Dan’s Blog

The Farce of Medicare For All

Dan Calandro - Tuesday, March 19, 2019

It’s a shame that the word stupid is no longer acceptable in America today. The unfortunate results, of course, are more stupidity and stupidity on a much grander scale. MEDICARE FOR ALL is a prime example. The GREEN NEW DEAL is another. The economics for both is so absurd they are impossible to initiate let alone sustain, and their ideological support is as fraudulent as it is corrupt. Ditto for their advocates, who are not the socialists they advertise to be. To prove this, let facts and honest assumptions be submitted to a candid audience…

According to industry data collector Medical Group Management, 84% of all Medicare payments made to healthcare providers fail to generate a profit for the facility – and 67% (or two-thirds) of all disbursements are below the providers’ actual cost for the services. In fact, it is estimated that Medicare payments average just 20 to 30 cents on the service dollar.—In other words, Medicare providers average just 25¢ for a healthcare service that retails for $1.

The most basic reason MEDICARE FOR ALL is doomed to failure is because it eliminates the single thing that allows Medicare to exist in the first place – the free-market.

Many Americans don’t appreciate that the current Medicare program is already a socialist system, because within it is a wealth redistribution scheme that favors certain people (Medicare recipients receiving retail-priced services at far less than market rates) over others (individuals paying more than market rates for their services to accommodate the shortfall in Medicare funding.) A lurch to the Left from here, i.e. MEDICARE FOR ALL, is to transform healthcare from its socialist form into a communist one – because it represents a complete and utter takeover of the healthcare industry by central government. It is the epitome of communist statism.

Americans should know better than anyone that nothing is as effective or efficient at satisfying consumer demand than the capitalist free-market system. Free-markets are driven by profit and return on investment (ROI), which is the overriding incentive for investors to place capital at risk to deliver quality, value, and adequate supply to markets. Care is better and more abundant when there is profit in it. Without profit potential quality is scarce and supply is limited. Only a communist would disagree.

Governments are cesspools of waste, fraud, and abuse because they are driven by politics and not profits. ROI means nothing to them because the word profit is nowhere in their vernacular. Governments spend money (as opposed to capitalists who invest it) and therefore have no profit incentive, and thus no reason to produce an abundance of great quality care. Efficiency, profit margins, and short lead-times don’t matter to them. The only thing that matters to governments is that all people receive the same level of mediocrity.

And that is why statism, which many now call socialism but is better described as communism, has always failed in the annals of history – because without the incentive of profit both quality and quantity (supply) shrink drastically. Investments in research and development for new cures and treatments are the first to go under bureaucratic spending constraints. Wait times increase in short order. And then care is rationed. MEDICARE FOR ALL is the best way to import Cuban healthcare into America.

The shift to communist takes time, in a move Marx described as a slow and methodical transition from the private ownership of industry (capitalism) to a shared arrangement between enterprise and government (socialism) before the State could finally take full control over industry and the entire means of production (communism). The conversion could take several generations to take root, as free people don’t give up their rights easily or quickly. Citizens had to be lured in…

LBJ started Medicare in 1966 and tied it directly to FDR’s Social Security Act. It began by covering only a small section of the populace: retired wage earners drawing Social Security – at the time 19 million people, or 10% of the population.

Today the program covers a wider demographic of people (not just Social Security recipients), more treatments, and serves a greater portion of the population – 58 million people, or 18% of the population.

MEDICARE FOR ALL – a huge part of the Democrats’ 2020 campaign platform – intends to add 267 million more people to the government roll.

Let’s examine just how asinine and corrupt the MEDICARE FOR ALL concept truly is. Asinine because it can’t work, and corrupt because those pitching it know it.

According to the Office of Budget and Management the U.S. central government disburses $1.1 trillion per year for Medicare and related healthcare programs. But we already know that is a deeply discounted value (20-30 cents on the dollar). In order for a self-righteous government to pay their “fair share” and entirely fund their expense obligations Medicare should actually be disbursing $5 to $6 trillion per year at the present time – this in order to maintain the same level of industry investment in quality and supply – otherwise both will suffer dramatically. That’s six trillion with a “T” dollars.

Right now the central government spends $3 trillion per year on all other non-healthcare programs, including defense. That amount, added to the true economic value of Medicare today, adjusts today’s government budget to $9 trillion per year – more than double where it stands today – and produces a massive $6 trillion annual budget deficit.—And that’s just for Medicare as it is today, covering just 58 million people.

MEDICARE FOR ALL would include covering the other 267 million people contained within America’s borders. The cost of covering 4½ times the amount of people, who in theory are younger and healthier, is at least equal to the cost of today’s Medicare due to the sheer size of the population. Add those costs to an already impossible to finance $6 trillion budget deficit and what you have is a government program impossible to fund and sustain.

And so Democrats have already begun calling for higher taxes. Alexandria Ocasio-Cortex – the Boston University economics graduate (which tells you something scary about modern American education and the worth of a $250,000 degree) – thinks a 70% income tax rate is enough to cover all government spending programs including her GREEN NEW DEAL. Bernie thinks a number closer to 90% would be enough to cover the nut. Me?  I don’t see a chance in hell that either rate could even come close.

Look at it this way…

The Trump tax cuts lowered the highest federal income tax rate to 37% from 39.6% . On top of that the “rich” also pay 2.4% Medicare tax on all of their wages. To make the math easy let’s round the sum of those two taxes to 40% for individuals. Trump also lowered corporate income tax rates to 21% from 35%. Under that scheme the central government received $3 trillion in tax revenue last year – not nearly enough to pay for Medicare today let alone MEDICARE FOR ALL.

So to cover the shortfall let’s say that central government doubled tax rates to 80% for individuals and 42% for corporations. Doing so would theoretically double tax revenue to $6 trillion – which still wouldn’t be enough to cover the retail cost of Medicare today. At twice the tax rate a $3 trillion annual deficit would still exist, each and every year.

So let’s say that government finds a way to actually triple tax rates to an impossible 120% of individuals’ earnings and 63% for businesses. Such a condition would in theory produce three times the tax revenue, or $9 trillion – and low and behold the federal government has finally balanced the budget – but that’s with Medicare as it stands today! MEDICARE FOR ALL places an additional 267 million Americans onto the Medicare rolls (not to mention all the asylum seekers flooding in from across the southern border looking for a free piece of the American pie), which represents an economic value worth at least another $6 trillion in funding per fiscal year. Where will that money come from?

“The problem with socialism is that sooner or later you run out of other people’s money.” – Margaret Thatcher

Certainly Bernie, AOC, and all other Democrats running for president understand this basic math and the obvious lessons in history and Venezuela.

Another thing many Americans don’t appreciate about socialism is that it is for the people, not the socialists. Socialists make laws that ordinary people must live by (Obamacare and Medicare) or be mandated to participate (i.e. Social Security) but they (Congress) are exempt from them all. Pedestrian social welfare programs are for ordinary people. Ruling class elites, the socialists, get something much better.

For example, I have been waiting six weeks to receive a cancer related treatment. Does anyone think former Senator John McCain, who voted against repealing Obamacare, ever waited more than a day for a cancer related service?

Of course not. The socialist gets the best of everything and ordinary working class folk get what they get – stiff premiums, huge deductibles and co-pays, smaller networks, and six week lead times. Again, socialism is for us, not them. Socialists live a very different, privileged life.

The greatest threat to modern day Americanism is that no one effectively communicates how the free-market works or how to make it work better in the healthcare industry. That conversation should begin with defining the appropriate role of government in healthcare. And to me that it is as obvious as it is logical.

1)    Until central government can adequately fund Medicare as it stands today they have no right trying to expand it.

2)    Ditto for the VA. Until government proves that they can clean up that mess and produce something affordable that every soldier wants, they have no standing to take on larger role in the Healthcare Market.

But we also know that Obamacare is a disaster and the condition prior to it was entirely unacceptable. The sad part of this whole story is that free-market proponents must rely on an inept Republican Party to beat back the communist movement. After failing to repeal and replace Obama’s treacherous healthcare law they have dropped the effort altogether, and once again are on their heels fighting against MEDICARE FOR ALL without a viable alternative. What an embarrassment.

The idea of MEDICARE FOR ALL is grand utopianism. It must be exposed as the pipedream it is (see above illustration) and then defeated with a legitimate free-market solution that will work, and that people can easily understand.

They need slogans and short one-liners that supporters can rally behind. The first item on the counter-agenda should be to gradually increase the amount Medicare payments contribute to their actual costs. In other words, Government should start paying their fair share.

Who can’t appreciate that?

Such a move would dramatically lower insurance premiums and retail costs for all other non-Medicare patients. Easing that burden would act like a tax cut and help boost other segments of the economy and tax revenues. But the effort can’t end there.

Pricing throughout the industry is in complete disarray. For instance, it is not uncommon for the same service, to the same person, performed by the same provider, to have many different prices. Put another way, today there is a different price for John Doe the individual, John Doe the union member, John Doe with insurance, John Doe without insurance, John Doe the government worker, John Doe the politician, Rich John Doe, Poor John Doe, etc. etc. For every John Doe there should be only one price for the same service by the same provider.

Fixing the pricing dilemma would go a long way to lowering healthcare costs for all – a key objective left unfulfilled by Obamacare – and another great rallying cry. Twelve more such policies are listed in my 2014 blog, Gruber Acknowledges Supreme Letdown, which are geared to expanding healthcare coverage, maintaining quality and lowering costs to consumers.

America needs to check a bearing.

“Those that fail to learn from history are doomed to repeat it.” – Winston Churchill

It is important to remember that Bill Clinton was the first to try nationalizing healthcare with his Universal Healthcare Plan in the 1990’s (some called it HillaryCare back then.) Obama got something done 14 years later with the Affordable Care Act (a.k.a. Obamacare). That was just another step forward in a Marxist movement now concealed under the label MEDICARE FOR ALL.

Self proclaimed Democrat “socialist” Alexandria Ocasio-Cortez (AOC) submitted another communist initiative to the U.S. House of Representatives earlier this year. The objective of her GREEN NEW DEAL is clear: to do away with fossil fuels in ten years and replace it with a “renewable” source of energy that U.S. federal government will own and control. It represents a takeover of the entire energy industry by central government.

AOC, defined by the policies she advocates, is a communist. Labeling her a socialist is fraudulent.

The GREEN NEW DEAL calls for every single building in America to be retrofitted to carbon neutral. Think of the amount of people it would take to achieve that feat in such a short amount of time (10 years.) Add to it the government personnel required to monitor, supervise, and inspect the massive project. Then think about how much it would all cost. Add that number to the $6 trillion deficit already incurred by MEDICARE FOR ALL after a 120% income tax rate has already been levied.

Pie in the sky policies like the GREEN NEW DEAL and MEDICARE FOR ALL sound too good to be true because they are. They have no possibility of achieving their stated objectives because government will run out of money long before. But then again those programs aren’t about achieving their stated objectives. They’re about the government taking full control over the entire U.S. economy. MEDICARE FOR ALL and the GREEN NEW DEAL are simply a means to that end.

The communist movement must defeated here and now starting with a repeal of Obamacare – because without it MEDICARE FOR ALL has no standing. If not a raw deal regarding energy is soon to follow.

The death of Liberty is not far behind.

Help spread the word. It’s our only chance.

Stay tuned…

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