Medicare Advantage analysis

It's time for a balanced conversation about Medicare Advantage spending

When a person becomes eligible for Medicare, he or she has two main choices. 

1. Original or traditional Medicare with or without supplemental coverage via a prescription drug policy, Medicaid, purchasing a Medicare supplement policy (sometimes called Medigap), or from an employer. The model is fee-for-service.  Medicare pays providers for claims for medical services.

2. Medicare Advantage. The insured person chooses one insurer (not Medicare) among many and various plans the insurer offers.  One policy from a private insurer, which pays providers. The Centers for Medicare & Medicaid Services pays each private insurer on a per capita basis, the rates varying geographically. The model is managed care or HMO or PPO. 

In either case, he or she pays the Medicare Part B premium. 

The author of this article favors Medicare Advantage over original Medicare with or without supplemental coverage. She believes it is more cost effective. I don't have the expertise to opine on the thoroughness of her case, but it seems she presents a good and unbiased case for favoring Medicare Advantage.

P.S. Sellers of Medicare Advantage policies often advertise "$0 premium." While this is true regarding the amount of premium the insured person pays to the insurer, it is at least misleading since the insured person must pay the Medicare Part B premium. Rarely does "$0 premium" advertising include this caveat, or it is in fine print (which on tv can appear too briefly to read).

Coronavirus - death of a campaign

Bernie Sanders suspended his presidential campaign. A New York Post article attributes the death of Sanders' campaign to COVID-19. Bernie Sanders’ socialist fantasies lost their appeal when coronavirus hit. The news media's attention is monopolized by COVID-19. It has pushed aside the huge amount of attention the news media previously gave to Sanders and his campaign. The following copies liberally from the article.

Socialism and Medicare for All, the subjects Sanders has hammered home with metronomic monotony for many years don’t matter right now. Sanders is a politician with an ever handy villain. But the coronavirus "can’t be blamed for its greed or taxed [or regulated by government] into submission." It's useless to yell at the virus, and yelling at things is Sanders’ political métier.

Sanders prefers "to traffic in fantasies rather than provide realistic and workable solutions to glaring and inescapable realities."

"Who among us hasn’t noodled on what it would mean to win the lottery, to consider what you would do to fix things if you had unlimited money and power and were unconstrained by tradition or precedent or reality?"

"That is the seduction of socialism — it monopolizes resources and power and then distributes the goodies. But ­resources don’t work like that; if you seize them and centralize them, you pull them from their roots, and they begin to die."

'Whatever the world is going to look like once this [pandemic] is over, it won’t be a world that will have time for the ludicrous [ ] delusions of Bernie Sanders."

It is often said that Bernie Sanders' greatest support comes from young people. They aren't swayed by the common arguments against socialism or the history of socialism when put into practice. Why do they support Sanders, or more accurately, socialism? An audio on this page by Professor Stephen Hicks tries to answer this question. Starting at about 17 minutes Professor Hicks describes several mindsets he has found among young people who consider themselves socialists and the values on which they base their support of socialism. He calls these positions anti-cronyist, altruistic, central-planning, free stuff, communalist, welfare state, environmentalist, and emotionalist. His goal is only to explain, without criticism.

In an earlier audio Professor Hicks described socialism in theory or put into political practice by eight historical people. Their ideas of socialism are very different from those of modern young people.

Coronavirus - Medicare for All #3

The publication Current Affairs is also using the pandemic to advocate socialism, more specifically Medicare for All. The title of this article proclaims that our (the USA’s) for-profit healthcare system is failing us.

Firstly, it’s absurd to call the USA’s healthcare system as only for-profit. Government spending is about half of total spending on healthcare. There is also a lot of not-for-profit spending beyond that. Employer spending on health insurance for its employees is a big cost with no financial profit in it. Only 26% of hospitals are for-profit; 74% are nonprofit or public.

The author proclaims “Medicare for All would have solved all these problems.” This is merely a product of his wishful imagination and no reality check. He ignores the fact that the USA already has Medicare-for-all-over-age-65 plus Medicaid. He proclaims it despite the tragic result of Medicare for All in Italy and Spain. His only mention of either country is to smear detractors of Medicare for All. “But then, of course, as detractors point out, there’s Italy—which despite government health insurance found itself battling, for a time, the most serious COVID-19 outbreak in the world. Until, of course, we passed them.”

Duh! Yes, with about 5.5 times Italy’s population, the latest numbers show the USA has passed Italy in the number of cases. However, the USA has not passed Italy in the number of deaths nor the ratios deaths/cases and cases/population. Italy leads the world in deaths/cases with about 12.5%. Its neighbor Switzerland, with more cases/population than Italy and nothing like Medicare for any of its population, has only 3.6%. The USA ratio is even less. I predict the USA ratio will rise but will remain below 1/3rd of Italy’s ratio. Yet the author judges USA healthcare a failure, but doesn't judge Italy's healthcare!

