Liberty and Tyranny (11 page)

Today Medicare covers most people age sixty-five and older, some people under sixty-five with disabilities, and people with end-stage renal disease. It covers most inpatient hospital care, some inpatient skilled nursing home care, some home health care, hospice care, doctors’ services, outpatient hospital care, outpatient physical and speech therapy, ambulance services, some medical equipment and supplies, and most prescription drugs.
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Because Medicare pays providers directly, Medicare users have little incentive to behave cost-efficiently. As in Social Security, virtually everyone “contributes” to the system through a payroll tax, regardless of income level. Medicare is also “funded” through income taxes and relatively small deductible payments. Again, there is no relationship between taxes paid and benefits received and there are no trust funds set aside for future payments.

Nineteen million individuals initially enrolled in Medicare. As of 2006, it covered 43 million people—about 36 million elderly and 7 million disabled.
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In 2030, Medicare is expected to cover 79 million people and consume 11 percent of the nation’s economy, up from 3 percent.
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Medicare is running up bigger IOUs, and more quickly, than even Social Security. In 2008, the Medicare trustees issued a funding warning for the second year in a row, calling attention to the extreme cost pressures in the program resulting from an aging population and escalating costs, and to the excessive use of general tax revenue to pay benefits, and urging Congress to do something about it.
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“The longer action is delayed, the greater the required adjustments will be, the larger the burden on future generations, and the more severe the detrimental economic impact on our nation.”
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The trustees also estimated that Medicare’s un-funded obligation is more than $36 trillion.
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Also in 1965, Johnson and the Democratic Congress passed the Medicaid bill. Of course, it, too, was established under the Social Security Act. It is a federal-state program that was originally limited to paying most of the medical bills of low-income people. At first Medicaid covered 4 million individuals. It has since evolved into much more, covering the elderly, people with disabilities, children, and pregnant women—about 51 million people.
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In 2006, the federal taxpayer paid 57 percent of Medicaid costs. The state taxpayer paid most of the rest.
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Still, Medicaid consumes on average more than 21 percent of total state spending, making it the largest state expenditure.
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Medicare and Medicaid together cover 86 million people (8 million are covered under both programs) or about a quarter of the nation’s entire population.
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Social Security, Medicare, and Medicaid are built on a family of frauds—the fraudulent concealment of material facts, the fraudulent representation of material facts, and the fraudulent conversion of one’s money for another’s use. They are a complex mix of taxes, benefits, obligations, and rights from which no individual can make much sense and about which the government sows disinformation and confusion. The “working poor” subsidize “the wealthy,” “the wealthy” subsidize “the working poor,” “the middle class” subsidizes itself as well as “the working poor” and “the wealthy,” and future generations are left paying off the crushing debt created by all of it, since the government spends far more than it raises. Yet so virtuous are the programs said to be—pensions for the elderly, compensation for the unemployed, medicine for the sick, and assistance for the disabled—few dare ring the alarm of looming economic catastrophe that threatens to destabilize the civil society.

The Brookings Institution’s Martha Derthick wrote more than twenty-five years ago about Social Security, and what she said applies to Medicare and Medicaid as well: “Economic analysts who exposed what they regarded as the myth of social security learned to expect a swift and vigorous response from program executives, especially if critics were liberals and could therefore be regarded…as ‘natural friends’ of the system. Then they would be charged with heresy and made to feel that they were endangering the system.” Jodie Allen, an economist who wrote a critical article for the
Washington Post
in 1976 (“Social Security: The Largest Welfare Program”), described the response:

A religion indeed. So much for the Statist’s supposed reliance on reason, empiricism, and knowledge.

In 2008, the Congressional Budget Office (CBO) projected that if Social Security, Medicare, and Medicaid go unchanged, by 2082 “the tax rate for the lowest tax bracket would increase from 10 percent to 25 percent; the tax rate on incomes in the current 25 percent bracket would have to be increased to 63 percent; and the tax rate of the highest bracket would have to be raised from 35 percent to 88 percent. The top corporate income tax rate would also increase from 35 percent to 88 percent. Such tax rates would significantly reduce economic activity and would create serious problems with tax avoidance and tax evasion. Revenues will fall significantly short of the amount needed to finance the growth of spending; therefore, tax rates at such levels would probably not be economically feasible.”
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Despite dire warnings from the CBO, from the former comptroller general of the United States, and from the various trustees that these programs are unsustainable and demand urgent attention, the pillaging of future generations not only continues, but the Statist proposes much more of it in the form of government-run “national health care” or “universal health care.” As with Roosevelt and Johnson before him, for today’s Statist this is about maximizing power.

It is said by the proponents of government-run health care that 47 million people go without health care in the United States. For example, during the so-called Cover the Uninsured Week event in 2008, Democratic Speaker of the House Nancy Pelosi issued a statement declaring that this is the “time to reaf-firm our commitment to access to quality, affordable health care for every American, including the 47 million who live in fear of even a minor illness because they lack health insurance…. In the wealthiest nation on earth, it is scandalous that a single working American or a young child must face life without the economic security of health care coverage.”
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This is more deceit.

