But Now You Know

The search for truth in human action

Why Universal Medicare Isn’t an Option



At one time, those advocating a “public option” were trying to claim it was not a socialized health care proposal like Medicaid/Medicare.

Now they’re actually proposing that this massive socialized bureaucracy be extended to cover all Americans.

Surgeon, chained by the nanny state The obvious question is, with a system that requires the whole of the nation to suffer a massive tax burden in order to cover only 14% of the population, where are we going to get the huge amount of money necessary to cover 100%? Especially when that system is already underfunded, in danger of going broke in only a few years.

Right now, most Americans pay more to FICA than they pay in income taxes.

What happens when you increase it to cover SEVEN TIMES as many people?

Are YOU ready to pay 700% as much in taxes, to cover universal Medicare?

This socialized system only works because it involves the productive part of America paying out the nose to support a tiny fraction of the population. Making it universal would be, quite literally, saying “I know how to make a pyramid scheme work: Put EVERYONE at the top of the pyramid, at  the same time!”

Why Would We Want To, Anyway?

That is aside from how bad, how harmful, Medicare already is to America, even when it only covers one seventh of Americans:

  • Fraud and Theft: Medicare is already fraught with fraud…it is thought that between sixty and seventy two billion dollars are stolen from the taxpayers via Medicare fraud, each year. That’s $72,000,000,000 every year. Imagine how much the fraud would balloon if the government had to police seven times as many people. The lost money would be comparable to the recent Stimulus/Bailout spending, but it would never end.
  • Too Expensive and Inefficient: Medicare is ALREADY expected to run out of money by 2017, becoming bankrupt even with its current users and tax burden. How are we going to expand it 700%?
  • Abysmal quality: Consumer and doctor dissatisfaction with Medicare is only surpassed by the similarly government-mandated HMO system.
  • Driving Costs: The ballooning cost of health care is consistently charted as having begun in the late sixties, right after the creation of Medicare. This system strips away consumer controls of prices…if the government took over the buying of your meals, the price of food would similarly go through the roof.
  • Tax the Poor: The wealthiest segment of Americans is the oldest. Americans tend to gain more wealth as they age. Yet the poorest segment of Americans are forced to pay in full for FICA, already. In effect, the poorest are being taxed for the richest.


Next time someone suggests that we should simply extend Medicare to cover everyone, because it’s working so well, ask him where we’ll get the two billion people necessary to fund extending that this fraud-ridden, insolvent, price-ballooning system to the 86% of Americans who now fund it for the rest.

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February 18, 2010 Posted by | Economy, Health, liberty, Politics | , , , , , , , , , , , , , , , , | 4 Comments

What If Car Insurance Were Like Health Insurance?


Insurance is supposed to be something you hope to never, ever use.
Not even once.

That’s how, for example, car insurance works. If you’re careful and lucky, you’ll “waste” money on it your whole life, and never need to make a claim. You are just pooling a risk with everyone else, and only a few of you should need to cash it in, per year.

But imagine if we all had car “insurance” that covered routine things we expect to need, like oil changes and gasoline.

Since we, and the insurance company, know we will be paying for these things regularly; our insurance cost will go up by the full amount of what we’d have paid anyway, plus the extra overhead for their bureaucratic costs and profit.

You Pay Extra for “Free” Stuff

If you think gasoline is expensive now, wait until you see what it costs when it's free.

If you think gasoline is expensive now, wait until you see what it costs when it's free.

If your car insurance now costs $800/year, and you spend another $800/year on gas/oil, for a total of $1,600/year, the price of your insurance will probably go up to well over that. For example, with a mere 10% profit margin, plus another 10% in bureaucratic costs, the extra $800 would cost you $160 on top of itself.

So you’d pay $1,760 to have “full coverage”, instead of $1,600 to have normal insurance and buy your own gasoline and oil changes.

But, worse, since we’re not actually paying for each gallon and pint out of pocket, demand for gasoline and oil changes will go up, which will increase the price. It will increase it a lot.

