Friday, August 7, 2020
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Bernie’s Medicare For All — A Study In Voodoo Economics

In the 1980s, the Reagan administration reduced top marginal tax rates by a significant percentage. The theory was that some of the benefits would “trickle down” from senior executives to lower-paid individuals, thereby providing perhaps all employees with an indirect benefit. On the surface, the concept made sense-although Reagan’s economists failed to factor in one major problem: GREED. In 1978,  the CEO (Chief Executive Officer)- worker compensation  ratio was about 30 to 1. By 2018,  according to the AFL-CIO Labor Federation, it had ballooned to 287-1. Over the years, those that disparaged Reagan’s program came to refer to it as “Voodoo Economics”. Recently, Bernie Sanders released some details concerning his proposal to provide Medicare for All.  As I will show you, the various components of his plan take the concept of Voodoo Economics to a whole new level. Many of Bernie’s  numbers are presented as Trillions of dollars  of expenditures and revenues  over a ten-year period. First of all, virtually nobody really  thinks  in terms of Trillions. I would hazard a guess that most of us don’t even know how many zeros are in a Trillion. There are 12. (I looked it up.) There are approximately 330 Million people in the U.S. According to the latest data from Forbes Magazine, only 46 Americans have a net worth of greater than $10 Billion. (Nine zeros.) Beyond the issue of forcing readers of his plan to think in unfathomable numbers, Bernie makes his calculations based on ten-year projections. I submit that, today,  especially given what’s happening  out there in the real  world, ten-DAY projections are probably suspect. It would make much more sense to me  if his campaign were to  develop numbers based on costs and revenues per person. Below are my comments on the “information” contained on Bernie’s website. The stuff in italics consist of the actual wording. “According to a February 15, 2020 study by epidemiologists at Yale University, the Medicare for All bill that Bernie wrote would save over $450 billion in health care costs and prevent 68,000 unnecessary deaths – each and every year. What our current system costs over the next decade: Over the next ten years, national health expenditures are projected to total approximately $52 trillion if we keep our current dysfunctional system.  How much we will save: According to the Yale study and others, Medicare for All will save approximately $5 trillion over that same time period. $52 trillion – $5 trillion = $47 trillion total “ In 2017,  U.S. medical costs per capita were  $10,209. Let’s assume they are currently about $11,000. Based on a population of 330 Million, the total outlay is about $3.6 Trillion.  So, over ten years, $52 Trillion might be a reasonable number. However, Bernie goes on to say  that his Medicare for All will save $5 Trillion over ten years. Simple math equates that to a 10%  savings. Hardly worth the effort. Also, he makes no reference to the Federal budget annual deficit. All other components of the overall budget aside, what effect would healthcare spending  at this level have in the future? One factor that must be considered is that, if private insurance is effectively eliminated and all costs are billed to Medicare, the administrative  job losses in the insurance industry, medical offices and hospitals would potentially be catastrophic. Somehow, any Medicare for All program […]
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The Death Knell For Private Health Insurance?

