Medicare for All

 

 

One of the planks in the Democratic Socialist platform is Medicare for All. Senator Bernie Sanders of Vermont and other leading Democratic Socialists never fail to include it in their demands.The influence of the DSA is growing within the Progressive wing of the Democratic party, and it looks like Medicare for All will be a big issue in the upcoming mid-term elections.

 

However, we already have Medicare for all. Most of us are enrolled in Medicare in the same way we are enrolled in Social Security. Anyone with taxable income must contribute to Medicare in the same way they contribute to Social Security. All employees must contribute 1.45% of each paycheck to their Medicare account. Employers are required to match that contribution so that the total amount comes to 2.9% of pay. For most workers the Medicare tax goes largely unnoticed since it is a payroll deduction.

 

The tax is more visible to self-employed individuals since they must pay the whole 2.9% themselves and actually cut a check for the amount on a quarterly basis.

 

Unlike the Social Security tax which only applies to the first $185,000 of income, there is no limit on the amount of income subject to the Medicare tax. Let’s take a look at some examples.

 

Someone working at the minimum wage of $15.00 per hour for 2000 hours a year would have an annual income of $30,000. To make it easy let’s round off the Medicare tax rate of 2.9% to 3%. The worker’s Medicare tax would be $900 a year. We can call it the annual premium for Medicare insurance which will begin to pay off at age 65.

 

In our next example, the worker’s annual income is $200,000. That number is significant because over that amount, the employer is no longer required to match, and the employee must pay the whole 2.9%. In fact, on income over $200,000, there is a surcharge of 1% bringing the total to 3.9%. To keep it simple for now, this worker’s Medicare tax would be 3% of $200,000 or about $6,000 per year. In other words, his Medicare insurance premium is $6000 per year for the same plan that costs the minimum wage employee $900 per year. 

 

Finally, let’s look at really high earners like movie and rock stars, professional athletes, and even CEOs who have incomes of $20 Million per year. Since there is no limit on the amount of income subject to the Medicare tax, and since there is a 1% surcharge, their effective tax rate of 4% means that their Medicare tax would be 4% of $20,000,000 or $800,000 per year. That's right, $800,000! Remember, even though their Medicare insurance premium is huge, they still get the same coverage as anyone else. Actually, these wealthy people don't even need Medicare. It’s really amazing that Democratic Socialists want to eliminate the billionaires who fund Medicare.

 

Of course, people with little or no taxable income would currently be eligible for Medicaid but Progressives and Democratic Socialists really want free Medicare for all at any age. But do they?

 

Does Medicare for All mean that Senator Sanders and other politicians would give up their current gold-plated government plans for Medicare or Medicaid? I don’t think so. When Obamacare was passed, members of Congress were supposed to join that plan and give up their Federal medical insurance but that never happened. I doubt that any federal, state, or municipal employee would want to give up their current medical insurance for Medicare.

 

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Quote of the day: All animals are equal, but some are more equal than others. George Orwell, Animal Farm.

 

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Government Shutdown

 

The current government shutdown is in its fourth week. What is the issue? It is not Medicaid, or SNAP (food stamps). These are covered in the Continuing Resolution (CR) passed by the House of Representatives. The House resolution is called a "clean"one because it does not change anything. All current programs would be continued. The Democrat minority in the Senate, however, has used the filibuster to block the CR and demand the continuation of Federal subsidies for participants in the Affordable Care Act (Obamacare). Apparently, Obamacare enrollment has never reached expectations, while claims have skyrocketed to the extent that large premium increases are expected next year.  

 One of the first things I learned when I went into the insurance business over 50 years ago was that insurance was simply the prepayment of claims. It is paying in advance to cover some future bill or expense. It does not matter if it is life insurance, automobile insurance, or medical insurance. The same basic principle must apply. A policyholder pays monthly or annual premiums and these premiums are pooled with others to pay eventual claims. 

 

Medical insurance is no different. It only had its origins in the 1930s during the Great Depression. At that time hospitals and physicians were finding it increasingly difficult to collect from their patients, many of whom were out of work. As a result we had the birth of the “Blues.” Both Blue Cross and Blue Shield were products of the Depression. In short, people would enroll in these plans and pay a monthly or quarterly premium that over time would build up enough of a reserve to cover their future claims. This idea seemed to benefit everyone. Doctors and other health care providers would no longer have to go after their patients like collection agencies; and the patients would not have to come up with a large amount of cash to handle large, unexpected medical bills. 

 

However, to avoid excessive or frivolous claims that raise the cost for everyone, most medical insurance policies included deductibles or co-insurance to reduce or eliminate small claims. This was right out of Insurance 101 since actuaries were well aware that the most cost effective strategy was to make the patient bear part of the cost out of pocket.

