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America’s Left/Liberals, and their spokesman Barack Obama, insist that everything about health care would be wonderful if only the government would take it over. Their preferred plan, embraced by Obama, is to throw Medicare open to everyone, and then over time force everyone into it. They say if you have employer-provided insurance, you can keep it. But that choice will be up to the employer, not you. As the government forces costly regulatory burdens, like guaranteed issue and community rating, onto private insurance, employers facing the soaring premiums will just dump their workers into Medicare. These costly regulatory burdens, plus the taxpayer subsidies for Medicare, will eventually drive out all private insurance alternatives.
This is what the left has been proposing for many years now. They have called it "Medicare for All." No point in denying that now, when they have got the President and Congressional majorities to pass it. The question to consider is, "Is Medicare for All a good idea?"
Medicare Is Already Bankrupt
The Medicare Board of Trustees released their latest annual report earlier this month. It shows that Medicare is already hopelessly bankrupt. We don’t know how we are going to pay for all the Medicare promises we have already made.
The Trustees Report estimates that the unfunded liability for Medicare alone is $89 trillion. Social Security adds another $15.1 trillion in unfunded liabilities, for a total of $104 trillion. And that doesn’t even count Medicaid. The entire American economy right now only produces about $14 trillion a year.
By 2018, less than 10 years from now, Medicare Part A alone will be running a deficit of close to $100 billion. General revenue contributions for Medicare Parts B and D that year are now projected to be $364 billion. Consequently, the deficit for Medicare alone that year will be close to $500 billion. And this assumes a scheduled reduction in doctor and hospital reimbursements under Medicare of over 20% starting in 2010.
Medicaid will also be costing the federal government close to $500 billion per year by then, with another $300 billion spent on the program by the states. That is a total burden on general taxpayers for these two programs alone of $1.3 trillion by 2018, in addition to payroll taxes and Medicare premiums. Medicare premiums by 2018 are projected to be about $750 per month per beneficiary, covering only 14% of expenditures. Medicare will be spending by that year close to $17,000 per beneficiary.
Medicare Part A will run out of funds to pay promised benefits by 2017, with a 20% shortfall in revenues. Paying all promised benefits for Part A alone over the long run would require raising the total Medicare payroll tax from 2.9% today to 12%. That is in addition to the Social Security payroll tax of 12.4% today, which would have to increase to close to 18% to pay all promised benefits for that program. That would result in a total payroll tax rate of 30%.
Given this overwhelming financial disaster, does it make sense for the government to take on even more financial burdens through Medicare? Medicare is supposed to be for retirees. What would all these new financial burdens for everyone do to the program originally intended for them?
Indeed, one has to ask, do the Medicare for All nuts even understand numbers? Or are they what they appear to be, numerically illiterate?
Government Health Care Rationing
Medicaid, which pays for health care for the poor, shows where Medicare for seniors is headed. Medicaid promises free health care for the poor, but then refuses to pay the doctors and hospitals for it, or at least pay them enough to provide quality health care for the poor. As a result, about 40% of doctors and hospitals already refuse to take Medicaid patients.
This translates into real suffering for the poor on Medicaid. They have to scramble to get appointments with the doctors who will see them, and the doctors give them shorter appointments and less attention to fit what the government is willing to pay for them. They have to wait longer to see the essential specialists or for admissions to the hospitals willing to take Medicaid patients. The end result studies show is that the poor get less adequate health care, and suffer worse health outcomes, including more and earlier deaths from heart disease and cancer. This should be no surprise, because it is the inevitable result of all government-run health care throughout history the world over.
May 28, 2009