Think of how much people changed behavior because gas prices were high in 2008. It dramatically cut demand. People bought more economical cars, moved closer to work, didn’t drive on distant vacations as often, et cetera. And this helped cut the cost of gas back in half, because the price is set by, in part, a combination of supply and demand.

With gasoline costing “nothing”, people would feel free to buy cars that get worse gas mileage. They would feel better about living farther from work. They could go on road trips as often and far as they pleased.

So the price of gasoline would skyrocket.

But since most people would have “full coverage” insurance, they wouldn’t even notice that.

What we all would notice is the price of car insurance going through the roof.

If car insurance covered normal and minor costs, its price would expand out of control

If car insurance covered normal and minor costs, its price would expand out of control

Let’s say the price of gasoline only doubles, back to its 2008 prices. Now people are using $1,600 in gasoline per year…except they’re also driving more. Let’s say only 25% more…that’s $2,000 in gasoline. Including the profit margin and bureaucratic cost, that means the price of “full coverage” goes from $1,760 per year to $3,200 per year.

But it doesn’t stop there…the insurance company doesn’t really have the same incentive, nor power, to hold down prices that consumers do.

Oh, pundits imagine they do, because they’re big companies and all that…but they lack the power of the actual consumer: They can’t make people stop driving and getting oil changes. So the oil and gas providers are able to start raising prices, as long as they can justify it…and when money’s involved, people can justify a lot. For example, now the gas stations and quick lube joints have to pay a whole second staff just to handle the “insurance” paperwork, in order to get paid for the gasoline and oil changes we buy.

So the price of gas and oil will go up even more than supply and demand would require…which means that $3,200/year for “full coverage” car insurance is only the start. If we add a mere 10% on that for the oil/gas companies’ insurance compliance staff, plus another 10% for padding they can get away with because the insurance company can’t make its customers stop going in response to high prices, then $3,840 per year.

The Uninsured Suffer

Of course, one group will feel the pinch of gasoline and oil change prices going up:

We who are smart enough not to waste our money on “full coverage”, but buy our gasoline and oil out of pocket, saving the twenty percent overhead on the insurance. But now we’re paying insanely high prices for these things, either way.

In fact, soon nobody without “full coverage” car insurance will feel like they can afford to drive, because gasoline and oil changes are so expensive.

Next step: Rationing of gasoline

Next step: Rationing of gasoline

Inevitably, this would all balloon into a:

Car Care Crisis

Media and Liberal politicians would be demanding that government insure all Americans who are not already covered, and that they “control car care costs”, which would be expanding to cripple the economy.

They would, surely, try to nationalize automotive care…they already hate that we drive so much, they say so all the time. Instead of trying specific, reasonable things, of course, they’d demand that we put all eggs in one basket with a single, gigantic, hurried bill passed into law, all or nothing.

This, of course, will end up making things worse, as such brute-force government interventions always do.

All because people were foolish enough to start buying “insurance” for predictable, regular needs, instead of only for catastrophes they hope will never happen anyway.

Health Insurance = Car Insurance

This is what is happening, now, in the health care industry.

We are paying up to $8,000 per year for a family of five, in order to get “full coverage” that pays for our normal checkups, our doctor’s visits for colds, the flu, emergency room visits for skinned knees and sprained ankles…and then we are paying for ALL of that minor, predictable stuff, plus profit and bureaucratic costs, and increased paperwork costs from health care providers, and padding of costs handed off to insurance companies…through skyrocketing health insurance prices.

Before government stepped in, health insurance was only for rare emergencies. It cost a tiny fraction of what it does today, even considering inflation. But then government took over half of health care spending with the socialized Medicare/Medicaid programs, and forced employers to offer “full coverage” health insurance, hiding the cost you pay by deducting it from what they would offer you in the first place.

The crisis this created is exactly what we should expect to happen. The problem is simply that we’re paying middleman, for no reason whatsoever, and getting exactly what we deserve.

September 10, 2009 Posted by | Economy, Family, Health, Politics | , , , , , , , , , , , , , , | 16 Comments

   

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