U.S. should have Medicare for all ages
By Robert Gumbiner
Press-Telegram
Article Launched:
01/27/2008 08:26:59 PM PST

There is a somewhat illogical argument being made against expanding
Medicare to include all citizens and taxpayers in the U.S., which is
that Social Security and Medicare are going to go broke. This argument
makes no sense. For one thing, if this were true, how could the
federal government keep borrowing from Social Security and Medicare?
The fact is, Medicare has the money and the federal government
doesn't.

Another argument used to muddy the waters is that health care costs
more than Medicare can afford to pay. The answer to this problem is
simple: collect more money. When the cost of living goes up, we expect
to pay more for goods and services. Twenty years ago, a house might
cost $50,000 or $150,000; that same property now costs $800,000. So
why should we expect to pay the same amount of money for Medicare
health care that we were paying 20 years ago?

In addition, let's pay more attention to controlling the costs and
better education of the providers in the cost of their procedures.
Give the providers, i.e. doctors and hospitals, some responsibilities
for cost control.

True, when 80 million baby boomers join the 40 million people
currently covered by Medicare, the budget may be stretched thin. But
since Medicare will be spreading the risk over 120 million people, in
the future it will work. Remember, a lot of those new people are
accessing Medicare at 66 years of age and those are winners for the
Medicare program because they are healthier than the average. These
younger people will be feeding in over the next 20 to 30 years, and
using less care initially. Actually, Medicare may work better; it's
the increasing number of people in their late 80s and 90s that we have
to worry about.
By the same token, we could expand Medicare to provide health care to
everyone, using a simple payroll deduction (from employees) and
contribution (from employers). We know that people will agree to pay
more if they get more. In the Scandinavian countries people are
willing to pay more because they get more social services, including
health care coverage. People in this country can understand this
simple equation. They would be agreeable to pay another 4 percent
payroll deduction if it meant 100 percent coverage and no financials
worries.

This is a simple plan that can work, but the public is being led down
the garden path by a bunch of unknown, talking heads. The propaganda
machines for the insurance and pharmaceutical companies are trying
their old-fashioned scare techniques on the American public, claiming
that Medicare is going broke, so forget about using it to establish
national universal health care.

Garbage!

It will just take another three or four percentage points - whatever
it costs - out of payroll. People will be delighted to pay it in order
to get full coverage.

The biggest opponents to expanding Medicare are the insurance and
pharmaceutical companies. Insurance companies are parasitical. They
get paid fo`r doing nothing. In fact, they create their work. Having
managed two insurance companies in addition to a large HMO, I can tell
you that it costs at least 15 percent or more to market your product
and another 10 percent to run the company, even if you are fully
funded and spreading the risk. This means 25 percent to 30 percent of
"health care cost" is going directly to the insurance companies and is
not contributing anything to health care. Right now, Medicare avoids
this added 25 to 30 percent, paying something like 4 to 6 percent, all
in, for claims adjustments outsourced to companies like Blue Cross. It
is time for insurance companies to get out of the health care
business.

We brought the tobacco companies under control for the greater good of
the American public; we can do the same with the insurance and
pharmaceutical companies that shamelessly exploit the American
public.

How is it that American pharmaceutical companies can sell their same
product for 30 percent, 40 percent or 50 percent less in Canada and
Mexico and make money? Doesn't that mean they are making 30 percent,
40 percent or 50 percent more than they need to make off the American
public? It is a crime. It's ridiculous. Why doesn't Congress do
anything about it?

Robert Gumbiner, M.D., is founder and former CEO of FHP
International.

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