The Real Protectionism: Favoring Private Insurers at the Cost of Children's Lives

According to this article in the New York Times, Republicans have decided to oppose America's most popular health insurance program - by stealth. Not brave enough to oppose SCHIP in Congress, the Bush administration is bringing in rules that would prevent states from expanding the program to cover more impoverished children.

And they're keeping it nice and quiet. This policy was announced, not in a press conference or news release, but in a letter sent to state health officials from bureaucratic non-entity Dennis G. Smith, the director of the federal Center for Medicaid and State Operations. On a Friday. At 7pm. In the middle of the August holiday period. States received no advance warning and were not consulted on the change in policy.

The letter says that states must demonstrate that they've enrolled 95% of eligible children below 200% of the Federal Poverty Level before they can extend the program - something that no state has ever achieved, and that the President's insufficient budget proposal effectively prevents. The letter goes on to say that:

• states must prove that individuals have been uninsured for a minimum one-year period before they qualify for the program
• states should charge co-payments or premiums that approximate the cost of private coverage
• states must prove that the number of privately insured children in the target group has not decreased by more than 2% over the previous 5 years

The letter concludes with a threat - states that have already been granted federal approval to expand SCHIP to children above 250% of the FPL must amend their state plans to reflect the new rules within a year or face 'corrective action'.

The collective effect of this is a directive which protects the existing corrupt practices of the private health care industry against an affordable, comprehensive health plan that is the only option for many of the working poor. SCHIP has reduced the number of uninsured children in America by one third since 1997. In the same period, private health insurers have increased profits and premiums while the numbers of uninsured and underinsured citizens have increased.

The Bush Administration says its new policy is aimed at preventing the expansion of SCHIP, but its combination of underfunding and impossible-to-meet rules undercuts the entire program. Fortunately, it looks like states are gearing up to fight back. What is certain is that the fight will be tough.

SCHIP is the most visible (and immediately tragic) component of the Bush administration's war on state health initiatives, but there are others. Trade policy- always an area given to undermining programs that help ordinary people- mirrors the Administration's approach to SCHIP. A new report by the Americans for Democratic Action Education Fund, Trading Lives, finds that global trade rules currently being negotiated threaten states' ability to pursue innovative health care reforms. Private insurers that dislike aspects of public programs may try to characterize them as 'disguised barriers to trade' and seek to insert limiting provisions in US trade agreements - again, a method that relies on a lack of Congressional scrutiny and democratic process.

This is the Bush Administration's true face. They say they want free trade, but what they really want is trade that benefits their friends. They say they want to expand access to health care but what they really want is to expand their funders' profits. Congress must deny them on all counts, and put the interests of the American people first.

Trade Rules Put Affordable Medicine At Risk

A lot of people learn the hard way: it pays to read the fine print. Any complex agreement has pages of it, and there are always things hidden in there that you wouldn't sign up to if they were obvious.

The United States is currently finalizing a host of trade agreements with a lot of fine print, and if Americans knew what our government was signing on their behalf they might not like it. Those agreements risk making our health care more expensive, less available, and less responsive to the needs of ordinary people.

International trade agreements are like contracts that countries sign, promising to change their behavior. And like any contract, they are enforceable- in this case, by the World Trade Organization's dispute resolution panels. If a country signs a contract that is bad for its citizens, its position in front of those judging it is no different from somebody who bought a rip-off car with a high payment: sorry, sucker.

But do Americans know what kinds of contracts George Bush's trade bureaucrats are negotiating on our behalf? Do you know what is in our trade deals with Colombia or Peru? Probably not. Trade policymaking is an undemocratic world of lobbyists, lawyers and bureaucrats whose orders are to do what the lobbyists suggest. This is a perfect environment for the special interests who benefit from the current health care system and would see their profits cut if all Americans were to have the health care they need. And they are working out how to bend trade policy to their goal of keeping the health care system profitable for them.

Take, for example, medicine and the right of American states to negotiate affordable drug prices for their citizens. This has become an issue in a number of states that are struggling to deal with ever increasing health care costs. America's drugs are the most expensive in the developed world, and it is possible for states and individual Americans to benefit by forcing drug companies with equivalent products to compete, bringing down prices to an affordable level. The drugs are the same, safety is not compromised, and Americans get the drugs that they need.

Big pharmaceutical companies' profits come from their ability to restrict supply and sell at high prices. And they defend their right to high prices with all the political weapons they can muster. If you run one of the world's most profitable companies, you can afford to fight policies that reduce those profits.

So when American states began to take action to reduce drug prices and give senior citizens a better deal, the pharmaceutical companies fought back. Their lobby group PhRMA filed suits in three states, claiming that the states' programs were illegal. They lost. Game over, right? The elected government of those states decided on a program and the courts decided the program was legal.

No. The pharmaceutical companies struck back through trade law. At the time the United States was negotiating a free trade agreement with Australia. PhRMA and the drug companies got provisions written into the US-Australia free trade agreement that undermine states' ability to negotiate cheaper drugs.

This works for drug companies. They can work in the shadows, quietly inserting provisions into these complex, technical, and frankly, boring agreements.

It also works for service providers, insurance companies and everybody else who benefits from the health care system. A new report by the Americans for Democratic Action Education Fund, Trading Lives, shows how importation of medicines, state health reforms and many presidential candidates' plans might violate provisions that are being inserted into global trade agreements such as the General Agreement on Trade in Services (GATS).

In other words, the United States is already signing agreements that will make it harder to buy affordable medicine. It will soon be signing vague statements that will make it harder to make sure every American can get health care.

The Bush administration doesn't seem to mind, strangely enough. Pharmaceutical companies, insurance companies, and some private health care companies think this sounds all right. Should ordinary Americans mind? Well, ask yourself. Would you like to make sure that American health care becomes more driven by greed, harder to get, and more expensive for ordinary people? If so, you'll like the trade policy agenda in health.