DEBUNKING MEDICARE FOR ALL (A REAL POLITICAL “FREE FOR ALL”) Fourth in a series of articles regarding Medicare for All
By: Jerry Rhoads, CPA, LNHA, CEO All-American Care
Americans are you excited about the prospect of getting free health care? Sounds like a great idea for a politically driven plan … so I’m thinking a working title of Debunking the free Medicare For All socialism proposal that converts all Americans to a VA type debacle! You wait in line to get any medical intervention with a bureaucrat deciding your coverage then denying it based on its not medically necessary then it takes five levels of appeal, using a $500 dollar per hour attorney, to get claims paid.
That’s what a Government administered single payer Medicare program currently does to keep costs down and seniors at their mercy. Mr. and Ms. American, that’s what you get by forfeiting your current plan for Medicare/Medicaid for All. Then you qualify for Medicaid once you need nursing home care after spending down your assets to a burial fee of $2000 and labeled indigent … a ward of the State of Illinois that is 18 months behind paying the nursing home for your substandard custodial care until you finally expire. Welcome to socialized medicine VA style.
Democratic Socialists for Medicare for All is a campaign organized and paid for by the Democratic Socialists of America (DSA). DSA is the largest and fastest growing socialist organization in the United States.
They are a member-funded, member-run, and democratically accountable organization that fights for a political agenda that puts working people at the center. They believe that if we are to take on the enormous power of our political elite and their billionaire donors you need an organization that truly represents the needs, aspirations and desires of the working-class majority.
They are organized into over 300 local groups across the country that organize and agitate for social reforms in health insurance, our schools and neighborhoods, at the ballot-box and in our workplaces. And the majority of the most influential Democratic candidates (Sanders, Warren, AOC, Harris and Biden) have bought into this line of thinking to bring the masses to the Government’s freebies trough.
Critics of this impractical approach, also say eliminating private insurance could gut a major sector of the health economy. As of December 2018, private health coverage was directly responsible for almost 540,000 jobs, according to the Bureau of Labor Statistics. Economists note, though, that predicting how many jobs would go away — versus how many could be absorbed by the new system — is difficult, as is projecting any macroeconomic impact.
HOWEVER,CAN YOU IMAGINE ADDING ANOTHER, 540,000 BUREAUCRATS TO THE FEDERAL GOVERNMENTS PAYROLL THAT NOW EXCEEDS $500 BILLION DOLLARS PER YEAR. PLUS, ANOTHER 100,000 STATE EMPLOYEES FOR STATE ADMINISTRATION OF MEDICAID AS THE SAFETY NET. THAT MEANS ADMINISTRATIVE COSTS WILL EXCEED $1 TRILLION DOLLARS PER YEAR JUST TO OVERSEE THIS GIANT ALBATROSS.
On top of the administrative costs there is an expected cost of $14,500 per year medical care costs per covered American and aliens (330 million) for physicians, hospitals, pharmacies, dental, mental, eye care, therapies, durable medical equipment, transportation as promised by the Democratic Socialists. Take out your calculators and you get an annual cost of $4.8 trillion for fee for services, plus the $1 trillion administrative costs equals in round numbers $6 trillion dollars per year, with no mention of preventive services or the declining health of Americans because of obesity, aging and drug use. That’s $60 trillion over the next 10 years.
Would the average person and employers pay more? Of course, That’s not hard to know when you consider the average American is unhealthy. Also, there are 117 million who have at least one chronic disease and 40% of that number have 4 or more. The typical American is also overweight, does not exercise regularly, over eats unhealthy foods and has poor lifestyle habits.
Employers would not pay what they currently do for health insurance, an outlay that’s only getting more expensive. Also, the employees would also likely get more generous health coverage. And lawmakers are pitching various other bills — see Warren’s wealth tax, Sanders’ estate tax or the 70 percent marginal tax on the wealthy touted by Rep. Alexandria Ocasio-Cortez (D-N.Y.) — that backers argue would generate revenue to pay for something like Medicare-for-all. The added taxes of $6 trillion per year would drive each employed American and employers per employee tax up by $10,000 to $15,000 per year. As usual, those younger employed workers would foot most of the bill FOR the older retirees costing 80% of the health care costs with no investment in prevention or health preservation opportunity costs.