Coronavirus - Medicare for All #2

On March 27 I wrote about an article using the coronavirus pandemic to make propaganda favoring Medicare for All. I was unaware of the website before then, and I guess it has a small audience. Only three days later comes more propaganda rationalized on the pandemic, this time from The New Yorker with many readers and the presumptive title "Reality Has Endorsed Bernie Sanders."

The author writes: "In the last Democratic debate, former Vice-President Joe Biden insisted that the U.S. doesn’t need single-payer health care because the severity of the coronavirus outbreak in Italy proved that it doesn’t work." She quickly moves on, ignoring Biden's statement as not worth considering.

Fittingly on April Fools Day, the site of the first propaganda follows with this story. Engaging in fantasy, it is oblivious to the toll of the pandemic in Italy and Spain, the countries with health care systems most like Medicare for All.

The Hollywood Reporter gives Bernie Sanders another opportunity to air his propaganda amid the pandemic. BS asks how is it that in the USA, with the highest per capita spending on healthcare in the world, there are shortages of protective equipment and ventilators. He names his usual scapegoats --  for-profit insurance companies and drug companies. He fails to address why there are even greater shortages of beds in hospitals and ventilators in Italy and Spain, the countries with healthcare systems most like Medicare for All. BS's mindset has no use for such a reality check.

Bernie wants the USA to guarantee healthcare to all its people. "Guarantee" is hyperbole. A government can promise all it wants. Delivery is what matters. Like Italy and Spain demonstrate, promises can be broken. No bed in a hospital and no ventilator for a horde of seniors.

A Washington Examiner article is far more objective. It isn't based on fantasy and does a reality-check. The reality is Italy and Spain, the countries with healthcare systems most like Medicare for All. Comparing them to Switzerland -- with nothing like Medicare, less tragic, and much less governmental interference -- would have been a plus. The article is still excellent. 

Coronavirus #5

Five days ago I computed and showed elsewhere Deaths/Cases from the coronavirus for Italy, Spain, Switzerland, and the USA. The ratios for Italy and Spain were several times those for Switzerland and the USA. Calculating the same ratios today shows (a) higher ratios for all four countries, and (b) Italy and Spain remain several times those for Switzerland and the USA.

This Worldometer page says the following about such ratios. "Once an epidemic has ended, [the case fatality rate] is calculated with the formula: deaths / cases. But while an epidemic is still ongoing, as it is the case with the current novel coronavirus outbreak, this formula is, at the very least, "naïve" and can be "misleading if, at the time of analysis, the outcome is unknown for a non negligible proportion of patients."

Of course, the ratio might be "naïve" and "misleading" if used to predict the ratio when the pandemic will end. However, that was not my purpose. My purpose was clearly to compare the countries' healthcare system's effectiveness of response to the pandemic, and I don't believe the above argument undercuts that. There is a competing explanatory hypothesis -- Italy and Spain have a higher fraction of their populations ages 65+. But I am keeping my doubt that age differences fully explain the fatality differences.

Italy and Spain both have far more government control of healthcare and health insurance than Switzerland and the USA. Italy and Spain also spend far less per capita. They are indicative real world examples of single-payer healthcare and Medicare for All. Bernie Sanders and Medicare for All promoters advocate both much more government control and spending far less.

Doctors in Italy have said there is a severe shortage of ventilators and younger patients have higher priority than older patients. This doctor tearfully says the same about Spain. Yet an advocate of Medicare for All, whom I wrote about three days ago, naïvely asserts by innuendo that there will be no waiting lines if there is Medicare for All. Tell that to those older patients in Italy and Spain. At the latest count Switzerland has more cases per 1,000 population than Italy and is not far behind Spain. Yet in Switzerland there is much more concern about a shortage of staff than there is a shortage of ventilators (link). 

Coronavirus - Medicare for All

This article argues that ‘The coronavirus is making the case of Medicare For All even stronger.’ In my opinion the argument is feeble and includes plenty of cherry-picking.

It describes the USA as merely a “for-profit” healthcare system, whereas the USA is already Medicare-for-all-over-age-65 and the majority of hospitals are non-profit. It insinuates that rationed care and waiting lines are symptomatic of a “for-profit” healthcare system, and implicitly assumes rationed care and waiting lines will not be the case if the USA adopts Medicare-for-All. 

Their comparison fails to include Italy, Spain, and Switzerland. Italy and Spain have two of the most Medicare-for-All like systems in the world. Their healthcare spending per capita is much less than Switzerland's or the USA's, like Medicare for All advocates assert it should be. Italy and Spain are doing comparatively poorly dealing with the coronavirus pandemic. Based on the Worldometer's latest statistics, Italy’s mortality rate (deaths/cases) is 10.19%. Spain’s is 7.58%. Switzerland has nothing like Medicare. While the government subsidizes its purchase, all health insurance is provided by private insurers. While Switzerland has even more cases per 1,000 population, the mortality rate (deaths/cases) is 1.65%, much less than Italy or Spain. The USA’s is close, 1.52%.

