Surveys tell us that many Americans are upset with the cost of healthcare. Democrats in particular are using this dissatisfaction in their campaigns to convince people to vote Democratic. They’re also complaining about “affordability” and blaming the problem on the Trump administration. There’s a common theme in both of these issues.

You wouldn’t call an arsonist to put out a fire – but both of the above problems were created by the arsonists – the Democratic Party! Inflation got out of control during the Biden administration and the cost of healthcare is directly related to the passage of ObamaCare during the Obama administration. While Republicans have failed to correct these problems to the satisfaction of the American people, they can’t expect Democrats to have the solutions when they caused the problems in the first place!

Further evidence that Democrats can’t solve these problems is a recent bill introduced in the Congress by Rep. Lloyd Doggett (D- Texas) and co-sponsored by more than 40 House Democrats that would sharply reduce government payments to Medicare Advantage plans. Medicare Advantage plans are privately managed policies for Medicare enrollees. They are extremely popular since they provide greater benefits at lower costs than traditional Medicare.

But Mr. Doggett introduced the bill because he said it would “level the playing field” between traditional Medicare and Medicare Advantage plans. In other words, they want to make these plans less attractive and more costly! Why would they want to do something that would make healthcare more expensive?

John C. Goodman, writing for The Wall Street Journal, gives us the explanation.

“It is no secret that many congressional Democrats dislike private health insurance even though private insurers were heavily involved in designing ObamaCare. Politicians on the left often speak about the desirability of a “public option.” But Medicare has already had a competing public option for more than two decades. It’s called traditional Medicare, and it has been losing the competition. More than half of all Medicare enrollees are in private plans. For all its faults, Medicare Advantage is arguably the best healthcare program we have. It’s much better than the ObamaCare exchange plans and most employer plans. Mr. Doggett is attacking this overall well-functioning program while ignoring our nation’s worst program: Medicaid.

Goodman goes on to explain that one of the great ironies in U.S. healthcare is that the private insurance industry is largely responsible for administering both the best and worst health insurance programs we have. What Mr. Doggett calls the “giant private insurance companies that profiteer off Medicare” are mostly the same companies that are administering Medicaid.

If private companies run both programs, why is one so much better? Goodman says the answer lies in how the program is structured. Medicare Advantage gets four things right:

First, it is the only program in our entire healthcare system in which a doctor who discovers a patient’s previously unknown health problem can send that information to the insurer (in this case Medicare). This results in a higher premium payment for the health plan to cover the higher expected cost of care.

Second, because of a sophisticated risk-adjustment program, Medicare Advantage plans are the only plans in our healthcare system that actually want sick people as enrollees. No employer, commercial insurer or ObamaCare marketplace plan wants a sick enrollee.

Mr. Doggett insists that Medicare Advantage plans seek to enroll only the healthy, but the reverse is true. Significantly more low-income beneficiaries were enrolled in Medicare Advantage plans (68% vs. 32%) in 2023. In 2021, such plans were also the preferred choice of black (59%) and Hispanic (67%) enrollees relative to whites (43%). These minorities are known to have above-average medical needs.

Third, Medicare Advantage is the only program in our healthcare system in which health plans can specialize in the treatment of specific conditions such as diabetes, congestive heart failure or HIV. This allows them to create focused factories that are increasingly skilled at providing care. By contrast, in the ObamaCare marketplace, health plans are forced to be all things to all people.

Finally, Medicare Advantage plans make money by keeping people healthy. Long before the price of insulin became a political issue, some plans were discounting the out-of-pocket cost to diabetics. While the political focus today is on $35 insulin, some Medicare Advantage plans make insulin available free in special-needs plans for diabetics. Keeping diabetics out of emergency rooms is cost-effective medicine.

Yet, Democrats want to destroy this popular, cost-effective, healthcare program by making it more like traditional, more-costly and less popular traditional Medicare. Remember, these are the same people who sold us on the concept of ObamaCare with the promise it would lower healthcare costs for every family and guarantee “if you like your doctor, you can keep your doctor” in the immortal words of President Obama.

You can’t expect the same people who created the problem to fix it. There’s an old saying that applies here: “Fool me once, shame on you, fool me twice, shame on me.”

 

(Author’s Note: Recently candidates for Congress nominated by the Democratic Socialists of America (DSA) have won primary victories in the Democratic party. These candidates support Medicare for All, the radical change in our healthcare system first advocated by socialist Vermont Senator Bernie Sanders. Medicare for All is a euphemism for socialized medicine, much like socialism is a euphemism for communism. Today I am re-publishing articles I wrote in the past explaining Medicare for All so that everyone can understand the evils of this proposal.)

8/4/20

Most seniors like their Medicare. While it is far from free, it does cost less than private health insurance because it is federally subsidized. Since nearly every doctor accepts Medicare, there is rarely any difficulty finding access to healthcare.

