Uncommon Sense

April 24, 2020

We Can’t Pay for Medicare for All! But . . .

Filed under: Economics,Politics — Steve Ruis @ 10:26 am
Tags: , ,

Michael Hudson is one of my favorite economists and recently he said this: “Just think of when, in the debates with Bernie Sanders during the spring, Biden and Klobuchar kept saying, ‘What we’re paying for Medicare-for-All will be $1 trillion over 10 years.’ Well, here the Fed can create $1.5 trillion in one week just to buy stocks.

“Why is it okay for the Fed to create $1.5 trillion to buy stocks to prevent rich people from losing on their stocks, when it’s not okay to print only $1 trillion to pay for free Medicare for the entire population? This is crazy!”

So, the very same corporate stooges that proclaim that we cannot possibly afford to pay for Medicare for All are more than willing to have their share prices and corporations supported to the tune of trillions of dollars.

And, of course, the costs of Medicare for All are never, ever placed side by side with the benefits, you know, in a cost-benefit analysis?

The benefits are immense, especially when you consider the savings from not having to buy health insurance. For example, according to Modern Health care, the nation’s seven largest publicly traded health insurers saw revenues of $913 billion in 2019. So, pay a trillion dollars a year for Medicare for All and get 0.913 trillion dollars back. And that is just the top seven companies. I suppose that if all of the rest of the companies were added it, the savings would be greater.

With just that benefit alone we are down to an annual cost for Medicate for All of $87 billion and that could be paid for by cancelling one small weapon system from the Pentagon’s budget.

Ca-ching! Done. Medicare for All is paid for.

Of course the opponents of universal health care in this country don’t want you to see a cost-benefit analysis. I mean, all of those numbers . . . bound to be confusing, so they just want to keep it simple (using a risk-risk analysis).

PS What ever happened to the idea of risk when investing in the stock market? The purchases are not insured, like savings in federally instituted banks. Remember all of the people the Stock Market Crash of 1929 bankrupted? Isn’t the danger of losing one’s money supposed to be a major factor in controlling risky behaviors? If the government is to bail out the poor, poor investors every time they get a financial hangnail, the whole system becomes corrupt, or should I say “has become corrupt.”

February 19, 2020

Costing Out Medicare for All

There is still a great debate going on as to whether we can afford Medicare for All. I prefer, rather, to use the term Universal Healthcare (UH) as I do not want to be restrictive in what we can come up with. Maybe Medicare for All is too expensive but a better plan is actually cheaper, etc.

The first stage of this discussion is the one we need now, which can be couched in the form of a single question: Is there enough information to believe we can afford UH to vote politically to have such a thing?

The answer is a clear yes. Other Western countries have better health outcomes or equal health outcomes than we get here and they pay far less for those outcomes.

Therefore we can afford to do UH and we should vote to do so.

The big question is then “Can we do it well?”

Those who believe in American Exceptionalism (U . . . S . . . A . . . U . . . S . . . A . . . !) must believe that not only can we do it, we can do it better than those other countries, especially the shit hole countries.

But, but “God is in the details!” (Not the Devil, people, get it right!) Yes, that is true, but any details being offered up in the current campaign for president are irrelevant because they are non-binding. We can also count on doctors working to protect their earnings. We can count on Big Pharma working to protect their immense profits. We can count on actual costs going down naturally, if for no other reason than Health Insurance company profits will no longer be extracted as rents from the system (see Addendum below).

The attractive thing about Medicare for All is that it has a proven track record of service, of frugality (3% operational overhead), and acceptability. That is political thinking however.

We could either: put health insurance companies out of business or allow them to offer supplemental insurance coverage (true catastrophic insurance) or we could do what Switzerland does. All of the health insurance in Switzerland is offered by private insurance companies (thousands of them). The government, however, limits how much profit those companies be made and dictates what is covered and what is not (no more insurance company death squads). (That this is acceptable to those companies is the fact that over 4000 of them are doing that business, the profits being like they were 50-60 years ago and steady and safe, just like insurance companies used to operate.) The Swiss government also forms and reforms risk pools to make sure that the risks are shared widely. So, UH can include private insurance companies as Switzerland does or it can basically relegate them to the high risk end of the spectrum or even eliminate them.