The article lauds South Korea’s and Taiwan’s healthcare systems and cites the low impact of the coronavirus in the two countries. The author uses them as innuendo to assert that it’s because their healthcare systems are instances of Medicare-for-All. In fact South Korea’s is far from it. There is a national health plan. However: “77% of the population have private insurance. This is due to the fact that the national health plan covers at most 60% of each medical bill” (link). 

Taiwan’s healthcare system is more like Medicare-for-All. The mortality rate from COVID-19 is very low, but so is the number of cases per 1,000 population. I can’t explain the latter. See update below. The author asserts the existence of “high traffic with mainland China,” an innuendo that Taiwan's exposure to the coronavirus is as high as, maybe higher than, other countries. Anyway, the healthcare system has not faced a stress test similar to Italy, Spain, Switzerland, or even the USA.

Switching the topic, Bernie Sanders is the most vocal advocate of Medicare for All in the USA. He has also expressed his contempt for billionaires. His world view implicitly takes for granted a fixed supply of goods and services. How that supply comes about doesn't interest him. He has shown no understanding of it. He views billionaires as “profiteers” and greedy hogs of that supply he takes for granted, depriving other people of their “fair share.” He regards the existence of billionaires as a "moral outrage." Contrary to his world view, multi-billionaires Elon Musk and James Dyson are working on producing more ventilators in the battle against the coronavirus. In Bernie’s ideal world, they would not have the money they are pouring into these efforts.

Update 3/27: Fear of China Made Taiwan a Coronavirus Success Story

Coronavirus #4

Italy has been the country hardest hit by the pandemic. News coverage here in the USA often refers to Italy. I haven't heard or seen news stories about its neighbor Switzerland. (Italian is the main language in a southern part of Switzerland bordering Italy.) The following are stats captured only minutes ago from the Worldometer for the two countries.

Country	Total Cases	Total Deaths	Tot Cases/ 1M pop	Tot Deaths/ 1M pop
Italy	69,176	6,820	1,144	113
Switzerland	9,117	122	1,053	14

The number of cases per thousand population aren't greatly different, but the number of deaths per thousand population are very different. Why is that? I cannot thoroughly explain it. Part is probably that Switzerland's over age 65 population is somewhat smaller, 18.4% versus Italy's 23%. However, this might be offset by Switzerland's higher percent of smokers. I have some suggestive ideas. One big difference is per capita health care spending. Switzerland is second highest in the world -- the USA being #1 -- and Italy below average among OECD countries. Switzerland's per capita spending was $7,719 in 2016; Italy's only $3,391 (Link). Switzerland had more hospital beds per 1,000 population in 2017 -- 4.53 versus Italy's 3.18 (link).

Public and compulsory spending on healthcare as a percent of the total in Switzerland is somewhat  lower than Italy. I suspect the compulsory part for Switzerland is much higher, because the people are required to buy insurance with the government subsidizing the purchase. This page doesn't mention anything like Medicare. The compulsory health insurance is provided by private insurers. Unlike the USA, there appears to be no employer-provided health insurance.

Italy appears to have a Medicare-like system, but for all ages. In other words, it's Medicare for All. It's called the National Health Service. "In 2019, Italy's healthcare system was regarded, by World Health Organization's ranking, as the 2nd best in the world after France." Link. The WHO ranked Switzerland #20. Isn't that ironic? Yet Bernie Sanders wants the USA to be a lot more like Italy!

Edit 3/25/2020: Markets vs socialism: South Korea, Italy, COVID-19  Hat tip to dream_weaver.

Addenda 3/26/2020: Somebody replied to the above with the following point. There is no treatment for coronavirus, so I doubt that the healthcare system is what makes it different in this case.

I replied as follows. It seems more accurate to say there is no good cure for coronavirus.  This article is about treatment. Some patients have been given drugs experimentally, which has helped some, and many are recovering from the virus. Aren't ventilators, which are often in news stories such as this one, a treatment? If a patient with COVID-19 has great difficulty breathing, can be put in a hospital on a ventilator, and survives, that strikes me as better than no hospital and no ventilator.  It sounds plausible to me that the patient is better off in Switzerland than Italy or Spain.

One thing I read about recently that is attributed to the high prevalence of coronavirus in Italy (and Iran) is the “One Belt and One Road” (OBOR) initiative. See here and here.

Hope that helps.

Health insurance administrative cost

An argument advocates of Medicare for All often make is that administrative costs would be far lower than private insurance. They typically say Medicare's administrative cost is only 2-3% of its spending, compared to 12% of revenues for private insurer. Since Medicare's revenues aren't much different than its spending, the different italicized terms matters little. However, there are plenty of other things that make it an "apples and oranges" comparison.

This Mises Institute article gives several counter-arguments. It seems to mostly copy a Heritage Foundation article more than 10 years old. The following counter-arguments are from the articles and some of my own:

1. "Social Security administers the collection of Medicare premiums. The IRS collects the taxes. Health and Human Services pays for building and marketing costs, as well as accounting and related concerns. Attributing those costs correctly would roughly double Medicare’s administrative costs."