Teri is now officially on furlough, it began Tuesday, the day before our 17th anniversary. She was notified by her manager that while the company is continuing to offer insurance coverage for employees, since she is no longer receiving a paycheck from the company, she will receive a bill before the month from the insurance company for her premium. The burning question now is whether the bill she receives from the insurance company will be for the amount that she pays out of her paycheck every week, or the total premium amount for her coverage. This can be a critical difference. In my last job, I was blessed with a “Cadillac” health plan, for which I paid $50 a paycheck to cover Teri and myself. The raw total for my knee replacement 9 years ago assayed out to $109,000. My total out-of-pocket expense? $371 and change. When I took a voluntary buyout from the company almost 5 years ago, one of the side bennies they offered us was to bridge our health insurance for 4 months via COBRA. My monthly insurance premium to extend the coverage? $847 a month. This is what Bernie Sanders has been hammering away at for the past 5 years now, and even if Joe Biden is the nominee, he is going to fave increasing pressure to move harder left on the issue of Medicare-for-all. Because if there is one thing that this corona-virus pandemic has done, it is to take what was once a theoretical issue and turn it into a practical, everyday issue affecting everyone. What was the biggest resistance to Medicare-for-all? People were adverse to the thought of losing the insurance they already had. That insurance was like a security blanket, it might have holes in it, but it was warm and comforting just to have it, and like any child, people were loathe to give it up. Whenever you actually have anything, the possibility of losing it is entirely theoretical. But now, thanks to the pandemic, millions have suddenly become unemployed. If they were flat out fired, or if the company shut down for good, they are without health insurance. And if they are on furlough like Teri, it’s an open question as to whether the monthly premiums will be something that they can afford. Viola! The theoretical has just become reality. And at a time when a full course of corona-virus treatment, including a ventilator, tops out at somewhere in the neighborhood of $74,000. Millions of people are now uninsured, with a daunting prospect of trying to get insurance that they can afford. The Democrats should be hammering daily in the media about Trump’s refusal to reopen the Obamacare exchanges for a special period. But as the crisis drags on, even people who are lucky enough to still be employed, and covered by insurance, the specter is always over their shoulder that if this drags on too long, they too could find themselves on the street, without coverage. And since they’re just sitting around the table with paper and a calculator anyway, they might finally realize that a Medicare payroll tax of $135 a month, the going premium for Medicare, is less than they’re paying in payroll deductions for their current plan, along with co-pays and deductibles.. And nobody can take it away from them. Suddenly, Bernie’s radical socialist […]
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Want Medicare For All? Here’s Your Baby Step

When opportunity knocks, you had better answer the damn door. Starting by the end of this week, Teri and I are going to find ourselves doing something that neither one of us has done literally for years. We’re going to be on a daily mail watch. No, not for something from unemployment, she’s all set there. And no, nothing from the Munchkin man, we have direct deposit for our bonus kaboodle. What we’re going to be waiting for is an envelope from her healthcare provider. Teri is on furlough, and when she was placed on furlough, her boss advised her that her healthcare coverage was still going to be available to her. But since she would no longer be having weekly deductions for her premiums through her paycheck, she would receive a monthly bill that it would be her responsibility to pay if coverage were to continue. And therein lies the rub. The vast majority of Americans have their healthcare through their employers, and it’s contributory healthcare, meaning that the employer picks up some of the tab, and the employee has payroll deductions for their share. And this is why we’ll be having a daily watch party at our mailbox. It all depends on the company. If Teri’s employer is a straight shooter, then they’ll continue to fund their part of her coverage, leaving her only the normal weekly portion, or about $130 a month. But if the company notified the insurance company that while their plan will remain active, the company will no longer be paying their share during the furlough period, then the monthly bill that Teri receives will likely be 3-5 times what she pays on a monthly basis to continue receiving healthcare. And if Teri stops coverage now, due to the expense, will she be able to resume coverage when she returns to work, or will she have to wait until the next open enrollment period in November, with coverage to resume next January? There is nothing unusual about our little two adult, two pootie family, nor is there anything strange or unusual about Teri’s employer. And while it certainly helps that the federal government is going to pitch in for the next four months to ensure that employees lose nothing from their regular paycheck due to the corona-virus crisis, that won’t do anything to help those families from facing a financial or healthcare crisis if they can’t afford the health insurance premiums if their company opts out of paying their share during these business shutdowns. There has already been repeated calls for Trump and the administration to reopen the ACA enrollment period for people who have been affected by a loss of insurance coverage due to the pandemic, with some calling for the open enrollment period to be available for anybody who wants to get coverage during the crisis. Personally, I think that this is a bad idea, in essence all it does is to trade one form of private driven healthcare for another. And there just happens to be a better way. There is going to have to be another round of massive economic stimulus for the ordinary consumer, and it’s going to have to be soon. Both sides already accept that, and both sides are already lobbing around ten digit numbers for the cost of the package, as well […]

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