 

However, the use of medical insurance to cover future health care costs only took off after World War II. The war had finally taken the country out of the Depression and the economy was booming. In a major change the Federal Government allowed corporations to purchase group medical insurance plans for their employees. Employers were not required to provide health insurance but the government altered the tax code to provide a great incentive. 

 

Unlike other forms of compensation the cost of the medical insurance would not be considered taxable income to the employee. This was important especially to high salaried employees at a time when the highest tax rate was 70%. In other words, employees covered under such a group insurance plan could now have most of their medical expenses paid with tax-free income. It was a no-brainer. Instead of giving all employees a taxable salary increase, the employer could give them a tax-free benefit that would cover future health related costs.

 

The employer sponsored plans were incredibly attractive to all concerned and sparked a veritable revolution in health care in this country. Employers could deduct the cost of their plans as an ordinary business expense while employees could rely on their pre-tax medical insurance plan to cover major medical expenses. Since these were group insurance plans all employees had to be covered even if they had pre-existing medical conditions. Increasingly these group insurance plans came to dominate the market.

Nevertheless, the basic principle of insurance still governed these group plans. They all involved a pre-payment of claims most often through automatic payroll deductions.

 

This system of corporate sponsored insurance worked remarkably well for the great majority of Americans for many years. There were obvious problems, however, that needed to be fixed. People would lose their coverage when they lost or changed their jobs. Self-employed people did not ordinarily have access to these plans. Unemployed workers would eventually lose their coverage. People with pre-existing medical problems would find it almost impossible to get coverage on their own.

 

Attempts had been made to deal with these problems but critics of the system still insisted that over 30 million people were without medical insurance. Even if that number was accurate it would be wrong to say that all those people lacked access to medical care. One of the problems with the system was that so many people refused to purchase medical insurance and just went to the local hospital ER for even ordinary care.

 

Instead of trying to fix the problems in the old system, proponents of the Affordable Care Act sought to overhaul the entire health care system in this country. Now instead of getting a tax break as an incentive for providing employees with medical insurance, employers would be forced to provide such insurance or pay a penalty. Even though the Obama administration had arbitrarily extended the corporate mandate for a year, some employers still chose to drop their plans.

 

More importantly, at the time the Affordable Care Act was passed in 2014, President Obama indicated that it would not be so affordable, and that Federal subsidies would be needed for a couple of years to help participants pay their premiums. As it turned out, the subsidies did not go away. Because of these subsidies many enrollees in Obamacare did not have to pay the full premium for their medical insurance. No matter what you call it, it was no longer insurance but welfare.

Even with subsidies it would appear that most of the un-insured did not find the plans attractive, or were not able to navigate the red tape necessary to enroll. The expected number of plan participants never materialized.   

 

When Obamacare was passed the Federal government was over 17 Trillion dollars in debt. Now the debt is over $37 Trillion. How is the government going to pay these subsidies?  Will it just print more money and add to inflation, or will it have to raise the taxes on everyone. It is a problem that deserves careful study and cooperation, not drastic measures like shutting down the government, and shutting down the benefits of the needy. 

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A Freak Accident

 Freak Accident

 

 

By definition a Bystander is one who stands by and just watches things transpire, but on Super Bowl Sunday, a freak accident made me a participant. Around 1:00 in the afternoon, I went into my bedroom to take off my slippers and put on my sneakers so that my wife could drive me to a Covid testing center in preparation for a heart catherization this Thursday. As I always do, I sat down in an old wooden chair that I had used for years to put on my shoes and socks. *

Accident Scene

 

However, this time the chair collapsed beneath me and I crashed to the floor. I was apparently unhurt but then I noticed blood flowing down my head, On the way down, I had banged the back of my head on a nearby windowsill. So there I was on the floor profusely bleeding and, like most 83-year-old men, unable to get up. I yelled repeatedly for my wife who was at the opposite end of our house on the phone with our daughter Anne in California. While waiting for her to respond, I got my handkerchief out and placed in on my head, but it did little to staunch the flow of blood which dripped on the floor and carpet.

 

Finally, she arrived and sprang into action. Linda is a former nurse and quickly got a towel and put pressure on the wound. Then, she helped my get up and we walked into the kitchen where she continued to apply pressure. In the meantime, Anne, herself a former nurse, had called our daughter Kate who lived nearby, and she drove right over. When she saw the bleeding, she suggested calling 911. My wife, and Anne, who was on the phone with Kate agreed.

 

In no time at all the EMT crew arrived, and quickly dressed the wound but insisted that I go to the emergency room of a nearby hospital, especially since I was on a blood thinner. It is hard to express how caring, competent, and professional these men were. They got me into an ambulance, and continued to work. Carlos asked constant questions not just for information, but I guess to test my mental condition. Fortunately, I had no headache or dizziness. At the same time, he took my blood pressure which was very high, and inserted an IV to save time at the hospital.