In the Medicare 2019 Trustees Report administrative cost was about 1.7% of expenditures in 2018. The breakdown includes amounts paid to other government departments, including IRS and HHS. I don't know how realistic they are. So this argument the articles make seems weak or false.

2. "Medicare patients are far older and less healthy — and more than twice as costly, on average, than younger people in private plans. But having less than half the health care costs per beneficiary more than doubles private insurance’s administrative cost as a percentage of total costs, than if the more accurate measure — administrative cost per beneficiary — was used." A different source I found with more detail said that Medicare's cost per beneficiary is about three times that of private health insurance.

This is a good argument. Expressing administrative costs as a percent of total cost instead of per beneficiary is biased.

3. Private insurers pay premium taxes to states that Medicare does not. The tax averages about 2%. Private insurers, at least for-profit ones, pay income taxes, which Medicare doesn't. How much is difficult to quantify, since there are both for-profits and non-profits, but let's assume it's about 2%.

4. Some private insurer revenues go towards profit and marketing. Private insurers need to advertise and pay salespeople to persuade customers to buy their product. Medicare doesn't. Its revenues are required by law and backed by force.

5. A significant part of a private insurer's administrative cost consists of complying with Medicare rules, regulation, and practices. Since they are ever-changing, simply keeping up-to-date adds to such cost. This is especially true for insurers that administer Medicare Advantage policies.

6.  The costs private insurers bear for administering Medicare Advantage policies is done on behalf of Medicare. Medicare dictates that the policies must cover at least what original Medicare does. Medicare pays these insurers a lot of money to do so. It was about $11,000 per person covered in 2018. So such costs can be regarded as Medicare "off the books" administrative costs.

7. Medicare imposes administrative costs on providers, which aren't included in Medicare's spending. Providers must submit the forms and procedure codes to, and demanded by, Medicare in order to be reimbursed. This story reports that doctors spend almost half their time on paperwork and electronic records.

I'm not convinced that Medicare's administrative costs are higher than private insurance, like the Mises Institute and Heritage Foundation claim. However, Medicare's administrative costs are understated when provider costs aren't included and should be lower given Medicare's much larger size than any single private insurer. Regardless, other things matter, too. Medicare operates by force; private insurers don't. This difference matters little or none to advocates of Medicare for All.

This article has more detail about administrative costs, especially of providers.

Free market healthcare

This EconTalk interview of Dr. Keith Smith gives an insight into what free market health care. He co-runs a surgery center in Oklahoma that shows prices in advance, honors them afterwards, and only accepts cash, checks, and credit cards. The surgery center doesn't deal with insurance or Medicare. It has worked with employers who self-insure healthcare for their employees. Dr. Smith also cites tricks that hospitals use to get more money from the federal government and that insurance companies use to get more money from employers.

Employer-sponsored health insurance #2

In my my previous post I said a little about Ed Dolan's idea of making healthcare deductibles higher for higher income people. This is not the case for Medicare now. Everybody on Medicare faces the same dollar amount. Dolan's idea is novel, and I believe it's worth considering.

Suppose poor Pete and rich Rich both have Medicare. Pete's income is $30,000, he has more debt than savings, and Rich's is $300,000 with substantial savings and no debt. Each is in the hospital for several days for an operation. This results in a $200,000 bill for each. Medicare will pay the same for each, about $200,000 - $1,364 (Part A deductible) = $198,636. (This is simplified, which should be obvious if you have seen a hospital bill or one for outpatient surgery.) Pete might have a Medigap policy to cover the $1,364. Else, it is probably a significant expense to him. Whether Rich has a Medigap policy or not, he could easily afford the $1,364.

One may argue the Medicare law treats both equally, but that is only in terms of dollars. On the other hand, one may argue the Medicare law treats them unequally in terms of percent of income or wealth. One may argue that Rich is entitled to as much or more from Medicare because he paid far more in payroll taxes over his working lifetime than Pete did. I have no incontestable answer to what is equitable here, i.e. how much Medicare ought to pay. Anyway, it seems that Medicare paying less on behalf of Rich is not an unreasonable opinion. How much less is very debatable. If it were much less, let's assume that Rich had the opportunity to purchase a Medigap policy with a lower deductible to recognize his higher Medicare deductible if he wished to buy insurance for the extra risk.

One may argue that using income to calculate how much Medicare pays adds an administrative burden on Medicare. That is true, but Medicare already does that for Part B and Part D premiums.

Employer-sponsored health insurance #1

I missed this EconTalk interview about employer-sponsored health insurance when it occurred in January. The topic is still very relevant, so the interview is still worth hearing/reading.  My comments follow.

Ed Dolan was the guest. He said he knew of no major countries other than the United States where health insurance is tied to a job. Some who commented on the interview said that wasn't true, which Dolan acknowledged. I consider that a very minor flaw, and he made several good points.

