Article: Post Mortem on Healthcare Reform

Listening to President Obama and the Democrats in Congress talk about all of the transgressions of the health insurance companies, as these politicians campaigned for the Health Insurance Subsidy Act of 2010, a reasonable person would conclude that health insurance companies have forfeited their place in our healthcare system. However, that reasonable person would be wrong because President Obama and the Democrats in Congress are further solidifying the parasites in the health insurance industry as the foundation of our healthcare system. I do not exempt the Republicans from scorn (which they constantly earn and deserve), but the Health Insurance Subsidy Act of 2010 is the product of President Obama and the Democrats in Congress.

I also want to launch a pre-emptive strike directed at those partisans who will accuse me of being indifferent to the lives of approximately 45,000 people who die each year because they lack access to affordable health insurance. If saving these people were really the goal, Medicare-for-All would save many more lives than the Health Insurance Subsidy Act of 2010. People projecting the number of deaths, as a basis for supporting the Health Insurance Subsidy Act of 2010, bear responsibility for using the deaths of innocent people as a prop to extort subsidies for the parasites in the health insurance industry.

With regard to the talking points of the Democrats. the Health Insurance Subsidy Act of 2010 is not in the tradition of the original Social Security Act or the original Medicare legislation. If the establishment of Social Security had followed the model being used for "healthcare reform", social security taxes would have been routed to the financial services industry, and if Medicare had followed the model being used for "healthcare reform", Medicare taxes and Medicare general revenue appropriations would have been routed to the health insurance companies. Consider the level of support that is likely to exist among President Obama and the Democrats in Congress to make significant improvements in the Health Insurance Subsidy Act of 2010.

The health insurance companies have been jacking up insurance premiums in anticipation that "healthcare reform" legislation will be enacted, and the health insurance companies also understand how to circumvent any limits on their profits (e.g., 20 percent of $200 is more than 20 percent of $100). Despite government subsidies for health insurance premiums, health insurance premiums and out-of-pocket expenses will continue to crush people at the lower end of the income scale who do not qualify for Medicaid. Many people currently without health insurance may benefit from this misguided attempt at healthcare reform, but it is illogical to pay 20-25 percent of the costs (including both excessive administrative costs and profits) of healthcare as a subsidy for the unnecessary services of these parasites in the health insurance industry. Thus ended fiscal responsibility for either Democrats or Republicans.

Technically, payments for services covered under Part A (Medicare Hospital Insurance) and Part B (Supplementary Medical Insurance) of Medicare are administered via private health insurance companies working under contract to the Centers for Medicare and Medicaid Services, but these various contractors are working directly under the supervision of the Centers for Medicare and Medicaid Services, and these various contracts allow for small profit margins in comparison to the health insurance companies administering Part C and Part D of Medicare. The use of health insurance companies as a foundation for healthcare reform is part of a more comprehensive strategy to weaken and eventually eliminate Medicare. This strategy gained a foothold with the passage of legislation in 1997 that established an alternative to traditional Medicare coverage via private health insurance plans under "Part C of Medicare", also known as "Medicare Advantage Plans", and these "Medicare Advantage" plans are heavily subsidized by taxpayers.

Most of the charges by Republicans that the Democratic healthcare reform legislation will slash Medicare relates to the planned reduction of these taxpayer subsidies for Part C Medicare plans that compete with the standard fee-for-service program under Part B of Medicare. People will not be surprised to learn that the administrative costs (including profits for private insurance companies) for plans under Part C of Medicare substantially exceed the administrative costs for Part B of Medicare, and the per-person cost to the public for plans under Part C of Medicare substantially exceeds the per person cost to the public for Part B of Medicare. Although I disagree with the taxpayer subsidies that make Part C of Medicare competitive with Part B of Medicare, enactment of the "healthcare reform" legislation essentially will reduce one taxpayer subsidy to help pay for another larger taxpayer subsidy to private health insurance companies.

Part D of Medicare, the Medicare Prescription Drug Program which became effective 01/01/2006, also uses private insurance companies as the basis for service delivery. While I do not discount the value of these prescription-drug plans for Medicare beneficiaries (including my own parents), the use of private health insurance companies as the basis for service delivery has unnecessarily inflated the cost of Part D of Medicare to the public. The "healthcare reform" legislation will provide significant taxpayer subsidies to private health insurance companies, and reliance on this model for public programs further undermines the long-term prospects for Medicare. Most of those people who complain about the high cost of government never seem to mention the premium they pay to subsidize "capitalism".

I know that President Obama (and even his predecessor) instituted some new half-measures to combat fraud in the Medicare system, and I know that the "healthcare reform" legislation includes funds to prevent and detect fraud and waste in the Medicare and Medicaid programs, but one thing that President Obama and the Democrats in Congress could have done a year ago to build some trust with the public is to be much more aggressive in devoting resources to reduce the enormous amount of fraud and waste that exists in the Medicare and Medicaid programs. Contrary to popular stereotypes, most of the fraud in the Medicare and Medicaid programs is caused by providers of medical care, medical services, medical supplies and medical equipment (i.e., most of this fraud is perpetrated by our beloved small businesses), and most of this fraud could be reduced dramatically by devoting a relatively small additional amount of administrative costs to specific measures to combat fraud. Congress has often been hostile to such cost-saving measures because there is a significant segment in Congress that uses the fraud in the Medicare and Medicaid programs as a rationale to argue for the reduction and/or elimination of these programs. Of course Congress does not directly impede efforts to combat Medicare fraud and Medicaid fraud, but through budgetary constraints, Congress prevents the Department of Obstruction of Justice and other Federal agencies from devoting proper resources to prevent and detect such fraud.

President Obama's new Debt Commission will become the next Trojan Horse insinuated into the effort to undermine Social Security and Medicare. It is my advice that you should not hold your breath while waiting for President Obama and the Democrats in Congress to ride to the rescue.