Green Shadow Cabinet: Making a choice at 48: Medicare for all, or no Medicare at all

August 5, 2013
Margaret Flowers, Secretary of Health

The Medicare program just reached its 48th birthday. Events were held in 27 cities across the nation to celebrate, but we will have to do more if we hope to preserve this national treasure. The very real attacks on Medicare from both Democrats and Republicans raise concern about its future survival and the direction that our healthcare system is going in the United States.

As outlined in Paul Ryan’s “Path to Prosperity,” the Republicans support turning Medicare into a voucher program which would provide funds for seniors to purchase private insurance. This would change Medicare from a defined benefit program in which particular services are covered to a premium support program in which one would only get the services they could afford. Similarly, the Democrats led by Obama have expressed support for cutting Medicare in response to the manufactured fiscal crisis. Little known is that last September, Jonathan Gruber, a White House health adviser, announced at the National Press Club the intent to eventually put Medicare into the state health insurance exchanges in the Affordable Care Act (ACA). This would similarly privatize and dismantle Medicare.

The ACA, which became law in 2010, is further privatizing health care and adding more bureaucracy – through managing the new exchanges, providing subsidies and enforcing both the mandate to purchase insurance and the new regulations – to our already overly complicated system. All of this is increasing health care spending rather than bringing it under control. Health spending is estimated to be $3.1 trillion in 2014 which is around 18 percent of GDP. Compared to the average industrialized nation, the US spends 2.5 times more per person each year on health care.

This excessive spending might be rationalized if it resulted in excellent health outcomes and high rates of coverage. But when compared to other nations, the US does poorly in both categories. Our life expectancies, which rank 26th among the industrialized nations, are falling. And in 2014, when the state health insurance exchanges and the individual mandate take effect, the government estimates that 44 million people will still be without health insurance of any kind. This is not much of a change from the 50 million people that were uninsured before the health law was signed.

The initial rosy yet still inadequate predictions of coverage under the ACA were that it would cut the number of uninsured in half when it was fully implemented in 2019. Since passage, the estimated number of people who will obtain health insurance has been steadily decreasing as the poorly planned ACA falls apart. This is not surprising given that the law was largely written by and for the health corporations that are profiting from the current healthcare system and not in the interest of the public.

The deterioration of the ACA began within the first year when the Department of Health and Human Services (DHHS) started issuing waivers to exempt companies and unions from provisions required by the ACA. In the first year, so many requests for exemptions were filed that the DHHS created an expedited waiver process, and 1,200 waivers were granted. These included waivers for businesses like McDonalds to continue providing very low benefit health plans instead of the more comprehensive insurance mandated in the ACA.

In July, 2012, the ACA felt another blow from the Supreme Court which ruled that states did not have to comply with the Medicaid expansion. Twenty-six states had complained that the Medicaid expansion was unwieldy and coercive. As of July 1, 2013, only 24 states had committed to the Medicaid expansion. This will leave millions of the most vulnerable people still without coverage.

And recently, the Obama administration announced that the mandate for large employers to provide health insurance or pay a penalty would be delayed a year and not take effect until after the midterm elections. This removes another pillar of the Affordable Care Act.

None of this bodes well for the future of our health in the US. Privatization of health care means more people are left out or will find health care services unaffordable. But there is another alternative. A publicly financed and administered single payer universal health care system, known as Medicare for all, would guarantee lifelong comprehensive high quality health care for everyone.

A new study by Professor Gerald Friedman of Amherst, MA on Medicare’s anniversary demonstrates that a single payer health system would cover everyone, control the rise in health care costs each year more effectively than the ACA and save $1.8 trillion over ten years. By reducing the bureaucracy alone, $476 billion would be saved in the first year. Negotiation of fair prices for pharmaceuticals would bring the first year’s savings to almost $600 billion. This savings would be applied to necessary expansion of the health care system to cover everyone.

The new study also outlines a very specific way to pay for a single payer health system that would be progressive, rather than the very regressive financing that exists today. In addition to current federal spending, the new system would create a small tax on the top 5 percent of earners, a small tax on unearned income, a micro-tax on stock and bond transactions and a small employer tax. In exchange, there would be no more health insurance premiums, co-pays or deductibles. And local and state governments would no longer be required to pay insurance premiums for their employees or fund state Medicaid systems. Reduced spending by individuals and state and local governments would mean that more money would be available for other necessities and could be pumped into the economy.

Included in the study are funds to transition workers displaced by the new single payer system into new jobs and funds to phase out investor-owned health delivery facilities over 15 years.

We have no more excuses to delay moving immediately to a Medicare for All system. It’s time to end the failed experiment of market-based health care and join the civilized world. It’s time to preserve and protect our national treasure, Medicare, and expand it immediately to everyone living in the United States.

Dr. Margaret Flowers serves as Secretary of Health in the General Welfare Branch of the Green Shadow Cabinet of the United States.

Article source here.