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Medicare On Life Supports

Posted By James F. Davis On June 4, 2010 @ 10:46 am In News | No Comments

Commentary: Along with millions of other Americans, I received a glossy letter from the Secretary of Health and Human Services (HHS), Kathleen Sebelius, titled “Medicare and the New Health-Care Law—What it Means for You.”

She wrote “The Affordable Health Care Act passed by Congress and signed by President Obama this year will provide you and your family greater savings and increased quality health care.”  This claim is made despite the overwhelming evidence that costs have increased dramatically and quality of service has decreased dramatically in every country in the world that has given the government control over their health-care system.

Also we now know that the Congressional Budget Office (CBO) withheld their cost calculations until after the Congress passed the bill. Their latest calculations showed that the new Obama care will cost the taxpayer significantly more than you presently pay as there are virtually no cost controls. The best estimate includes a half trillion in tax increases, a half trillion in Medicare cuts and another $1.3 trillion in costs, more than double of what its proponents said it would cost.

Remember the CBO in 1966 said the total cost of Medicare per year would be about $12 Billion by 1990. It was $107 billion in 1990, almost 900% higher than projected. It was approximately $408 billion in 2009.

Caterpillar Inc. said the bill would increase their costs by $100 million the first year. They and others will have to lay off people because the new Health Care bill will make all businesses in the USA less globally competitive, causing more job losses. Over 2.3 million people have lost their jobs just since Obama started pushing this bill as companies tried to limit their anticipated new costs.

Although a few items in this massive bill are designed to appeal to seniors, for example, more taxpayer subsidies for the Medicare drug benefit, much of the financing in the initial ten years is to be siphoned off from an estimated $575 billion in projected savings to the Medicare program. Unless Medicare savings are realized and plowed right back into the Medicare program (highly unlikely) the program will reduce coverage. Also the law doesn’t provide anything for the already staggering unfunded liability of $38 trillion!

Sebelius goes on to say, “It will assure accountability to the health-care system so that you, your family and your doctor—not insurance companies—have greater control over your care.” We now know that with the freezing of the Medicare Advantage payments in 2011, Congress has set the stage for a progressive reduction in seniors’ access to, and choice of, the popular Medicare Advantage health plans. Enrollment will be cut roughly in half over the next ten years.  Individual control of health care choices obviously will be less for everyone involved as your primary physician will decide whether or not you can see a specialist and which specialists you see.

On top of that there are serious gaps in Medicare’s coverage, including the absence of catastrophic protection.  Roughly nine out of ten seniors on traditional Medicare already need to purchase supplemental insurance, such as Medigap.  Without Medicare Advantage millions more seniors will have to go through the cumbersome process of paying two separate premiums for two health plans. Also high deductible plans are prohibited.

There will be less access to physicians, not more as professed.  Do the math.  With an additional 34 million more people covered and no new doctors, access will be reduced. The American Association of Medical Colleges projects a shortage of 124,000 doctors by 2025. And that doesn’t take into effect the reduced financial incentives for young people to want to become physicians.

I experienced government run health-care firsthand during the five years I lived in Germany.  I ended up delivering our son in a German hospital because they could not find a doctor. My wife once waited eight hours in an emergency room to have a stab wound treated there. Get ready for the same service.

The new law dramatically expands Medicaid, a poorly performing welfare program with low physician reimbursement rates and huge fraud. This will be a further disincentive for people wanting to become doctors, causing an even greater shortage.

Sebelius states, “beginning in 2014, the new law protects Medicare advantage members by taking strong steps to ensure that at least 85% of every dollar these plans receive is spent on health care, rather than administrative costs and insurance company profits.” She doesn’t say how this can be done, given that historically, on average, 35% of all insurance company costs are administrative. About 65% goes to reimbursing physicians, hospitals, etc. Apparently government leaders think she can waive a magic wand and cut administrative costs in half. The real purpose of this 85% rule is to destroy the private insurance industry because it will be virtually impossible to meet these rules.

Several physicians told me they and their patients would be better off if $50 a visit was charged rather than being reimbursed $200 by the government because of all the extra employee costs they have that goes into filing claims for reimbursement, justifying claims, tracking, arguing, fixing errors, etc.

This government propaganda letter also states you will have “Better Access to Care” because “the law increases the number of primary care doctors and nurses and physician assistants”—through massive subsidies (increased taxes) that they hope will entice people to go into the medical field even though they have greatly reduced the financial incentives to attract people to these jobs.

Let’s look at the record. Brian Mulroney was Prime Minister of Canada on the day that Hillary Clinton announced that the Clinton administration was going to try to pass a national health bill, similar to that of Canada. Mulroney flew to the United States on that day to get an operation because he was on a long waiting list in the Canadian national health-care system. Get ready for long waits to see a specialist.

HHS says, “the new law contains important new tools to help crack down on criminals seeking to scam seniors and steal taxpayer dollars.” There has been massive fraud in Medicare and Medicaid government run system during the 40 plus years we have had them because there is no serious financial incentive for government workers to reduce the fraud. There is no profit incentive to keep costs down.  That’s why the more the government has been involved in our medical care, the more the costs have gone up and the more our taxes have gone up.

Among some of the new taxes in this bill is a 40% excise tax on any fringe benefit medical plan valued in excess of $10,220. Most retired government workers plans are taxable.

There is a 3.8% Medicare tax on all investment (retirement) income, a 2% tax (minimum $695) on your income if you refuse to get insurance. Those are just a few.

In conclusion, this bill increases our debt, taxes, welfare, regulations, wasteful government spending and corruption. Unless the medical care bill is repealed, expect lower quality health care, less availability of doctors, much higher costs of taxes and insurance premiums and continued higher unemployment once the health-care system is implemented. If you do not get involved in overturning this legislation, you will reap the consequences.

James F. Davis, president of Accuracy in Academia [1], graciously provided this commentary.


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