Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Americans beware Obamacare is not dead

Bad political policies are like B movie monsters, instead of dying they just come back in new and scarier forms. Case in point Obamacare, that horrendous piece of legislation is being raised from the grave and worse by the mad scientists in the Democratic establishment.

An Obamacare 2.0 scheme that’s actually worse than the original is being promoted by the Center for American Progress (CAP), a Democratic think tank. Not surprisingly, New York Times op-ed columnist David Leonhardt loves the scheme euphemistically labeled “Medicare Extra for All.” He even labeled it a “Better Single Payer Plan.”

The problem with that claim is CAP’s proposal is neither single payer nor for all. Instead, it simply extends the Obamacare system and provides no means of controlling costs. Worse, it would pass those out of control costs onto working Americans and drive many of them into debt.

Medicare Extra means Extra Costs for Americans  

Under a single-payer system, the insurance covers 100% of healthcare costs. Under Medicare Extra, only about 80% of healthcare costs for many families would be covered.

A family making more than 150% of the federal poverty level (FPL) of $24,600 would have to start paying a deductible, a CAP press release indicates. That indicates a family making as little as $36,900 a year might be hit with a deductible.

That means a working family hit with a $20,000 medical bill, hardly an uncommon occurrence, might still need to come up with $4,000 out of pocket. Such expenses can be a major hardship because almost half of Americans would have a hard time coming up with $400 in a pinch, The Washington Post reported.

Medicare Extra = High Deductibles and Premiums for All

Medicare Extra is particularly horrendous because all Americans would be automatically enrolled in it.

That means a person with no health insurance, who received medical treatment could be hit with a big healthcare bill. If such a person went to the hospital, it would bill Medicare Extra for his treatment then send him a bill for the remaining 20%.

Beyond that, Medicare Extra would generate vast amounts of paperwork and create lots of jobs for bureaucrats. Somebody would still need to send out all those bills, and calculate them. The paperwork adds to costs which will be added to bills to drive up costs.

A major problem with deductibles is that they give healthcare providers an incentive to jack up costs to squeeze more money out of patients. A provider that added $400 to a $1,000 bill can charge a patient a $280 deductible.

Some Americans would pay 10% of their income in Premiums under Medicare Extra

Nor is that the worst part of Medicare Extra; some families might end up having to pay up to 10% of their income in health-insurance premiums in the program. The Center for American Progress itself admitted some people would pay a 10% premium.

“For families with income between 150 percent and 500 percent of FPL, caps on premiums would range from 0 percent to 10 percent of income,” the CAP Medicare Extra Press release states.

Under this plan, a family of four making 500% of the federal poverty level might be hit with a yearly health-insurance premium of $12,300 a year. The FPL for a family of four is $24,600 according to the U.S. Department of Health and Human Services, and 500% that number is $123,000.

In today’s America, $123,000 is an average upper-middle-class income. People like high school principals and successful car salespeople might end up paying 10% of their income in premiums. Meanwhile, billionaires like Amazon CEO Jeff Bezos; the world’s richest man, could participate in Medicare Extra for a paltry $12,300; an incredibly tiny fraction of his supposed $124 billion fortune.

One has to wonder if anybody at the Center for American Progress owns a calculator or knows how to use one. One also has to wonder if Leonhardt read Medicare Extra – if he had he would not be promoting it.

Medicare Extra would be a terrible deal for Middle-Class families

Medicare Extra sounds like a terrible deal for middle-class families. It would charge them higher premiums and deductibles for less health insurance.

Many people could see their coverage reduced under Medicare Extra because any employer would be able to participate in the scheme instead of offering its own health insurance. A lot of large employers’ health plans cover 85.4% of healthcare costs, Medicare Extra might only cover 80%, The Guardian pointed out.

Some Americans might end up paying higher premiums for less coverage under Medicare Extra. Worse, they would be forced to pay those premiums because the employer would be in a position to simply cancel its policy and enroll its employees in Medicare Extra. The program sounds like a great deal for companies trying to reduce healthcare costs and a horrible deal for families that need healthcare.

Why America’s Health Insurance System Sucks, it is politics

The worst part of Medicare Extra is that some Democratic politicians will undoubtedly promote it. If Democrats take control of Congress this nonsense might become law, and it is such a horrendous policy that President Donald J. Trump (R-New York) would probably sign it.

What is truly bothersome is that creating a better Medicare for All system is not rocket science. The gang down at your corner bar could probably design a better, cheaper, and more comprehensive single-payer proposal most Americans would like.

Unfortunately, real Medicare for All would put a lot of bureaucrats (most of whom vote Democrat) out of work, and cost insurance companies (major campaign donors) a lot of money. Therefore, the CAP and the Democratic Establishment (and the Republican establishment) want nothing to do with it. The real barrier to healthcare reform is our political leadership until it changes, America’s health-insurance system will suck.

See my next article for my thoughts on an American single-payer solution called 21st Century Medicare.