By Susanne L. King, M.D.
The Berkshire Eagle (Lenox, Mass.), July 13, 2011
Celebrating 46 years this month, Medicare continues to pay for the health care of 47 million Americans. Medicare has improved the health of our seniors, reduced their risk of poverty, and improved the financial security of their families.
Unfortunately, there are those who would like to “cut Medicare” by raising the age of eligibility, or by increasing the co-pays and deductibles of beneficiaries. Rep. Paul Ryan (R-Wisconsin) even proposed ending the Medicare program, replacing it with a system of vouchers to buy private insurance. The vouchers would decline in value over time, leaving seniors with increased financial hardship when they became ill.
The current Medicare program does have its funding problems that need to be addressed, but Medicare is the victim of skyrocketing health care costs, not the cause. As the past director of Medicare and Medicaid programs, Bruce Vladeck, said recently, “the current so-called crisis is in fact an artifact of broader problems with the federal budget and budgetary politics and should not be used as an excuse to dismantle one of the most important programs the federal government has ever operated, or to renege on the commitment this government has made to generations of working people as it has collected taxes from them.” He goes on to say that we are not having a “Medicare crisis” but rather, a “revenue crisis,” with federal revenues at a much lower percentage of the gross domestic product (GDP) than in 1999, when we had a balanced budget rather than a deficit.
How can Medicare be improved and strengthened? The financial integrity of the program could be stabilized by an upturn in the general economy, by additional federal appropriations from general tax revenues, or by increasing the payroll tax by a small fraction of a percent (the last system-wide adjustment was in 1985). In addition, money could be saved by allowing Medicare to negotiate drug prices with pharmaceutical companies, and by stopping the current practice of paying private Medicare plans more than traditional Medicare.
However, to reap maximum health benefits and cost savings, Medicare should be improved and expanded to include everyone. Rather than providing coverage only for the elderly and disabled who have the highest medical costs, the program would be strengthened if Medicare coverage included the young and healthy.
In our current system, private insurance companies cover younger, healthier workers and their families, screen out the sick, and deny care for people who become sick. At the same time, private insurers reap obscene profits and afflict our health care system with mountains of paperwork and unnecessary administrative costs, which devour 31 percent of our health care dollars. Private insurance companies also pay multimillion-dollar salaries to their CEOs, who continue to dream up new ways to game the health care system and increase profits.
First quarter earnings for all major health insurance companies were up this year. United Health Group’s profit during the first three months of 2011 rose 13 percent to $1.35 billion, from $1.19 billion last year, and the company’s CEO, Stephen Helmsley, was at the top of Forbes 2011 Executive Pay List. His total compensation of $101.96 million last year made him the highest paid corporate executive in the United States. To make this kind of money, insurance companies have to spend far less paying their policyholders’ medical claims than anyone thought possible. In contrast, the administrative overhead for Medicare is less than 3 percent, because there are no CEO salaries, no shareholder profits, and no marketing campaigns.
The bottom line for private insurance companies is their profit. The bottom line for patients, health care providers, and our society is medical coverage to care for everyone, in a cost-effective manner. The way to do this is not to cut Medicare, but to eliminate private insurance companies. The solution to our health care crisis is to establish a national “improved Medicare for all,” publicly financed but privately delivered, a single-payer health care program for everyone in our country. Unfortunately President Obama’s new health care law builds on the faulty foundation of private insurance companies.
The numerous benefits of a national “improved Medicare for all” would include:
* Universal, comprehensive coverage, with no co-pays or deductibles. Everyone would be covered, and coverage would no longer be tied to a job.
* Freedom to choose doctors and hospitals.
* $400 billion in savings by eliminating the administrative waste of the private insurance industry.
* Medicare’s negotiation for decreased prices for drugs and other medical supplies.
* Savings from the use of global budgets for health facilities.
* Elimination of personal bankruptcy due to medical expenses.
* Improved health and productivity of workers, because they have access to health care they can afford.
* Stimulation of the economy, because families would have more money to spend.
* Elimination of the onerous administrative burdens of doctors, thereby freeing them to see more patients.
* Relief for small businesses and towns, who would no longer have to pay for health insurance for their employees.
Legislation exists in Congress to establish this single payer program, the Extended and Improved Medicare for All Act, H.R.676. Pass this bill and everyone can celebrate, while saving enough money to provide every American with health insurance coverage.
Susanne L. King, M.D., is a Lenox-based practitioner.