 

At the ER the people were equally competent. They wheeled me into and room with no delay or red tape. It seemed only a minute before a doctor walked in, introduced himself, and proceeded to look at the wound. It turned out to be an artery that was bleeding, and without hesitation he put four staples into my head, and the bleeding stopped. A miracle! Who was it who came up with that idea? The rest seemed even easier.

 The doctor recommended a Tetanus shot,  and a CAT SCAN to be sure there was no internal bleeding. That kept me there for a couple of hours but Linda, Kate, and another daughter, Jane, came over to keep me company. The CAT SCAN results were negative and I was free to go home. Jane and her husband Greg drove us home where we found that Kate had cleaned up the mess beautifully. All the while, Anne had directed everything from California. 

 

I highly recommend that young men marry nurses, and have daughters. 

 

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*The chair was gifted to us many years ago by a beloved neighbor as a momento of her mother. It must have been 100 years old but I loved it because it was not only comfortable but somewhat low so that I could reach my feet. I had noticed that it had been getting a little creaky but never bothered to check it out.

Hearing Dysfunction

                                         

As far as I know, Medicare does not pay for hearing aids, and if Medicare doesn’t pay then Medicare Supplements or Medicare Advantage plans will not pay. My Medicare Advantage plan will only pay $50 toward an annual hearing exam. For that matter I do not believe that any of the insurance plans approved by the Government under the Affordable Care Act (Obamacare) will pay for hearing aids for the many who suffer from aural dysfunction.

A recent visit to an audiologist indicated that at age 75, I have suffered some hearing loss. My wife has been warning me of this for some time and likes to make fun of my many bloopers. Actually, in the audiologist’s waiting room a woman sitting next to me asked the receptionist, “Where are the cats?” I looked around and wondered if the doctor had cats that he let walk around the office. I finally asked the woman about the cats, and she replied that she had asked about her “cab” that was late in picking her up.

So, it was no surprise that the exam indicated some hearing loss, and that a hearing aid was recommended. The audiologist even offered a free two or three day trial to see if I liked them. It reminded me of the way in which pet shops would allow you to take a puppy or kitten home to see if you would like it. I guess most people decide that they like the hearing improvement.

Midway through my trial I’m not sure. These modern hearing aids are incredibly sophisticated and introduce you to a world of strange, unfamiliar sounds. The first day was really incredible. I never knew the rustling of my garments made so much noise, or that my footsteps were so loud. I never realized how deafening our old grandfather’s clock was, or how noisy it was flushing the toilet. Outside, I had never heard the neighbor’s kids screaming before.

Most incredible was the sound of my own voice. To me, I sounded like Darth Vader inside his helmut. It was like speaking through an amplifier with a slight delay. I do admit that by the second day it didn’t sound so bad.

Nevertheless, I’m not sure that I’ll go for the improvement in hearing. I am far from deaf and I can still have normal conversations with my wife despite the occasional bloopers. But I have come to realize that I sort of like my quiet world where lawn mowers or passing cars don’t sound so loud.

There is also the question of cost and that gets me back to my medical insurance. The tiny hearing devices will cost about $4000, and I believe that is in the mid range. Friends tell me they have paid almost twice that, and I’m sure there are some older models that are cheaper. The $4000 is more than the cost of my complicated and delicate eye surgery of a few years ago that was covered by Medicare.

It seems to me that a large bill like this is precisely what medical insurance is for. I see that my Medicare Advantage plan will pay for drugs like Viagra for those men who suffer from so-called erectile dysfunction. The ads are on TV every day. Why is erectile dysfunction more serious than aural dysfunction?

In the debate over the Affordable Care Act, President Obama insisted that his plan would rid the nation of sub-par plans. As far as I can tell, the only thing sub-par about these existing plans was that they did not cover the cost of contraceptives.  

Some politicians have claimed that the cost for a year’s supply of birth control pills can be $600. That is surely the high end since a web search indicated that birth control pills could cost from $15 to $50 per month. The same site indicated that organizations like Planned Parenthood sell them for much less. A letter writer to a newspaper argued that a month’s supply can be purchased at Walmart for $4.00.

Advocates argue that the pills are a necessary women’s health item. But toothpaste is also a necessary health item and no one suggests that it be covered by insurance. We expect everyone to purchase their own from the huge array that can be found on the shelves.

If I do decide on the hearing aids, I will pay for them myself even though they are a high cost item. I will make the decision on whether the potential benefit justifies the cost. I realize that there are a lot of people, especially seniors, in this country who have more serious hearing loss than me, and who cannot afford hearing aids.

Why were these people forced to pay for Viagra and contraceptives? How many, if given the option might have elected coverage that would restore their hearing? It’s too bad that there is no such thing as “aural” sex, for then hearing loss might be regarded as a more serious matter.

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