Therefore, when people hear progressives like Vermont Senator Bernie Sanders speak about his socialized medicine program called Medicare for All, they believe he simply wants to extend the same healthcare benefits to all Americans. Nothing could be further from the truth.

Recently, I had lunch with an old friend and attorney and we discussed this very issue. His comments about Medicare for All revealed many misconceptions about what that would mean to our healthcare. It occurred to me that if this educated man could be misinformed, many others would be, too. To address this misinformation, I have listed some of his questions and their answers:

If Medicare is good for seniors, won’t Medicare for All be good for everyone?

Although Medicare is mostly funded by taxpayers, it is not strictly a government system. It was formed originally by providing a standard benefit package offered by Blue Cross in 1965. It has always been privately administered, mostly by Blue Cross, that continues to provide private insurance to non-seniors. In recent years, one third of all seniors are enrolled in plans offered by private insurers such as Cigna, Humana, and United Healthcare under a cooperative program called Medicare Advantage. The success of the Medicare Advantage program is mostly due to the competition between these private insurers which lowers costs and improves the quality and range of services provided.

Medicare for All calls for the elimination of all private health insurance. There will be no competition and all healthcare decisions will be made by the government. The lack of competition will lead to lower quality, fewer services, and higher costs. With no competition, providers will be stuck with fixed rates and no means to appeal. As a result, providers will lose incentives to provide more than the minimum care needed. This trend is already prevalent in socialized medicine systems operating today in Canada and Great Britain.

We have the best quality healthcare in the world, though not the cheapest. Won’t we continue to have the best healthcare even with Medicare for All?

My friend and I agree that America leads the world in providing the best possible healthcare. He believes this will continue despite a change to socialized medicine. This is not the pattern we see when studying socialized medicine systems in other countries. Healthcare outcomes are dramatically worse in countries where the government controls all healthcare. We may have the best trained doctors in the world, but those doctors’ hands will be tied by government officials who will determine who gets care and what care they get. This is most dramatically seen in cancer screening and treatment.

Socialized medicine systems such as the United Kingdom and Canada don’t allow for expensive drugs and therefore these countries do not enjoy our cancer survival rates. The U.K.’s National Institute for Health and Care Excellence (a misnomer at best) has rejected immunotherapies because they are too expensive. Better healthcare comes at a price that socialized systems are not willing to pay.

As a result, these systems have lower cancer survival rates. The age-adjusted mortality rate is about 20% higher in the U.K. and 10% higher in Canada and France than in the U.S. Survival rates for hard -to-treat cancers are also higher in the U.S. than in most countries with nationalized health systems.

The British medical journal Lancet  published last year that an individual diagnosed with pancreatic cancer between 2010 and 2014 had nearly twice the likelihood of surviving five years in the U.S. than in the U.K.

Here are some five-year survival comparisons:

• Brain Cancer
  • S. – 36.5%
  • France – 27.2%
  • K. – 26.3%
• Stomach Cancer
  • S. – 33.1%
  • France – 26.7%
  • K. – 20.7%

 

The availability of expensive drug treatments is only one reason for better survival rates in the U.S. Another reason is better methods of detecting cancer at earlier stages. MRI scanners are more widespread and available for earlier diagnosis. Other diagnostic advances include Google’s artificial intelligence (AI) that can now detect breast and lung cancers with better accuracy – meaning fewer false positives and negatives – than radiologists. AI systems are also enabling researchers to identify more genetic links and to personalize treatments.

With Medicare for All, all physicians will work for the government. Since we’ll have the same great doctors, won’t we still receive the same great healthcare?

Medicare for All will mean the government sets all prices for doctor services and approves or disapproves of all treatment. All doctors will have to accept the fee schedules set by the government or cease to practice medicine. Many older, experienced physicians will see this as an incentive to retire, or at least leave the clinical practice of medicine. This will strip many talented physicians from the work force.

They will be replaced by younger physicians without the experience or work ethic of some of our best physicians. These new physicians will be willing to accept the lower fees mandated by the government, but they will demand reduced hours and will produce less service. Combining these changes, the net result will be severe exacerbation of our physician shortage, which is already alarming.

The real problem is the government will have to approve all treatment. It doesn’t matter how good your doctor is, he or she will be limited by government approval. Combining this feature of socialized medicine with an increasing doctor shortage leads to a common situation experienced in all socialized medicine systems.

All socialized medicine systems suffer from common ailments:

• Delays in treatment – longer waiting times to see a physician
• Rationing of healthcare – delays or denial of specialized care
• Poorer healthcare outcomes – lower survival and life expectancy rates

 

Joe Biden tries to distance himself from Medicare for All by saying he just wants to “improve ObamaCare.” However, his platform calls for a “public option” to be added to ObamaCare, which simply means a slower timetable until socialized medicine is a reality. The end result is the same – total government control of healthcare. Don’t be fooled. Medicare for All will mean the elimination of all private health insurance – which means Medicare for None.