Perhaps more significant, at least politically, are the implications for health care stakeholders like hospitals, insurers and drug makers. All stand to lose under single-payer, especially if it’s used to bring down health care costs. They’re already working to make their opposition felt. (That said, opposition from the health industry is not universal.) Why not, currently they’re not held accountable for escalating costs and marginal quality nor are there any requirements to produce an outcome for their income nor prevention as an outcome.
The failure in the current, so called Medical/Medicare Model, is directly attributable to the manner of funding and payment to providers for input not outcome. All providers are accountable for establishing a diagnosis (input) as justification for payment (income) and no proof of output (outcome). Since there is no requirement to justify price by cost, costs escalate and the Americans’ health continues to deteriorate. This, in economic terms is a Monopsony (one buyer market) where the State and Federal government is the payer of last resort which kills the competitive forces of Enterprise and externalize the benefits for the covered lives of beneficiaries.
Americans, attached are my responses to your questions regarding your employer plan and how it would work under Medicare/Medicaid for All … first of all it can never work as a FREE for services program … even now Medicare as we know it is a FEE for services program with cost sharing from each beneficiary in the form of deductibles and coinsurance… even so, the costs will be prohibitive by the realization that health care is already the biggest uncontrollable cost to government … and by 2026 it cannot be funded under its current structure as the baby boomers come on board with their chronic diseases … and the young voters will rebel when the realize they have to foot the bill with exorbitant taxation, hidden deductibles … and by Medicare using the current method of payment of the providers, there will be built in costs since there are no incentives for preventive or health preservation services (real outcomes) in the budgets. That’s where the true savings are, not in more taxes for less care. (The CDC states that 75% of the current costs could be saved with a preventive health care system. Currently, only $2 billion of the budget is spent on preventive research and procedures).
THE UPSIDE
Since the conservatives and moderate Republicans don’t seem to have a rebuttal or a workable plan, the only true solution will be to privatize health care (SHIFT the paradigm from Government funded health care to Self-health Funded Insurance Trusts) as a way for Americans to internalize the cost of being unhealthy, so if they personally can afford their own health care and have the incentive to stay healthy it creates savings on their health care expenditures … they then can hold the providers accountable, since they are paying the bills, for positive outcomes, including preventive services and health preservation services for staying healthy. Over a 45 year span of employment each employee can save up to $3 million dollars, including a return on their savings trust, for use on long term care services or retirement plans. On the other hand, as long as the patient externalizes the impact of cost to the government not on their budget nothing will change.
THE DOWNSIDE
The Medicare for All promise to 44 million existing Medicare insured beneficiaries will be covering an additional 35 million by 2030 (77,000 baby boomers who are signing up at the rate of 7,000 per day after qualifying for Social Security at 10,000 per day) costing another one trillion per year. This under budgeted cost will sink the existing Medicare trust funds by 2040. Then Medicaid is expected to pick up another 60 million as the current Medicare program runs out of money and discontinues coverage in nursing homes. This will cost another $4.3 trillion per year by 2040. Promising Medicare for all will cost $5.3 trillion per year by 2040. This will only cover 135 million Americans after 2040. The other 200 million would cost $7 trillion per year by 2050 or a total of $16 trillion per year for all Americans by 2060.
This makes for a need to have a true Enterprise Model where the providers have to compete to stay in business. All of this is covered in my books, The Boomers Are Coming, Restore Elder Pride, America in the Red Zone, Failing Government Taketh Away and The American Enterprise Party. The other alternative is to bankrupt the Government’s ability to afford what Americans already have or ration huge amounts of current Medicare and Medicaid benefits under the guise that the Swamp is being drained. www.jerryrhoadsauthor.com