The structure of the health insurance market was discussed, but not that there are really two very different parts to that structure. One part consists of people who have employer-provided health insurance or they buy individual coverage from an insurer (some on the Obamacare exchanges). The second part consists of people who have (1) Medicare Advantage, or (2) original Medicare plus perhaps a Medicare supplement or Medigap policy or Medicaid. A supplement or Medigap policy or Medicaid pays for healthcare in addition to what original Medicare pays.

The first part consists mostly of people under age 65, and the second part mostly people age 65 or older. The exception for the first part is that a few people under age 65 have Medicare due to disability. The exception for the second part is that a few people age 65 or older do not have Medicare or Medicare Advantage because they still work and have employer-sponsored insurance.

The second part of the market is quite competitive. Many insurers offer Medicare supplement (Medigap) policies and Medicare Advantage policies. They are often advertised, especially during open enrollment (Oct. 15 to Dec. 7). In contrast, the first part of the market is not very competitive. An employee must generally choose from a very small number of plans the employer offers. Not many people buy insurance policies for themselves, so the market is small and the risk pool is small and very risky to insurers. The buyers are the self-employed, not employed, part-timers, and employees of smaller employers that do not provide health insurance. Many complain about the premiums being too high. I don't see many advertisements aimed at potential buyers. The number of persons with employer-sponsored insurance is several (7 or 8) times as many as the number buying individual insurance on their own.

Here I argued that making employer-paid insurance premiums taxable income to the employee would significantly change the nature of the first market (and lower government deficits). Some employees, considering how much they pay into an employer plan plus the additional income tax, would choose to switch to the individual policy market. Many could switch eventually, with fewer employers offering health insurance and higher wages instead. The individual market risk pool would become much larger, with more choices and more competition. Also, people who have employer-sponsored coverage tend be healthier than average. If many of them moved to the individual market, there would be more spreading of the risk and lower, more predictable claims, which permits lower average premiums.

I believe the Universal Catastrophic Coverage that Dolan proposes would be much better than the current system. Higher income folks having higher deductibles, i.e. higher out-of-pocket expenses, makes sense. They can better afford it, and it would reduce government spending on healthcare. I find it ironic that people such as Bernie Sanders and Elizabeth Warren don't advocate higher deductibles, i.e. higher out-of-pocket expenses, for people with higher incomes. They only advocate lower deductibles to benefit middle and lower income people. In general higher income people utilize healthcare more and live where medical provider charges are higher. Lower deductibles benefit higher income people, too! Why do Sanders and Warren desire a plan that does that? Of course, both are advocates of ever higher government spending with little or no concern for government deficits and debt. As is, Medicare and Medicaid will add to ever increasing future deficits, much due to the aging baby boomers. Medicare spending is expected to double in 10 years (link).

Medicare for All: Pushback against Warren

In my last post about Presidential candidate Elizabeth Warren's Medicare for All plan (better, trial balloon) I wrote that Warren assumes healthcare providers will be reimbursed only 110% of Medicare rates. She says nothing about resulting healthcare facilities closing or healthcare job losses.

Healthcare providers, especially hospitals and doctors, whose revenues Warren wants to slash, have since responded as reported here. Medicare pays providers much less than private insurance does. The difference is especially large at hospitals, where an analysis by Rand Health Care found that private insurers pay more than twice as much on average for similar care. Medicare's (and Medicaid's) low payment rates have forced higher payments onto private insurers for decades.

Warren talks as if slashing revenues would only be superficial, like the 2 million private insurance administrative job losses she flippantly admitted. In their imaginative rhetoric, politicians write a law, snap their fingers, and reality magically changes as they intend and no way else. The providers know better. Lower revenues to providers would not merely reduce the pay of "the rich" and pare "unnecessary" work like Warren (and Sanders) want voters to believe. Lower revenues would affect middle and lower income jobs and how much providers can afford for supplies, equipment, real estate, innovation, etc. Some healthcare facilities would be forced to close.

The article quotes demagogue Bernie Sanders: "People don't like their private insurance companies. They like their doctors and hospitals. We will substantially lower the cost of health care in this country because we will stop the greed of the insurance companies and the drug companies."

Contra Sanders, millions of people, even if not fond of insurance companies, much appreciate and demand the healthcare that the insurers pay for. Nevertheless and anti-freedom, both Warren and Sanders want to eliminate such insurance for 160 million or so people! Also note that Sanders' second sentence fits his reality defying assumption that government can magically change reality as he intends and no way else.

The final paragraph quotes Dr. Stephen Klasko: "Warren saying everyone has to take a hit is probably the right thing." Huh? Warren says that her plan would not take one cent from the middle class.

Medicare for All: Warren's Chicanery

Presidential candidate Elizabeth Warren was sharply criticized by other Democrats for not saying how much taxes would increase to pay for her Medicare for All plan. She finally gave a response (link). It includes plenty of chicanery.

The Associated Press, NY Times, and Los Angeles Times all report her Medicare for All would cost $20.5 trillion more for a decade. Of course, that's her number, and politicians excel in lowballing costs and slight of hand (Blahous). For example, private insurance plans reimburse providers far higher than Medicare does, but Warren assumes they will be reimbursed only 110% of Medicare rates. She says nothing about resulting healthcare facilities closing or job losses.