(Note: For more on Medicare for All, use the Search feature on my blog to see earlier posts on this same subject.)

 

(Author’s Note: Recently candidates for Congress nominated by the Democratic Socialists of America (DSA) have won primary victories in the Democratic party. These candidates support Medicare for All, the radical change in our healthcare system first advocated by socialist Vermont Senator Bernie Sanders. Medicare for All is a euphemism for socialized medicine, much like socialism is a euphemism for communism. Today I am re-publishing articles I wrote in the past explaining Medicare for All so that everyone can understand the evils of this proposal.)

9/10/18

Today we continue an explanation of the proposed legislation of socialist Senator Bernie Sanders entitled Medicare For All. Healthcare economist John C. Goodman gives us ten fundamentals you need to understand about Medicare and what it means if it were the only healthcare system available to everyone, as Senator Sanders promotes. Last post we looked at the first seven and today we pick up again with number eight.

8. The real cost of Medicare includes hidden costs imposed on doctors and taxpayers.

In number seven, we learned that Medicare For All would be costly. Charles Blahous of the Mercatus Center has estimated the cost at $32.6 Trillion over the first ten years – and probably more thereafter. Blahous also estimates that the administrative cost of private insurance is 13%, more than twice the 6% it costs to administer Medicare.

Single-payer advocates often use this administrative cost comparison to argue that universal Medicare would reduce healthcare costs. But this estimate ignores the hidden costs Medicare shifts to the providers of care, doctors and hospitals, including the enormous amount of paperwork required in order to get paid.

The Obama administration forced doctors and hospitals to implement electronic medical record system – a costly change that appears to have failed to deliver promised increases in quality or reduction in costs or medical errors. In fact, it has made it easier for doctors to “up code” and bill the government for more money. Also to be considered are the costs of collecting more taxes to fund Medicare. Some estimates put these costs as high as 25 cents on every dollar.

A Milliman  & Robertson study estimates that when all these costs are included, Medicare and Medicaid spend two-thirds more on administration than private insurance spends. Using the most conservative estimate of the social cost of collecting taxes, economist Benjamin Zycher calculates that the excess burden of a universal Medicare program would be twice as high as the administrative costs of universal private coverage.

9. Not a single problem in ObamaCare would go away under Medicare For All.

All of the difficult questions posed by ObamaCare would remain. Who would pay what? Would the premiums be actuarially fair? Would there be subsidies? Would the premiums vary by age? By health status? By income level? By health living choices?

How would employers be affected? Economists tell us that employee benefits are substitutes for wages and are therefore “paid for” by the employees. Under Medicare For All, would employers get off scot free?

Would there be an exchange? There is one now for Medicare – that’s how people enroll in Medicare Advantage plans. Like the ObamaCare exchanges, the Medicare Advantage exchange has subsidies for private insurance, mandated benefits, annual open enrollment and no discrimination based on health status.

The ObamaCare exchanges, by contrast, have been a disaster. Premiums and deductibles are skyrocketing, there are higher charges for chronic patients who need specialty drugs, and plans exclude more and more of the best doctors and hospitals. Expect more of the same with Medicare For All.

10. Medicare is already on a path to healthcare rationing.

Medicare is already in trouble. It is already on an unsustainable path with future promises made that far exceed expected revenues. When the Affordable Care Act (ObamaCare) was passed in 2010, the Medicare Trustees estimated the unfunded liability at $89 Trillion! Yet at the next trustees’ report that figure had dropped to $37 Trillion. How could that happen?

Passage of the ACA theoretically put the government’s healthcare spending on a budget. Goodman says that for the past 40 years, per capita healthcare spending has been growing at twice the rate of growth of real per capita income. At that rate it won’t take long to run out of money.

The Obama administration tried to “solve” this problem by creating an enforcement mechanism to control spending It was called the Independent Payment Advisory Board (IPAB). It was to be tasked with reducing fees for doctors and hospitals to cap spending. This unelected and unaccountable board would be able to restrict what treatments your doctor could provide with the stroke of a pen! Fortunately, IPAB was abolished this year in a bipartisan budget deal.

Goodman says expect Medicare fees to providers to continue to fall behind private sector fees in the future. This means one of two things must happen:

• Providers will respond to lower fees by providing less care to seniors
• Providers will shift costs to non-seniors in the form of higher fees, higher insurance premiums and higher state and local taxes.

The first of these options means Medicare will become more like Medicaid. Doctors will restrict access by offering fewer appointment options for Medicare patients just like they currently do for Medicaid patients. Hospitals may respond by reverting to the use of open wards instead of providing private rooms. Expensive treatments will be unavailable as cost-reducing takes precedence over patient care.

Medicare For All is socialized medicine and similar healthcare systems in other parts of the world, including Canada, Great Britain and Sweden always are plagued by restricted access and declining quality of care. Expect the same in this country.