Medicare for all less costly than current system

By Tom Maertens

Tom Maertens held several science and technology positions in the U.S. government, including minister-counselor for Environment, Science, and Technology at the U.S. Embassy in Moscow, where he had oversight responsibility for a $300-million-per-year science program with the Russian government.

According to the Milliman Medical Index, the cost of health care for a typical American family of four in 2018 was $28,166. This entailed coverage by an average employer-sponsored preferred provider organization (PPO) plan and insurance premiums. It was an increase of $1,222 from 2017.

In Minnesota, health care costs are expected to double in seven years, according to the state Department of Health.

Many interests benefit from the current system. As the New York Times reported Feb. 23, “Even before Democrats finish drafting bills to create a single-payer health-care system, the health care and insurance industries have assembled a small army of lobbyists to kill Medicare for all.”

This is what occurs when health care is a profit-making industry. Despite the platitudes and reassurances, the health-care industry’s first priority is making money.

That’s why every major industrialized country has universal health care guaranteed by the government — except the United States.

The opponents, including the Republican Party, try to discredit government sponsored health care, including ObamaCare, by calling it socialized medicine. Without any sense of irony, Donald Trump constantly rails against socialism while he praises North Korea, a “socialist” dictatorship which is a virtual prison camp, as having a bright economic future.

The U.S. does have socialized medicine, administered by the Veterans Administration and the Bureau of Indian Affairs. When the government decided to set up the best system possible for veterans, it set up an organization that owns the hospitals, hires staff and provides services cost-free to eligible veterans (which I benefit from).

Democratic socialist countries such as Denmark, Finland, The Netherlands, Canada, Sweden, Norway and Ireland, provide health care for all. Surveys show that those countries have much less poverty and significantly higher overall life satisfaction than the U.S.

They have lower rates of homicide, incarceration, sexually transmitted disease, child mortality, obesity, abortion and better education. They also have longer life expectancy by two to three years. In fact, 39 countries, the ones with universal health care, have longer life expectancy than the U.S. No politician in those countries could propose eliminating their health-care systems and survive an election.

Critics complain that government-guaranteed health care means rationed health care and long waits. Health care is rationed everywhere; it’s expensive.

In the U.S., the health industry rations health care to those who can pay. Anyone who doubts that should try to get a medical procedure without proof of insurance or ability to pay.

Medicare and Medicaid already cover more than a third of U.S. residents and pay more bills than private insurance. According to the estimates of some medical experts, those agencies, plus the VA, remove as much 85 percent of the risk from the health insurance pool.

Private insurance companies insure the remainder, the healthiest people, weeding out anyone who might actually need health care. In addition, they cut costs by refusing claims, contesting expenses, imposing lifetime limits on care, limiting the payout per illness, requiring prior authorizations for treatment, and shredding coverage with ever more exclusions.

The big insurance companies pay employees — and even award bonuses — for rejecting claims and terminating patients with chronic illnesses. In addition, there are out-of-pocket expenses, co-pays, and deductibles.

Insurance companies still manage to spend as much as 47 percent of the premium dollars they receive in “loading fees,” — non-medical expenditures — according to a University of Minnesota study.

That includes executive compensation. The head of Medicare/Medicaid makes $250,000 per year. In contrast, the former head of United Healthcare, William “Dollar Bill” McGuire, was paid as much as $125 million per year and accumulated $1.6 billion in stock options.

McGuire’s major innovation was to deny more claims than other insurance companies, 43.9 percent for its California subsidiary, according to a survey by California Nurses United. The second place company, Cigna, rejected 39.6 percent of claims.

For this inferior coverage, we pay 17.9 percent of GDP, the highest in the world. The health-care systems in Scandinavia, UK and Canada are essentially Medicare for all and cost 9 percent of GDP, half of U.S. medical costs.

In view of these realities, Hans Rosling (“Factfulness”) wonders why anyone would believe that private markets and competition should ever be allowed near the delivery of public goods.

The private insurance industry extracts $500 billion from the system every year … enough to fund universal health care.

As Nobel economist Paul Krugman wrote, “The real issue with Medicare for all isn’t costs — the taxes needed to pay for it would almost surely be less than what Americans now pay in insurance premiums.”

Also published in the Mankato Free Press, March 17, 2019.