The first version of the AP article (since updated) gave revenue numbers that summed to $20.5 trillion to pay for it.  However, since Warren has already tagged some of the revenues to pay for climate change, student debt relief, bigger Social Security benefits, etc., the numbers cannot sum to all of the additional government spending she wants.

The $6.1 trillion "savings" she subtracted in arriving at $20.5 trillion is phony. She assumed it's redirected to the federal government from what state and local governments now spend on Medicaid, the Children’s Health Insurance Program, and employer contributions. Huh? The federal government will take the money, and the beneficiaries will get equal or better under Medicare for All. That's not savings; it's slight of hand, evoking revenue and obliterating transfer of cost. Blahous also noticed it. Donald Berwick, whose article I addressed here, fabricated this slight of hand for Liz (link).

Also, $1.4 trillion of it made no sense. The alleged source is more tax revenue from people not having to pay "private health insurance's premiums, deductibles and co-pays."  Sorry, Liz, and contra Blahous, not having to pay those things will not result in higher taxable income and taxes for the vast majority of people. They don't itemize and take medical deductions for income taxes, and health insurance premiums paid by employees are not deductible anyway.

By the way, isn't it amazing that eliminating co-pays and deductibles and handing out new "free insurance" cards to millions of Americans will not increase demand? Yet Liz says nothing about rising demand increasing healthcare costs.

Liz assumes the federal government will extract $8.8 trillion from employers via taxes what they would otherwise spend on private insurance for their employees. Bernie Sanders assumes only $3.9 trillion. She assumes the employers will pay 98% of what they were paying versus Sanders' 75%, but that falls far short of explaining $8.8 trillion versus $3.9 trillion.  Does she assume extracting taxes from state and local governments, public school systems, and non-profits, all of whom are employers that pay zero taxes? Not surprisingly, Liz makes an exception for unions. To the supporters go the spoils.

Liz would restore the corporate income tax rate to 35%. In her fantasy world this will not retard economic growth.

From the AP article: "We can generate almost half of what we need to cover Medicare for All just by asking employers to pay slightly less than what they are projected to pay today, and through existing taxes," Warren wrote in a 20-page online post detailing her program.

Show a little honesty, Liz. You will not ask them. You want the government to coerce them. Is that Liz's newspeak -- asking includes coercing?

I have two more questions for Liz, like ones I had for Bernie Sanders (link):

Q1: Many employers that are nonprofits, state and local governments, and public school systems provide health insurance for their employees. Does Liz advocate the same healthcare tax on them that she does on private employers and eliminating the health insurance such employers provide for their employees? Why should these employees have anything better than private sector employees?

Q2: Would the current healthcare plan for federal employees and retirees (Federal Employees Health Benefits Program) be eliminated? I much doubt it. Special and superior privileges for government employees is the usual for authoritarians like Liz. But if not, why not? Why should federal employees have anything better than private sector employees?

Medicare for All: Profligate Sanders

This article at The Hill reports on an interview of Bernie Sanders by CNBC’s John Harwood. Harwood asks Sanders about how to pay for his Medicare for All plan. Sanders responds: "You're asking me to come up with an exact detailed plan of how every American — how much you're going to pay more in taxes, how much I'm going to pay. I don't think I have to do that right now."

No, evader Sanders. The article makes it very clear that Harwood asked about aggregate additional government spending and taxes for Medicare for All. This Sanders web-page calls for additional revenues that total about $16 trillion over 10 years. However, $4.2 trillion of that is from assuming employers will pay more taxes because they won’t be deducting the cost of health insurance for their employees. Does Sanders intend that the $3.9 trillion premium/tax Sanders wants to impose on them be, unlike wages or health insurance premiums now or FICA taxes (paid to Social Security and Medicare), will not be a tax-deductible expense? It also totally ignores that employers could easily spend the “savings” on other things like hiring more employees, buying supplies, buying new equipment, etc. Thus at least $4.2 trillion of Sanders’ alleged $16 trillion is highly spurious. So Sanders’ plan is for the government to spend $34-36 trillion more on healthcare, as estimated by the left-leaning Urban Institute, and only collect $12 trillion in taxes.

The $34-36 trillion does not even include all other government spending BS wants – for climate change, infrastructure, student debt relief, more subsidies, bigger Social Security benefits, etc.

Of course, this is no problem for BS. Despite the lip service he gives to government deficits and debt – when it is convenient to criticize his political opponents – he doesn’t care an iota about government deficits or debt. He regards any government spending he approves of as a heavenly gift, and in Sanders’ newspeak justice includes extortion.

Medicare for All: Chicanery from The Guardian

An op-ed at The Guardian by Emmanuel Saez and Gabriel Zucman exemplifies chicanery about Medicare for All. No M4A proposal to my knowledge has stipulated that employers take what they now pay for healthcare coverage for their employees and use it to raise wages for their employees. Indeed, this page from a Bernie Sanders website belies it: “employers will be required to pay either 75 percent of what they are currently paying for health care costs for each of their employees who enroll in Medicare for All, or a 7.5 percent payroll tax, whichever is higher.” The same page also stipulates a new 4% premium/tax paid by the employee.

