Few are satisfied with America’s medical insurance system, but many resist abrupt change. Conservatives want smaller government and more individual responsibility. Liberals fear abandonment of the poor and elderly. Everyone dreads premium increases.
Yet there is a path that’s both liberal and conservative, which relies on a genuinely free market to achieve low-cost, high-quality health care for all. This process revives the American tradition of mutual aid co-operatives and fraternal benefit societies. One hundred years ago most health insurance was provided through these organizations. Their members built hospitals, orphanages, old folks’ home, paid sickness and death benefits. For pennies per week they delivered health care that was affordable, democratic and humane.
Today, a national network of such local and regional co-ops could operate as mutual medical savings accounts, from which national coverage can evolve. Welcoming small mutuals into the market would also enable Medicaid to expand with less per capita cost. These will make medical care more reliably affordable, democratic, and humane.
Twenty years ago I established such a medical plan. The Ithaca Health Alliance launched with three members. Eventually 2,000 members paid $100/YEAR expecting that we would increasingly pay for one anothers’ emergency and chronic care. Within a few years we were covering our members for 12 categories of emergency need, to ever-expanding maximum amounts, without a deductible, for the same $100/YEAR. Our system was so clear and simple that, with one employee, we paid claims overnight. Then we built a free clinic, providing standard and holistic care for the entire community.
Our medical plan was endorsed by the local Chamber of Commerce, the county legislature, by its health department and hospital, by our mayor, our Democratic assemblywoman and the Republican chair of the NYS Insurance Committee. We were approved by the NYS Insurance Department. And applauded by our members, who otherwise had no insurance or paid a high deductible.
Now, twenty years later and far larger, Ithaca’s Health Alliance should be a shining light within the national debate. But by 2011 the IRS demanded we drop our members and become a charity. Without that interference, the Alliance could currently be covering much more preventive, diagnostic, emergency and chronic care for $100/YEAR. Unfortunately, most state insurance departments currently prohibit community medical co-ops. They require all new medical insurers to front millions of dollars, then to cover extensive mandates from day one. This high bar requires major investors and a large staff, which requires high monthly premiums. States thereby preserve virtual monopolies on health insurance, as insurers merge.
The community medical co-op movement embraces state regulation that ensures our strong standards of integrity and efficiency. We’ve drafted a Community Medical Cost Containment law which specifies, among other things, a maximum wage for management —to retain greatest revenue for member benefit. It also requires web-based lists of each payment made or declined; public board meetings and open voting; equal membership fees regardless of race, gender, age or medical condition.
As these grassroots co-ops prove their reliability, local and state government might offer partial matches of membership fees. Ultimately the federal government might also contribute. But advocates of “Medicare for All” should be wary of complete dependence on government, which both gives and takes away. For example, Obamacare promised millions of dollars to start several large full-service co-ops, then pulled those funds. Eternal vigilance, and local control, are the price of liberty and health.
As local co-ops multiply, insurance brokers would have something to offer 30 million uninsured Americans and millions more underinsured. Doctors would have time to provide deep insight as well as pills. Holistic healers could prescribe warm hands as well as cold machines. Taxpayers and hospitals would pay less for indigent care. As Rob MacKenzie, former president of the Cayuga Medical Center said, “Medical centers nationwide must write off more bad debt as more Americans become uninsured. The Alliance’s free clinic reduces dependence on our emergency room for non-emergencies. Their other programs likewise contribute to community well-being.”
Most importantly, when billions of dollars move from insurance payments into the productive economy, millions of new jobs will be created rebuilding America’s infrastructure. Insurance executives could be employed managing healthy cities. Corporate investors could discover new wealth by fixing America.
The middle class, liberated from medical costs, could build additional member-owned safety nets for food, housing, and finance. We might become what may be called the Mutual Class, getting ahead by getting together.
Glover is founder of a dozen community organizations including the League of Uninsured Voters (LUV), author of “Health Democracy” and other books, and a former professor of urban studies. http://paulglover.org
