Intro. Ever wonder why the health insurance industry and their paid for (by Super Pacs) House GOP Tea Parties are so anxious to tear apart Medicare? It isn’t because they are ideologically opposed to the so called welfare state. Big business loves its corporate welfare. They don’t hate old folks. As long as the elderly have money to spend, they are welcome to give it all to a Fortune 500 company. They aren’t really concerned about balancing the budget. If they were, they would increase taxes on the rich.
No, privatizing Medicare will make some of the GOP’s bests donors a whole lot of money—which means more money for folks like Rep. Paul Ryan---who got a lots of money from the insurance industry (that we know about) in 2010 and who stands to get even more from the new Super Pacs with their unlimited anonymous funding.
How does it all work? Here’s what will happen if Medicare is dropped and seniors are told “Buy private insurance.” Briefly, the healthiest seniors will buy private. The sickest will all get transferred to Medicaid. (For all those who hate math, just skip to
summary):
In 2011, the sickest, most expensive 25% of Medicare patients will cost the government $425 billion. That is 85% of the total $550 billion that the program will spend. The healthiest 75%, in contrast, will only accumulate medical bills of $125 billion.
There are about 47 million folks on Medicare now. If the 75% of Medicare enrollees who are in good health are forced to buy private insurance, their monthly payments will go from $250/month to something closer to $1000. (I base this estimate in the fact that a typical private health insurance policy back in 2007 for someone aged 50 or less was about $500/month, and we all know that health care premiums are rising. This last number has to be a guess, because how many folks over the age of 60 even qualify for a private insurance plan?) That means private insurers would be able to collect $423 billion from folks that only spend about $125 billion. Hell, even if they only collect $500/month, they will still make a fortune.
Now, we all know that cherry picking will be illegal under the new health care guidelines. However, health insurers are masters of stealth cherry picking. One way to weed out folks who use a lot of health care services is to have high deductible and high co-payments---say 20-30% must be paid out of pocket and that only after someone has spent $2000-$5000. The high front end deductible chases away the poor---who are also more likely to be sick, especially among the elderly, since illness is the number one cause of adult poverty in this country. The co-payment is a burden on people who have a lot of necessary medical expenses, like dialysis or heart surgery or chemotherapy. Old folks on a fixed income with significant diseases will soon become broke if they have to pay $1000 a month plus $2000 plus 20%. At this point they will begin dying on the street, and Congress will restore Medicare. Right?
Wrong.
The sickest 25%, the ones who cost Medicare $425 billion a year will be enrolled in (wait for it)----
Medicaid!. That’s right. The program that takes care of poor pregnant women and their children also covers elderly folks whose medical expenses are way too high for their fixed incomes. At the moment, with all elderly being on Medicare, that isn’t a whole lot of people. And Medicaid pays the Medicare premiums for those who are somewhat poor and pays the premiums
and the out of pocket for those who are very poor. Under the new laws of health care reform, it will be even easier to enroll retired folks on Medicaid, since their SSI will not count as income.
So, what is the net result of scrapping Medicare and telling seniors “Here is a voucher. Go buy some insurance” as the House Republicans recommended under the so called Paul Ryan plan? The nation’s health insurance industry will pull in an extra $423 billion a year in premiums, while paying out around $125 billion in claims. That leaves $300 billion extra for corporate jets and CEO bonuses. The states (which administer Medicaid with help from the federal government) will find themselves on the line for an additional $425 billion a year---much of that concentrated in states with a high percentage of retirees like Arizona and Florida.
The best part for the private insurance industry--- no mandate will be needed. Seniors aren’t like 20 year olds. They feel death knocking on their door. They will seek out health insurance. They will scrimp and save and do whatever it takes to keep themselves insured.
The Summary Wow! What is not to like about the House GOP’s “solution” to rising Medicare costs. Insurance companies make an extra $300 billion/ year while most of the medical bills get sent to the states. The federal government will save only $100 billion a year through this change---not even enough for a bank bailout----while seniors will see their out of pocket rise, their choices dwindle and their satisfaction plummet.
Wait! Did I say the feds would save $100 billion a year? Silly me. The Paul Ryan plans includes corporate welfare. Seniors will be given vouchers to help pay their private premium costs. Say the government decides to give out $500/month---half the tab. That means the feds would spend close to---what's $6000 a year times 37,000,000 old folks on Medicare? Ouch. My brain is starting to hurt. But I know one thing, it is more that $100 billion.
Net saving: zilch.Right now, the US spends about $7000/person/year for crappy health care that gives us low life expectancy and high infant mortality. We spend over twice as much per person as any other country on earth, including Canada and France. And, our public contribution to that health care bill easily matches what so called socialized medicine countries spend, meaning that our health care system is just as much of a tax burden as that of our neighbor to the north, only we get less for our money and we have to throw in a matching amount of private funds from our own pocket.
You do not need to be a math whiz to see that this adds up to Grand Theft by the health insurance industry and their GOP Congressional lackeys.But they are not satisfied. They want more, more, more.
Are we gonna give it to them?
Links:
http://healthinsuranceinfo.net/getinsured/texas/financial-assistance/medicaid/http://www.cbo.gov/ftpdocs/63xx/doc6332/05-03-MediSpending.pdfhttp://www.cbo.gov/ftpdocs/63xx/doc6332/05-03-MediSpending.pdfhttp://www.cbo.gov/ftpdocs/63xx/doc6332/05-03-MediSpending.pdfhttp://www.cbo.gov/ftpdocs/63xx/doc6332/05-03-MediSpending.pdfhttp://www.cbo.gov/ftpdocs/63xx/doc6332/05-03-MediSpending.pdfhttp://www.cbo.gov/ftpdocs/63xx/doc6332/05-03-MediSpending.pdfhttp://www.cbo.gov/ftpdocs/63xx/doc6332/05-03-MediSpending.pdfhttp://ahlalerts.com/2010/12/30/medicare-enrollment-to-increase-in-2011-as-baby-boomers-join/http://assets.aarp.org/rgcenter/health/i24_hcr.pdfhttp://www.slate.com/id/2290509/http://www.opensecrets.org/politicians/summary.php?cid=N00004357PS: Almost forgot. The other reason I think the privates will demand $10,000/year per senior is that is the average spending of Medicare per senior. However, the privates do not intend to enroll the average Medicare recipient. They will enroll the healthiest ones.
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