For example, I don’t think UH should cover rare medical events, e.g. the birth of conjoined twins. If we go down the road of “Oh, we can’t let anything bad happen,” we will soon be broke. Rare, almost untreatable cancers, well, that is sad but not an obligation of the many to the few. So, I think UH should focus on the common ailments that are treatable and allow the insurance companies to sell expensive policies to those who want protection from rare life threatening diseases and accidents, e.g. ‘Every bone in his body was broken but we were able to put him back together.”

But, that’s a detail, too.

Battling out the details in a political process is a vain effort and will not inform us. All we need to know is that other countries can produce health outcomes equivalent to, or better that, ours for much less than we currently pay. This tells us that UH is something we can do. Then it is a matter of political will, and unfortunately, power politics.

Addendum Check out The American Health Care System Costs Four Times More Than Canada’s Single-Payer System (and the Public Option Won’t Help)

Here’s a taste: “The average American pays a whopping $2,497 per year in administrative costs — which fund insurer overhead and salaries of administrative workers as well as executive pay packages and growing profits — compared to $551 per person per year in Canada, according to a study published in the Annals of Internal Medicine last month. The study estimated that cutting administrative costs to Canadian levels could save more than $600 billion per year.”

“Despite the massive difference in administrative costs, a 2007 study by the Centers for Disease Control and Canada’s health authority found that the overall health of residents in both countries is very similar, though the US actually trails in life expectancy, infant mortality, and fitness.”

August 2, 2017

Medicare for All: Let the Hand Wringing Begin

Filed under: Morality,Politics — Steve Ruis @ 12:34 pm
Tags: , ,

Now that a “Medicare for All (MFA)” movement is gaining steam, it seems a day can’t go by without a great deal of angst being proffered by various and sundry columnists. I think this attitude is professional in nature as a “happy days are here again” attitude doesn’t sell papers, as they say.

There are all kinds of “problems” with MFA that are brought up. How will we pay for it? What happens to the insurance companies? How will businesses now providing health insurance cope with the issues?

I am reminded of a story of a very good friend of mine who remembered setting the dinner table with his young daughter one time and started mumbling to himself “wine, wine, wine,…” as he contemplated what bottle to open and his daughter burst out in tears saying “I can’t help it….” Like that young lady, these columnists can’t help but whine.

Yes, there will be massive institutional problems involved … so what?

Consider: How to pay for it? Currently most Americans receive health insurance as a fringe benefit through their work. Instead of that money going to health insurance companies directly from their employers, those funds will have to be paid to the employees. With those funds, they will be able to pay the taxes necessary to pay for the MFA plan. Those taxes will not be anywhere near as large as the cost of that private plan. For one reason, the Medicare folks have about a 3% overhead and 0% profits while the private insurers overhead and profit taking are closer to 20%. Also, if you haven’t noticed, Medicare doesn’t pay 100% of all medical expenses, it pays about 80% (at least on paper—my co-pays have been almost zero as most practitioners accept my Medicare payment as payment in full).

The rest of the money employees receive in lieu of employer provided health insurance will go to a supplemental policy to add to the basic coverage provided by Medicare. I hope that the government will make an adjustment to our income taxes and not confiscate a substantial portion of the “new income” that the direct payment to employees constitutes and allow us to deduct all taxes and payments for medical treatments, insurances, etc. I also hope that MFA continues to be basic and not get blown up into some “Cadillac version” by pandering politicians. Possibly the system could be run by a nonpartisan commission, much as many public pension system are.

The insurance companies will be very busy providing supplemental policies from minimal to lavish in scope, I am sure. Their profit margins will go up because they will not be spending so very much money researching the best ways to get away with denying honest claims.

So, will there be transition problems if we opt for MFA? Yes, of course. Only an idiot would think otherwise. Are those problems so daunting to have us consider not going down that road? Only an idiot would think that. The founders of this country basically created a representative democracy from scratch. Creating a modern health security system should be a much lesser task and is quite worth doing. Will the rich still have it better than the poor? Are you fucking crazy? Of course they will. They will spend quite a bit of money to guarantee that whatever the best care is, they will get it. (Their Medicare Plus plans will be Medicare Plus Plus (Platinum), I am sure.) The poor will have to settle for pretty damned good care, which is far, far better than they have ever had.

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