Yet Saez and Zucman write: “Take again the case of a secretary earning $50,000 in wage and currently contributing $15,000 through her employer to an insurance company. With universal health insurance, her wage would rise to $65,000 – her full labor compensation. With an income tax of 6% – which, if applied to a base large enough, would be enough to fund universal health insurance – she would have to pay about $4,000 more in tax. But the net gain would be enormous: $11,000. Instead of taking home $50,000, the secretary would take home $61,000.”

Firstly, if indeed the cost of insurance for the secretary and his/her dependents is $15,000, he/she is not contributing the entire $15,000 like Saez and Zucman say. Far more likely, he/she pays about 30% (typical for family coverage) of that ($4,500) and the employer pays the other $10,500. Secondly, Sanders’ plan says absolutely nothing about diverting what employers pay for health insurance to employee wages. As obvious above, Sanders wants the government to confiscate 75% or more of it by taxation and tax the employee another 4% of income.

So it’s patently clear that what Saez and Zucman say about the secretary was totally fabricated and pure propaganda. What chicanery advocates of Medicare for All will use to hype their cause! How many secretaries and millions of other voters will swallow Saez’s and Zucman’s lie that Medicare for All will raise their pay? Many who commented to the op-ed at The Guardian swallowed the lie.

Medicare for All Myths

This USA Today opinion article exemplifies the myths, propaganda, and falsehoods about Medicare for All. The following text in italics is from author Donald Berwick's article.

The truth is the opposite: Medicare for All would sharply reduce overall spending on health care.

The truth is Berwick's assertion is pure fantasy. Even the Urban Institute, a left-leaning think tank highly respected by Democrats, projects that a plan similar to what Bernie Sanders and Elizabeth Warren are pushing would require $34 trillion additional federal spending over its first 10 years (link). For comparison, total federal government revenue is expected to be about $3.44 trillion in 2019. 10 x $3.44 trillion = $34.4 trillion.

Less than 20% of the US population has Medicare now. Yet Berwick says 100% of the population will be covered with bigger benefits (e.g., no copays, no deductibles, long-term care) and it will cost less!

Lastly, Berwick's assertion logically implies that income to health care providers and their support personnel will be sharply reduced. So how many jobs in the healthcare industry does Berwick want to destroy and how deeply does he want to slash the incomes of nurses, orderlies, receptionists, technicians, workers doing billing and collections and claim processing, accountants, doctors, and so forth that remain?

Medicare for All would be simpler, easing the onerous burdens of billing for doctors, endless paperwork for all health care professionals, and navigating the confusing coverage system for patients and families.

More myths. Unless Berwick wants the government to simply dictate low wages for doctors, doctors will still need to bill Medicare, Medicaid and whoever else is standing after the Medicare for All wrecking ball is done with its destruction. Rarely does government action simplify anything. Government epitomizes endless paperwork and bureaucracy. The complicated, confusing healthcare structure now in place was created by government fiats and regulations.

Faced with these facts, opponents of Medicare for All too often revert to myths instead.

Facts? LOL. It is the advocates of Medicare for All like Berwick that have nothing better than their own fabricated myths about what the future with Medicare for All would really be like.

But it is deeply misleading to pretend that this shift is an increase in family health care costs. It is not.

If Medicare for All bans employer-insurance like Bernie Sanders wants, at least in some of his newspeak, how does that not increase healthcare costs for employees and their families? If income or payroll taxes are raised, how does that not effectively increase healthcare costs for employees and their families?

Note that Berwick says nothing about eliminating private insurance. He also says nothing about employer-paid insurance for employees of the federal government, state and local governments, non-profits, unionized workers, and public school systems. Or does Berwick fail to understand the meaning of single in single-payer. It means Medicare pays and nobody else, period.

In summary Berwick's idea of Medicare for All is a mountain of myths.

Medicare for All and Insurance for None?

The demagogue-socialist-authoritarian-power-luster Bernie Sanders is very critical of private health insurance and wants to eliminate such insurance provided by employers, at least private for-profit employers. (Medigap and Medicare Advantage insurance will not be considered here.) His own website proposes separating health insurance from employment. But how sincere and consistent is he? Or is it lying propaganda?

Does BS intend eliminating insurance provided only by private for-profit employers or all employers? In other words, would he end all health insurance now provided to employees by the federal government, state governments, local governments, non-profits, unions, and public school systems? By what moral principle should those employees be more privileged than anybody else? If they continued to have employer-paid healthcare but nobody else, it would be a gross inequality and gross injustice. Government employees, union members, and public school teachers would get benefits denied to anybody else not a member of the privileged class. The not privileged would be treated as inferior, second rate citizens. The not privileged class with no insurance except Medicare would be forced to pay via taxes (and inflation) to serve the privileged, most of whose entire pay comes from taxes. The result would be a two-tier system -- one for government employees plus other favored groups, and a second, inferior one for the rest. It would be a two-tier system of masters and their servants. It would exemplify the situation in George Orwell's novel Animal Farm: "All animals are equal, but some animals are more equal than others." This is a proclamation made by the pigs who control the government in the novel. It is a comment on the hypocrisy of governments that proclaim the equality of their citizens but give power and privileges to a chosen elite.

