Tuesday, July 01, 2008

Dr. Bill Roy: "Dear Reader - Medicare, no Medicare, or Medicare for all?"

“Dear Reader: Medicare, no Medicare, or more Medicare?"
Dr. Bill Roy,
Lawyer, physician, congressman
(2nd Dist., Ks., ’70 – ’74)

I recently wrote approvingly about physicians identifying Medicare for all as one feasible way of financing and delivering universal health care in our country. Medicare is a single payer program financed in large part by tax receipts and administered by the federal government.

Believe it or not, some respondents called it socialized medicine or government medicine, with a negative connotation. Several offered the free market as a solution (not a free-market solution) for America’s health care dilemmas, reminding me of the New Yorker cartoon that showed an anxious individual confronting a clerk in a hospital emergency department.

She said, "Just wait. We’ll see if we can find a free market solution for your problem."

Of course, we have been waiting our lifetimes for a free market solution to the rapidly increasing costs and lack of insurance coverage that have characterized our health care "system." And things have only gotten worse.

Fortunately, for our senior citizens and disabled there is Medicare. But first let me state Medicare for all is not my first choice for a badly needed new health care system. However, Medicare works, a lesson confirmed by 43 years of experience.

Nearly all of us know someone who is, or has been, on Medicare. It is an entitlement program, not a welfare program that requires recipients to be impecunious to qualify. You only have to be among the 36.8 million who have reached the magic age, or, be among the 6.8 million Americans who are severely disabled.

There are many poor people on Medicare. A startling 48% of Medicare recipients have incomes below twice the federal poverty level ($12,201 per couple in 2006). And 29% of all beneficiaries have cognitive or mental impairment.

Medicare costs the proverbial arm and leg, $458 billion for 2008, which is 14% of federal outlays, third only to social security at 22% and military spending at 20%. It is, however, only 3% of the gross domestic product.

Medicare has multiple sources of funding. Primary funding is a 2.9% Medicare payroll tax levied on all income, not just the $102,000 currently subject to the 12.8 % social security tax. The pay roll tax provides 41% of total funding, but 38% still comes from federal general funds, which are most constructively thought of as money borrowed from the Asian tigers and OPEC nations.

The payroll tax pays 90% of hospital costs of $218.9 billion annually. General funds are used mostly for physician services (Part B) and the drug benefit (Part D), which are $210.6 billion and $50 billion respectively.

Nevertheless, Medicare is far from free to beneficiaries. They provide 12% of total federal expenditures, mostly by paying premiums for physician services (Part B) and the drug benefit, both optional services--no premiums paid, no benefits.

Beneficiaries also pay co-pays and deductibles. Many recipients buy private Medigap insurance policies to pay for those things Medicare does not pay for.

Jane and I spend nearly $100/month each for Part B premiums; about $250 per month for Part D premiums and drug co-pays; and $198/month each for BCBSKS Medigap insurance. We have no long term care insurance.

In sum, cost-sharing by Medicare recipients comes to $7-10 grand a year for a couple, a substantial burden for low income enrollees.

Fortunately, Medicaid, a federal-state welfare program that serves 59 million people and costs over $310 billion annually, is available for the poorest Medicare enrollees. For example, Medicaid pays 43% of total nursing home costs ($217 billion in ‘06) for folks that run out of money.

Which gets me back to you, dear reader. Medicare, no Medicare, or more Medicare?

The safety nets of Medicare and Medicaid, deny families wonderful opportunities to sit down at the kitchen table or gather around their computers and congenially divvy up dad’s last $100,000 medical bill. Rugged conservatives are denied joyful opportunities to give mom or dad health insurance or, say, a new hip for Christmas.

Government, socialized medicine even denies families the true life experiences of having depressed or even suicidal parents who want to die so they do not leave medical bills their kids cannot pay. Que sera, sera.

Dr. Roy may be reached at wirroy@aol.com

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