Read the Fine Print on the “Medicare for All” Plan

Senate Democrats have released the details of the “Medicare-for-all” plan under the appealing banner of, “Leaving No One Behind.” This plan apparently has broad support. I can understand why.

The Affordable Care Act (ACA) kept insurance premiums in check initially via massive back-end payments to the private payers. Once payers stopped getting these government subsidies, out of pocket costs sky-rocketed, making adequate insurance unaffordable to all but the most affluent. Millions of hard-working people lost health insurance they liked and doctors they trusted, so that other people could obtain substandard insurance that didn’t cover their needs. I’ve blogged about Obamacare insurance plans – which gave patients the Illusion of insurance, but which did not, in fact, provide medical coverage for basic treatments like cancer.

It is no wonder Medicare-for-all has appeal. However, before you vote on Tuesday, you should read the fine print.

Here are the key points of the plan to socialize the U.S. healthcare system:

  • Medicare-for-all will make having private insurance illegal.
    • The plan prevents competition against the government healthcare system.
      • “It shall be unlawful for a private health insurer to sell health insurance that duplicates this Act.” (Section 107)
      • “It also shall be unlawful for an employer to provide benefits for employee, former employee or the dependents of an employee or former employee that duplicate the benefits provided under this Act.” (Section 107)
  • It requires a 40% cut in reimbursement to hospitals and physicians. 
  • It will cost at least $32 trillion, based on estimates by the Urban institute, a left-leaning think tank.
  • It includes an $11 trillion tax increase which would still fund less than half the cost (and which will have to be levied against the middle class).
  • It requires a 50% reduction in the rest of the Federal budget.
    • This means that there will have to be large cuts in existing programs like Social Security, and there will certainly not be new programs like “free college tuition.”
  • It would add $14 trillion to the national debt over the next decade.

Additional points to consider:

  • Medicare is already broke. The Medicare trust fund is expected to run out of money in about 2026.
  • Medicare has a fraud and abuse problem already. The General Accounting Office (GAO) which audits the federal government, has had Medicare on its list of programs at high risk for waste, fraud and abuse since 1990 because of its “size, complexity, and susceptibility to mismanagement and improper payments.”
  • The standard of living in the US will drop for everyone. The impact of Medicare-for-all, which includes massive tax increases, huge federal budget cuts and an even bigger expansion of the national debt, is predicted to reduce the standard of living for each person in the USA by about 15%.
    • That means smaller homes, smaller cars (driving older cars), more expensive gasoline, more expensive food, and less disposable income.
  • Hospitals cannot manage a 40% cut in revenue without large reductions in staff and services (yes, layoffs in the healthcare sector).
    • This means fewer available hospital beds, longer waiting times in Emergency rooms, long waiting times for operations (e.g. cardiac bypass, hip replacements), and long waiting times for diagnostic studies and procedures. Rationing of healthcare will have to follow. That is considered normal in the socialized healthcare systems U.K. and Canada.
  • Since private health insurance will not be legal under the Medicare-for-all Plan, there will be no safety valve in the US. I previously blogged about my experience working at The Western Infirmary in Scotland. While the National Health System (NHS) is not without merit, it is the existence of a parallel private insurance system that has allowed the NHS to survive in the United Kingdom (UK).
  • Socialized healthcare isn’t working in the UK or Canada. The NHS in the UK is bankrupt. I received an email from a physician colleague in the UK two weeks ago telling me that she anticipates she will have to start billing for her services as soon as the NHS changes the payment model for its service.
  • It will lead to doctor shortages. The average U.S. physician has over $200,000 in student loan debt. A 40% cut in pay means that many physicians will be unable to repay their student loans.  Physician shortages will follow.
  • There will be rationing of care (basic care): Socialized systems must ration care. The UK and Canada make rationing decisions based on a number of factors, one of which is the annual cost per quality of life years (QUALY). Treatments that exceed the limit they have set are not covered. Healthcare rationing decisions in the UK are made after analysis of the evidence available. Hyperbaric Oxygen Therapy (HBOT) is generally not covered in the UK or Canada (there are some regional variations by province). I recently blogged about a Canadian prospective trial of HBOT for diabetic foot ulcers, the results of which were manipulated to ensure a negative outcome, perhaps to justify not covering HBOT for this indication.

Practitioners and business entities that have (and continue to) abuse the Medicare system with improper billing are responsible for the perverse spiral of events which produced the designed-to-fail ACA and led us to this point.

Unfortunately, Medicare-for-all further emboldens the entities currently abusing Medicare. Medicare will get bigger, so waste, fraud and abuse will get bigger.

In summary, the fine print reads like this: massively expand a currently bankrupt government-run insurance plan with a fraud problem while making it illegal to have private insurance, drastically slash payments to doctors and hospitals thus reducing access to care, explode the national debt, gut all other government services, and saddle the middle class with a massive tax increase in order to copy a program that is failing in the UK and Canada. However, at least medical care will be equal for everyone, like it is in Cuba.

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