In 2006, the Census Bureau reported that there were 46.6 million people without health insurance. About 9.5 million were not United States citizens. Another 17 million lived in households with incomes exceeding $50,000 a year and could, presumably, purchase their own health care coverage.
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Eighteen million of the 46.6 million uninsured were between the ages of eighteen and thirty-four, most of whom were in good health and not necessarily in need of health-care coverage or chose not to purchase it.
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Moreover, only 30 percent of the nonelderly population who became uninsured in a given year remained uninsured for more than twelve months. Almost 50 percent regained their health coverage within four months.
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The 47 million “uninsured” figure used by Pelosi and others is widely inaccurate.

And why is it accepted as fact when Pelosi and other Statists assert that the government can deliver health-care services more efficiently and to all who need them? The British example provides compelling evidence that government-run health care is disastrous, if not deadly, for too many.

In Great Britain, in order to limit waiting times in emergency rooms, the National Health Service has mandated that all patients admitted to a hospital be treated within four hours.
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However, the inefficiencies of a government-run system cannot be cured by the passage of a law. Consequently, instead of sitting for hours in the hospital waiting room, thousands of patients are forced to wait in ambulances parked outside emergency rooms.
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Having patients wait in ambulances allows hospitals to use a loophole in delaying care. If the patient is waiting in an ambulance, he cannot be admitted to the hospital and, therefore, does not need to be treated within the four-hour legal time period.

The waiting times for surgeries is a systemic disaster. Patients wait between one and two years to receive hip and knee replacement surgeries.
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Across specialties, one in seven patients waits more than a year for treatment.
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Children must travel to the United States to receive certain cancer treatments that are unavailable under Britain’s health system.
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Like physicians, dentists are employed by the government and required to meet annual treatment quotas. Once the quotas are filled, the dentists are not paid to perform additional work. Recently, dentists in parts of Britain turned away patients and went on vacation because they had met their annual quotas.
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There are too few public dentists for too many people—even though less than half of adults are registered with public dentists. Those who manage to see a dentist are often given cursory treatment. It is not uncommon for a dentist to spend five minutes on a cleaning. As a result, many Britons are forced to seek dental care abroad. A preferred destination is Hungary.
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A recent survey in Britain indicates that as many as one in three family and hospital doctors believes that elderly patients should not be given free treatment if it is unlikely to help them over the long term. Half of the physicians believe that smokers should be denied bypass surgery and a quarter believe the obese should not be eligible for hip replacement surgery.
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During her 2008 campaign for the Democratic nomination for president, then-senator Hillary Clinton repeatedly told a shocking tale of a pregnant woman who was about to give birth. Feeling sick, this woman went to her local hospital but was denied care because she lacked health insurance and could not pay a hundred dollars for treatment. Shortly thereafter, the woman was rushed by ambulance to the same hospital, where her baby was stillborn. Several weeks later, the woman died from complications.

A tragic tale? Indeed. But the story was false. The woman was not turned away from the hospital. She had health insurance. She had received obstetrics care from doctors affiliated with the hospital.
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It appears that in her search for an example of the heartlessness of the private health-care system, Clinton came up short. But it is not all that difficult to find such examples respecting public health care.

Take Barbara Wagner, who was diagnosed with a recurrence of lung cancer. Her doctors recommended a specific drug to help prolong and improve the quality of her life. However, Barbara is a resident of Oregon and, therefore, part of the state-run Oregon Health Plan. The state refused Barbara’s request for the drug, since it does not cover drugs that are meant to prolong the life of individuals with advanced cancer. After all, when the Oregon Health Plan was established in 1994 it “was expressly intended to ration health care.” But Oregon also has legalized assisted suicide, and in an unsigned letter from the state, Barbara was informed that the health plan would pay to cover the costs of a doctor to help her kill herself.
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Barbara was not ready to have herself killed. However, it seemed she had reached a dead end—until the pharmaceutical company that invented the drug learned of her plight and stepped in to provide Barbara with the medicine free of charge.
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Unlike private care, where the difficult, mistaken, or even bad decisions or policies of a single insurance company, hospital, or doctor are usually limited in their societal impact, such governmental decisions and policies have a wide effect on the health-care industry, medical profession, and population of patients. Moreover, the continued centralization of health care decision making ensures further rationing by government fiat with fewer avenues of escape by needy individuals who are denied critical health services. For example, because Medicare and Medicaid, along with other government-run health programs, make the federal government the biggest single purchaser of medicines and medical services, it has an enormous influence on the drugs, medical devices, therapies, and treatment modalities that are available to Americans. It achieves this through formularies: the lists of approved drugs that these programs will pay for. Therefore, those which the government will not approve for payment will generally either not make it to the market or not stay on the market for long, significantly influencing the direction of research and development. The government’s payment schemes also affect the nature and quality of doctor and hospital care throughout the marketplace.

The Statist argues that millions of people benefit from these government-run “insurance” programs. Trillions of dollars in government expenditures over the years should result in benefits, particularly for those who receive far more in return than they “contributed” to the system. However, tens of millions more people benefit from private health-care coverage and receive the best medical attention on the face of the earth. Even the government-run programs benefit from the medical advances the private sector is still able to produce; without those advances, the government would have little to ration. And the private sector does not forcibly impoverish future generations with a colossal debt incurred on behalf of current beneficiaries.