American Retired Seniors

Mr. Mark Zilberman, LCSW sent the following informative response to my article “Strong Arming Seniors Will Be The Death of Medicare, by Pat Boone and Jim Martin: 

“Boone and Martin’s article is a reign of error and deception.”

• 1) Allowing people to opt-out of Medicare is not an opportunity for cost savings for Medicare but one for insolvency. This is, of course, is the goal of the writers. As with most Conservative crusades their motive is to remove government from being the provider of a given service and supplant it with a private sector source and reap huge profits. The writers are well aware that Medicare can insure the public with a 2% administrative cost versus the private sector which must commit 20-25% to cover their “administraive costs”. These costs cover profits, shareholder dividends, executive salaries, etc… Conservatives will blather on about the cost containment efficiencies of competition. Of course, the imperative of their “administrative costs” vastly overwhelm these savings and this is an empirical fact and they know it.

• 2) Whereas the government’s efforts to dissuade people from opting out of Medicare may seem unfair, it is little different than what private insurers do and have done for a VERY long time. The truth is that insurance relies on contributions being made by the well and healthy to “spread the risk”. Just imagine if people could sign up for insurance only when they were ill and unenroll upon recovery. Suppose you were going to have a surgery that costs $25K. Great! I’ll go to BC/BS and pay this month’s premium for $1000 and be $24K ahead. Of course the insurer (government or private) would close shorthly thereafter.In the case of private insurers they invoke the pre-existing exclusion to preclude this. Thereby, assuring adequate funding by spreading the risk. Medicare has the same motive in their effort to stymie opting out. Again Boone and Martin (aka “The Funding Father of The Conservative Movement”) knows this.

• 3) The writers apprise Medicare as being “sick” by citing how much care would cost in 09 vs. 07. Surprise, surprise! It’s going up! Guess what, so are the costs to private insurers by even greater numbers. They say this merits their description of the system as being “a catastrophe”. Of course, they don’t use any such descriptor to describe the private for-profit insurance sector which faces the same phenomena.

• 4) They suggest that Washington is not using the correct word to describe governments efforts to address the fiscal challenges. They insist that the correct word is “rationing”. They support this by citing Medicare’s limiting reimbursements to providers (the private insurers have been doing this since they invented HMO’s in the 70’s. Every insurer has a schedule of reimbursements. It’s take it or leave it. IOW, rationing.). They cite that providers are abandoning the program. Ever notice the way you can’t find the same doctors in one HMO vs. another when your employer switches plans? That’s because “providers have been abandoning the program”. They say that an example of rationing “limiting the services available to enrollees”. Is there anyone out there with a private commercial policy that covers everything? Then, that is rationing, as well.

• 5) They say that if 1% of retirees choose not to participate in Medicare there’d be $1.5 billion in savings in Medicare costs. Of course, they don’t submit the loss in revenue from the loss of premiums. Could it be the government would need to make up that revenue by cutting the SS of those that choose to opt-out? Would this not open a flood gate of opt-outers thereby hastening the dissolution of the system. Of course, the liklihood of mass opting out is low because there are precious few like Boone and Martin who can afford to pull out their wallets and pay cash for care (as is the case in most third world countries). But, don’t worry the Boones and Martins of America stand ready to offer private sector options. No doubt these will be jewels with low premiums and generous benefits. For now. As the public cheaper and more efficient system starts to crumble, these “loss leaders” will start to increase in premium costs and decrease in benefit allocations. If you doubt it, a quick study of the new private sector Medicare Pt. D medication program over the few years since its inception will allay you.

The truth is this. There are alternatives to our present system. We can have a single payer system (as with Canada, Japan and Medicare) where costs are controlled by one insurer limiting how much they will pay. We can have a socialized system where the health practitioners work for the government (like in Britain or the VA) or a hybridized system where the providers and insurers are private (as in Germany) but the government mandates that insurers be non-profit organizations and stipulates maximums on a range of charges. Americans pay twice as much as the second most expensive country for their health care. Here its 18 cents out of every dollar. In Canada and Switzerland it’s 9 cents. It is NOT the best system in the world. In fact, the WHO (World Health Organization rated it 37th). We DON’T have the longest life expectancy.

In fact, the CIA says we rank 46th in this measure. What our system excels at it making lots of money for a certain group of people. This is not stated derisively. It is a fact. It is an American value that allows for unlimited opportunities to succeed and gain wealth. The health care system functions brilliantly in this way. It is an amazing and virtually unparalleled vehicle for economic wealth. It is not though, particularly good at delivering quality healthcare in an economically efficient manner. It is clear from an abundance of global empirical data and facts that no system can have it both ways. America will have to decide.

Mark Zilberman, LCSW

Filed under: Medicare and Health Insurance