BS claims to be a champion of equality, yet advocates Medicare for All which would treat all but the politically-privileged far worse. His advancing the power of the political ruling class and the subjugation and looting of the productive members of society is his primary goal, and has been for the last 40 years.

Nobody asks Bernie Sanders these questions

The demagogue-socialist-authoritarian Bernie Sanders wants Medicare for All. It would eliminate all private healthcare insurance (which pays more than one-third of all healthcare costs). He says he would raise taxes to implement it. He typically evades saying how much or in what form, and the fawning media doesn't press him for an answer. He hasn't said so, but he might target employers with a "healthcare tax" based on the $1 trillion or so employers now pay for health insurance for their employees.

Total healthcare spending was about $3.5 trillion in 2017. Sanders says total healthcare costs would be much less with Medicare for All. He believes other countries like Canada, Germany, and the United Kingdom have as good or better healthcare than the United States while spending much less. The average per capita spending in these three counties for 2016 was $4832, but $9892 for the United States (link). It logically follows from BS's premises that with Medicare for All: (1) U.S. healthcare costs would be only $1.7 trillion, and (2) spending by healthcare providers will also be reduced to only $1.7 trillion.

Q1: Assume in aggregate healthcare provider outgo is about 75% to pay workers, 12% for supplies and equipment, and 13% for miscellaneous (malpractice premiums, property, interest, taxes, and surplus -- the last mainly saved to pay for future expansion, new technology, and capital equipment replacement). So the question for Bernie is how many jobs will be eliminated and how much will  pay to workers and other expenses be cut in order to cut total spending by health care providers more than 50%? More specifically, how many jobs of nurses, orderlies, receptionists, technicians, workers doing billing and collections and claim processing, accountants, doctors, and so forth will be eliminated and/or how much will their pay be reduced?

Q2: Many employers that are nonprofits, state and local governments, and public school systems provide health insurance for their employees. Would Bernie advocate the same healthcare tax on them that he does on private employers and eliminate the health insurance such employers provide for their employees? Why should these employees have anything better than private sector employees?

Q3: Would the current healthcare plan for federal employees and retirees (Federal Employees Health Benefits Program) be eliminated? I much doubt it. Special and superior privileges for government employees is the usual for Sanders. But if not, why not? Why should federal employees have anything better than private sector employees?

Socialist health care in Venezuela

Bernie Sanders, Ocasio-Cortez and their ilk like to praise socialist health care. Exactly one month ago (link) I wrote that and that Sanders, Ocasio-Cortez, and their ilk describe health care in Denmark and Sweden as ideal, but they say nothing at all about health care in Venezuela, which is very socialist.

This article at a public media website describes how bad health care is in Venezuela. For example: Patients who go to the hospital need to bring their own food and medical supplies like syringes and scalpels, as well as their own soap and water. Cases of measles, diphtheria, malaria, maternal mortality, infant mortality, tuberculosis, HIV infections, and AIDS-related death have all increased sharply.

What the article entirely omits saying is that this is socialist health care. Being the article was written for a member station of NPR (National Public Radio), I am not at all surprised.

Hat tip to Gus Van Horn (link).

Battling Alzheimer's

Forbes magazine has an interesting article about efforts to fine a cure for and treat Alzheimer's disease. The main points are:
- Bill Gates recently vowed to donate more than $50 million to fund Alzheimer’s research.
- Gates and the Rand Corporation both say that due to the aging of the population, the population of Alzheimer’s patients is growing so rapidly the healthcare system isn’t equipped to handle it.
- Some drug companies such as Biogen and Merck are working on cures. Biogen has a drug undergoing Phase 3 clinical testing expected to be complete in late 2019. Ditto for Merck except 2020. This page describes the different phases of clinical testing (Step 4 section).
- A PET scan is required to diagnose whether or not a person has Alzheimer's. The current supply of PET scan machines and geriatricians capable of diagnosing the results are low compared to the number of people who could be suspected of having Alzheimer's in the next 20 years or so. Thus Gates' and the Rand Corporation's concern about demand much greater than supply.
- The notion that amyloid is the main culprit in Alzheimer’s has come under question recently. Gates will support efforts to look beyond amyloid, investing his money in the Dementia Discovery Fund, which seeds companies pursuing much different theories about what drives the disease.

Still, there are other forms of dementia. Wikipedia says that Alzheimer's is the most common form, being 50-70% of the cases. Dementia also appears in late stages of Parkinson's disease. Forecasts of the number of people with Parkinson's disease also are high. Science Daily reports that new research shows that the number will soon grow to pandemic proportions.