"The real question is why should we tolerate the fragmented, highly profitable, administrativelywasting private health insurance industry any longer?" Wolfe told the Energy and Commerce Committee’s Health Subcommittee.

The health insurance and pharmaceutical industries thrive on the current decentralized system because there are no price controls and insurers can turn away patients who are "unprofitable," Wolfe said. The insurance industry makes huge profits by denying care, paying out as little as it can and insuring only the healthiest patients, he said.

Families with supposedly good coverage are just one serious illness away from financial ruin, Woolhandler told lawmakers. She cited a study she recently completed that showed that medical bills and illness contributed to 62 percent of all personal bankruptcies in 2007.

Single-payer reform would radically simplify the payment system and redirect the vast savings to patient care, she said.

"Private insurance is a defective product," Woolhandler said. "A government-run clone of private insurers cannot fix these flaws. Only single-payer national health insurance can assure all Americans the care they need at a price they can afford."

READ Wolfe’s testimony.

READ Woolhandler’s testimony.