Why you cannot have healthcare insurance (unless you are rich or a politician).

The June 12, 2019 issue of the Chicago Tribune contained an article explaining why the middle classes and the poor don’t need healthcare insurance.

Here are some excerpts and comments:

Medicare chief: ‘For all’ plan will cost more
By Lisa Schencker Chicago Tribune

The Tribune sat down with Seema Verma, head of the federal Centers for Medicare & Medicaid Services and an appointee of President Donald Trump.

Verma opposes Medicare for All, the idea of expanding Medicare to cover all Americans, and the administration said earlier this year it supports a Texas judge’s ruling that Obamacare is unconstitutional.

Just for clarity, Medicare for All and Obamacare are two separate issues that are related in only two ways:

• Both “Medicare for All” and “Obamacare” would provide healthcare insurance for the middle classes and the poor
• Trump and the Republican party, while opposing both plans, have not offered an alternative that would provide healthcare insurance to the non-rich.

Q: The doctors who support Medicare for All say it would allow doctors and hospitals to spend less money on administration because they wouldn’t be dealing with multiple insurance companies. What are your thoughts on that argument?

Virma: One of the things I hear a lot is we should go to Medicare for All because of the lower administrative costs.

The reality is we’re not spending enough on administration within Medicare. There’s a lot of bureaucracy that goes on with the Medicare program in terms of access to technology, protecting taxpayers against fraud and abuse and it’s because we haven’t made those investments in administering the program like you would see in the private sector.

The main issue with Medicare for All and having the government take over the entire program, is that we’re not going to see savings.

It’s actually going to cost more, which means taxpayers are going to pay more, and when they’re paying more, that’s going to lead to rationing of care and problems with access to care.

The above arguments all have to do with costs: “Administrative costs,” “protecting taxpayers,” “not going to see savings,” and “taxpayers are going to pay more.”

But all are based on the deception that federal taxpayers pay for federal spending. They don’t.

The U.S. federal government is unlike state and local governments in that the federal government uniquely is Monetarily Sovereign.

The federal government invented the U.S. dollar, created the very first dollars from thin air, continues to create dollars from thin air, and never can run short of dollars.

Even if all federal tax collections fell to $0, the U.S. federal government could continue spending unlimited amounts, forever.

Unlike state and local taxpayers’ dollars, that do help fund state and local government spending, federal taxpayer’s dollars are destroyed upon receipt.

Unlike state and local governments, which keep their dollars in private banks, the federal government does not store tax dollars for future use.

Instead, when paying for goods and services, the federal government uniquely creates brand new dollars, ad hoc.

(If anyone disagrees with the above statements, I invite you to tell me how much money the federal government has. Take all the time you need.) 

Q: According to some surveys, most Americans support a government-run health insurance system. How do you respond to that kind of public opinion?

A: When you dig a little bit deeper into those surveys and people understand that it means that they’re going to be stripped of their private coverage, that they’re not going to be able to make choices, that innovation is going to be impacted, that they may have longer wait times — when you put all those pieces together, Americans are not supportive of that.

This all is absolutely false.

Medicare does not “strip people of their private coverage,” nor would Medicare for All. No one is required to accept Medicare, and Medicare for All would require no one to give up their private health care insurance.

However, Medicare users opt for the government’s Medicare plans because they are cheaper and more comprehensive than private insurance plans. Ask any Medicare user whether he wishes he still was paying for his private plan.

Virma doesn’t explain what “choices” would be taken away, but anyone who chooses not to accept Medicare can make that choice, and buy private health care insurance.

Medicare coverages are vast, and generally provide as much or more medical choices, as do private healthcare insurance policies.

Because a federal program does not need to worry about profits, Medicare for All has a far greater capability to pay for the most expensive medical treatments, as well as long term care.

As for “innovation,” Medicare simply is a payment method. Neither Medicare nor private insurance impact medical innovation, with the exception of coverages, and here Medicare has a huge advantage: Medicare is not guided by the need to make a profit.

The so-called “longer wait times” merely refer to the fact that more people, not just the rich, would be able to pay for healthcare.

With Medicare for All, more people would be able to visit doctors for periodic checkups. This, of course, is a good thing.

On the other side, fewer poor people would use the emergency room as their primary care source, which would free up that function for true emergencies.

As Medicare, and almost every other function in a capitalist society demonstrates, when demand goes up, supply goes up.

Medicare for All would result in more hospitals, doctors, etc. in more convenient locations.

Q: For a lot of people, the bottom line is that seniors look forward to being on Medicare. People are eager to turn 65 so they can be on Medicare and no longer have to have private insurance.

