Some say Medicare is immensely popular and has low administrative costs.
Therefore, why not just have Medicare for all?
First, let’s get some facts straight about Medicare.
· It is structured as a Ponzi scheme.
Its unfunded liabilities are an estimated $38 trillion and are unpayable. Promises made to baby boomers, who were forced to pay into the system throughout their working lives, simply cannot be kept. Their money is gone just like that of Bernie Madoff’s investors.
· It is sustained by the general fund and by cost shifting.
Medicare Part B premiums pay only about 25% of the cost. The rest must be made up from the general fund. In addition, Medicare underpays hospitals and physicians, and costs are shifted to private insurers. The hidden tax on private insurers to subsidize Medicare and Medicaid amounts to $89 billion per year, or $1,788 per average family in a preferred provider organization plan, according to a September article in the Wall Street Journal.
· It is unfair to both patients and physicians.
Payments to physicians often are so paltry that patients are having increasing difficulty in finding a physician who can afford to see them. Coverage of prolonged serious illness is poor. Seniors who exceed the allowed number of hospital days are plum out of luck.
Neither is Medicare a model for comprehensive coverage of non-catastrophic costs. Seniors pay 50% of their medical bills out of pocket, and most buy supplemental coverage, according to the Wall Street Journal.
· The system is rife with fraud.
An anti-fraud campaign went into high gear with the passage of the Kassebaum-Kennedy Health Insurance Portability and Accountability Act of 1996.
Hundreds of millions of dollars were made available to prosecutors, along with huge penalties and new tools including a fraud hotline, bounties of up to 30% of amounts collected, and money laundering charges on which the accused could be convicted without being found guilty of any underlying fraud.
Still, despite allocating $1.13 billion for program integrity and enforcement activities in 2008, government-wide improper payments allegedly amounted to $72 billion that year, according to a July article in the New England Journal of Medicine.
And while a physician could be ruined or even imprisoned over alleged coding errors that amount to a few dollars, the threshold for investigating a Medicare carrier is $200 million, according to Journal of the American Physicians and Surgeons.
· Government care costs much more than private care.
The passage of Medicare led to an immediate, enormous jump in spending. Between the introduction of Medicare in 1965 and 1970, real hospital expenditures jumped 23%, according to the Library of Economics and Liberty.
Since 1970, Medicare’s per-patient costs have risen 35% more, and Medicaid 34% more, than all other medical care costs in America.
This analysis greatly underestimates the cost of government care by counting all Medicare prescription drug purchases as part of private care. It does not account for billions of dollars in cost shifting from Medicaid to State Children’s Health Insurance Program or care purchased privately by Medicare and Medicaid patients, according to the New York Post.
· Medicare taxes impose uncounted costs.
Among the hidden costs of government programs is the deadweight cost of taxation. The taxes that finance the Medicare program impose costs on society in the range of 30% of total Medicare spending, according to the Cato Institute, a libertarian think tank in Washington, D.C.
The healthcare bill recently passed by the House of Representatives wants to pay for its more than $1 trillion in costs by taking money out of Medicare and taxing the wealthy.
President Obama has said the amount he wants to cut from Medicare is $500 billion in 10 years.
But how do you take money from a program that already is broke?
There are currently 44 million Medicare recipients. Do the math and $500 billion amounts to slashing roughly $11,400 from each Medicare patient.
This tidy sum is equal to the cost of caring for one senior for one year. What year of your life would you like that to be?
Glueck is a Newport Beach medical doctor by training who writes on legal issues in medicine.