If seniors like it so much, why can’t it work for everyone?

Virma: We need to have a solution that provides affordable health care coverage and that all Americans have access to that.

But the Medicare program was uniquely designed for seniors and those seniors have paid into the program their entire lives, and we need to make sure that program is protected and preserved for those beneficiaries, and address access to affordable coverage for other Americans.

Virma, a Trump appointee, claims to want “a solution that provides affordable health care coverage and that all Americans have access to that” — in short, Medicare for All.

Sadly, Virma’s party has done everything in its power to cut and eliminate those very programs: Medicare, Medicaid and Obamacare.

In essence, the Republicans say,  “I want everyone to be healthy, so let’s eliminate their healthcare.”

Salaried people (though not millions of others) have paid FICA taxes, but as we explained earlier, federal taxes do not fund federal spending (and in fact, only Medicare Part A is claimed to be funded by FICA).

Q: When it comes to the Affordable Care Act, a lot of people are unhappy with the way prices for health insurance have increased.

But they’re happy about the rules barring discrimination based on preexisting conditions and the disappearance of caps on how much insurers will pay for coverage.

There’s a feeling among some people that regulation is needed, that competition among insurers alone is not going to result in the best outcomes for people.

Virma: This administration supports protections for people with preexisting conditions and we understand there is some regulation that works well.

I think the issue is government overreach and going too far. While the (Affordable Care Act) has provided protection that we support, it has also driven up health insurance premiums.

This administration has given lip service to “protections for people with preexisting conditions,” but in reality, it has tried to eliminate the programs that provide those protections.

They call such protections, “government overreach” which is their description of any spending that does not benefit the rich.

Q: Should Americans continue to buy insurance through the Affordable Care Act exchange when the Trump administration has made it clear that it wants the law to disappear?

Virma: The law is not working. What we want to do is provide more affordable options for individuals.

Translation: “Not working” means, “Despite all our efforts to make the plan unworkable, it still is providing valuable benefits to low- and middle-income families and their children. Please ignore the fact that we have done nothing to ‘provide more affordable options for individuals.’”

Q: Would you encourage people to still buy on the exchange at this point?

Virma: For people that are eligible, we want to make sure they have as many options as possible, so if that works for them, then that’s certainly something that they might want to pursue.

Translation: We’ve tried to destroy all options for the non-rich, but we failed. Blame Senator McCain for saving Obamacare. So OK, go with what you have.

Q: When it comes to drug prices, insurers, pharmacy benefit managers and pharmaceutical companies all point the finger at one another.

Does the Trump administration believe in primarily directing its efforts toward the drug companies?
Virma: As we are talking about efforts to make health care more affordable, one of the things we’re looking at is drug pricing because that is one of the fastest growing areas of health care spending in the United States.

That being said, I do think there are fingers to be pointed in a lot of different directions. Some of the concerns we have with pharmaceutical companies is that Americans are not getting the best deals.

We also have a lot of concerns with the rebates that are going on in terms of (pharmacy benefit managers) and the rebates that are kind of behind the scenes deals that don’t result in seniors getting the best price possible.

One of the things we recently did was require pharmaceutical companies to actually put the prices of their drugs on TV ads. We’re tackling drug pricing from a lot of different angles.

“We’re tackling drug pricing from a lot of different angles.”

Translation: “We’ve done virtually nothing about drug prices, because drug companies’s profits go to our rich constituents. And sure, Medicare for All would pay for drugs, which would eliminate the cost issue, but we don’t want to mention that.”

Bottom line: Our Monetarily Sovereign federal government easily could fund a comprehensive, Medicare for All insurance plan that pays for doctors, nurses, hospitals, drugs, equipment, rehabilitation, and long-term care — with no deductions or tax collections.

But that plan would benefit the lower and middle-income people the most, which is exactly what the Republicans do not want.

So to prevent it, the Republicans say it’s “socialism” (it isn’t*), “unaffordable” (it isn’t*),  “unworkable (it isn’t),” “government overreach” (it isn’t*), and it “strips away choices and takes away private insurance” (it doesn’t*).

• “Socialism” is government ownership and control over production, distribution, land, etc. Medicare for All is just an insurance policy funded by the federal government.
• Nothing is “unaffordable” for our Monetarily Sovereign federal government.
• Medicare for All is merely an expansion of Medicare, which already has proved to be “workable.”
• Rather than “overreach,” it is exactly what a government should be doing: Insuring the safety, health and wellbeing of the citizenry.
• Medicare for all, rather than stripping away choices, would provide more choices, as it would make more medical procedures financially available to Americans.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell

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The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY