Bernie Sanders' "Medicare for All" Is 'Good For None'

Recently, Senator Bernie Sanders unveiled a single-payer healthcare plan called “Medicare for All.”

Sanders titled his approach for nationalizing one-sixth of the American economy as “Medicare for All” in order to offer a template for his vision of the U.S. healthcare system.

Unfortunately, using Medicare as the template for the nation’s healthcare system is a little like using the production model for the Lada, the “people’s car” of the former Soviet Union, as the blue-print for the U.S. auto industry.

The “Medicare for All” proposal would transition millions of Americans to a Medicare-style system over the course of four short years, all the while promising to expand benefits, eliminate deductibles, and cut costs. If that sounds too good to be true, it is.

The assumption that Medicare can be a long-term, sustainable model capable of absorbing quadruple the number of current enrollees is flawed from the start.

Medicare covers approximately 57 million Americans and is projected to cost nearly $700 billion this year. Revenue for the Medicare trust fund is generated via beneficiary premiums, which Sanders wants to eliminate, and general tax revenue, which he wants to increase. According to the 2016 Medicare Trustees Report, the Medicare trust fund faces a “substantial financial shortfall.” In fact, the report forecasts that within 12 years the trust fund will be depleted unless further legislation is enacted. Sanders’s proposal would place a significant burden on an already financially shaky system.

Another aspect of Medicare on which the senator’s plan relies is its provider-fee structure. Medicare reimbursement is significantly lower than the reasonable and customary fees routinely charged by those providing care. Providers make up the difference by shifting costs to non-Medicare patients. By moving all Americans to “Medicare for All,” Sanders’s plan would artificially set provider fees well below market levels. Payments below the cost of doing business would likely result in fewer providers as physicians and hospitals are forced out of business and fewer new providers enter the market. Providers that remain would essentially become government employees. From a patient perspective this would mean longer wait times, less control over healthcare decisions, and lower quality of care. Think of it as the disruption caused by Obamacare but on steroids.

Lastly, the senator’s plan makes the case that eliminating the private healthcare insurance industry and utilizing a Medicare model would mean lower administrative costs resulting in substantial savings. While proponents for single-payer healthcare cite a lower percentage spent on administrative costs, the calculation of these percentages is skewed by significantly higher beneficiary spending. On a per-capita basis, however, Medicare administrative costs are nearly equal to private insurance. This despite a greater number of private insurance providers, variability in their administrative efficiency, and higher marketing and promotion costs.

The good news in Sanders’s “Medicare for All” plan is that it has no chance of passing.

The bad news: It now partially fills the vacuum created by a collapsing Obamacare and the absence of market-based reform alternatives.

As a healthcare option now or in the future, “Medicare for All” would be good for none.

Visualizing How Americans Get Healthcare Coverage

With Obamacare firmly in the crosshairs of Republican lawmakers, the debate around U.S. healthcare is at a fever pitch.

While there is no shortage of opinions on the best route forward, Visual Capitalist"s Jeff Desjardins points out that the timeliness of the debate also gives us an interesting chance to dive into some of the numbers around healthcare – namely how people even get coverage in the first place.

HOW AMERICANS GET HEALTHCARE

The following infographic shows a breakdown of how Americans get healthcare coverage, based on information from Census Bureau’s surveys.

Put together by Axios, it shows the proportion of Americans getting coverage from employers, Medicaid, Medicare, non-group policies, and other public sources. The graphic also includes the 9% of the population that is uninsured, as well.

The following definitions for each category above come from the Kaiser Family Foundation, a non-profit that uses the Census Bureau’s data to put together comprehensive estimates on healthcare in the country:

Employer-Based: Includes those covered by employer-sponsored coverage either through their own job or as a dependent in the same household.

Medicaid: Includes those covered by Medicaid, the Children’s Health Insurance Program (CHIP), and those who have both Medicaid and another type of coverage, such as dual eligibles who are also covered by Medicare.

Medicare: Includes those covered by Medicare, Medicare Advantage, and those who have Medicare and another type of non-Medicaid coverage where Medicare is the primary payer. Excludes those with Medicare Part A coverage only and those covered by Medicare and Medicaid (dual eligibles).

Other Public: Includes those covered under the military or Veterans Administration.

Non-Group: Includes individuals and families that purchased or are covered as a dependent by non-group insurance.

Uninsured: Includes those without health insurance and those who have coverage under the Indian Health Service only.

HEALTHCARE MIX BY STATE

Here’s another look at how Americans get healthcare coverage on a state-by-state basis.

This time the graphic comes from Overflow Data and it simply shows the percent of buyers in each state that receive health coverage from public sources:

Oddly, the state that gets the highest proportion of public health coverage (New Mexico, 46.6%) is kitty-corner to the state with the lowest proportion of public health coverage (Utah, 21.3%).

WHY THE DEBATE IS PARAMOUNT

If you ask some people what is going on with U.S. healthcare, they will tell you that things are going “sideways” – that costs are going up, but care is not improving anywhere near the same pace.

Here’s a graphic we published last year from Max Roser that puts this sentiment in perspective:

It’s fair to say that care has been going sideways in the U.S. for some time, and the stakes couldn’t be higher.

So, what needs to be done to fix the problem?

Americans Spend The Most For Health Care, Still Die Young

The Organization for Economic Cooperation and Development just released its latest batch of data seeking to measure the quality of health care in each of its member states.

The rankings show that although the US spends more per capita on health care than any of the 34 other OECD member states, its average life expectancy of 78.8 years ranks is among the lowest found in the group, according to a Bloomberg analysis. 

According to the data, the US ranks near the bottom compared with its developed-country peers in prevalence of infant mortality and maternal mortality, as well as deaths from cancer and cardiovascular disease.

“It has the fourth highest infant mortality rate in the OECD, the sixth highest maternal mortality rate and the ninth highest likelihood of dying at a younger age from a host of ailments, including cardiovascular disease and cancer.”

There’s also a surprising disconnect between how healthy Americans believe they are, and how healthy they really are.  

“The U.S. is the most obese country in the OECD, leads in drug-related deaths and ranks 33rd in prevalence of diabetes. Yet 88 percent of Americans say they are in good or very good health, according to OECD statistics. Only 35 percent of Japanese, who have the highest life expectancy in the OECD, regard themselves as healthy or very healthy.

Bloomberg attributes the gap to the America’s reliance on “voluntary” health insurance, saying that OECD countries that rely on public health-care plans have much higher life expectancy, presumably because patients in these countries are incentivized to seek preventative care.

“Unlike other countries in the OECD, the U.S. mostly relies on voluntary health insurance to fund health-care costs. Public health insurance, such as Medicare and Medicaid, accounts for 27 percent of coverage. By contrast, the 10 countries with the highest life expectancy depend on voluntary insurance for an average of less than 6 percent of their costs, and government spending for nearly half.”

Pharmaceuticals are of the biggest drivers of the US"s high health-care costs: The US spends more per capita on prescription medicines and over-the-counter products than any other country in the OECD.

The data arrive as President Donald Trump and Senate GOP leaders consider their next move in a battle to repeal and replace Obamacare. Their latest effort, a so-called “skinny repeal” bill that would’ve rolled back some of the more controversial aspects of Obama’s landmark health initiative was rejected by a one-vote margin when Sen. John McCain, who’s suffering from brain cancer, surprised his peers by voting “no” in an early-morning vote last week.

Health insurance costs are on track to rise much more quickly than inflation as Trump considers using executive actions to ditch key payments to Obamacare insurance companies if a repeal and replace bill is not passed. Insurers in five states requesting premium increases of more than 30%, using this “policy uncertainty” as an excuse the blame the president.

With so much “uncertainty” surrounding the future of health-care in the US, maybe Bernie Sanders will succeed in passing a single-payer initiative that he’s vowed to introduce. Of course, the tax increases that would be required to implement the legislation might trigger a few unintended health crises of their own once taxpayers see the bill.

The complete rankings can be found below:

New Study Finds U.S. Healthcare System Ranks Dead Last Compared To Other Developed Nations

As Republicans sit on the precipice of fumbling what will likely be their one opportunity to repeal and replace America"s failed Obamacare experiment, a new study just released by The Commonwealth Fund found that the U.S., despite spending more money per capita than any other country on the planet, has the worst healthcare system in the developed world.

The Commonwealth Fund focused on evaluating five main areas of the healthcare system, including care process, access, administrative efficiency, equity and health care outcomes and analyzed 72 indicators within those fields.  Of the 11 countries included in the study, the U.S. ranked dead last by a fairly staggering margin.

The United States spends far more on health care than other high-income countries, with spending levels that rose continuously over the past three decades (Exhibit 1). Yet the U.S. population has poorer health than other countries.

Timely and accessible health care could mitigate many of these challenges, but the U.S. health care system falls short, failing to deliver indicated services reliably to all who could benefit. In particular, poor access to primary care has contributed to inadequate prevention and management of chronic diseases, delayed diagnoses, incomplete adherence to treatments, wasteful overuse of drugs and technologies, and coordination and safety problems.

Even worse, aside from "care process," which tracks metrics related to preventative care and consistent engagement with the same family doctor over long periods of time, the U.S. scored last (or thereabouts) in every single category of the study.

Adding insult to injury, these poor results come despite the fact that America spends roughly 60% more on healthcare, as a percentage of GDP, than the other countries in the study...

...a metric that will only get worse when the study is updated again in 3 years as we"ve recently shown that healthcare premiums have surge roughly 100% since 2013 (note that the cost portion of this latest study ended with data collected in 2014).

Can anyone spot the outlier?

But sure, we should probably just leave everything as is...Obamacare seems to be working just fine.

It's Official, Obamacare Collapse Is Trump's Fault - Just Ask The WA Insurance Commissioner

Last night, Washington"s Insurance Commissioner Mike Kreidler sent out a press release noting that two counties in his state, Klickitat and Grays Harbor, would be left with no health insurance options in 2018.  Per the press release, the ~3,330 people in those counties currently signed up on the exchange would be able to buy insurance through the state"s high-risk pool but they would lose access to taxpayer-funded subsidies.

Currently, no insurer has filed plans in two counties – Klickitat and Grays Harbor.

As of March 2017, 1,119 people in Klickitat County and 2,227 in Grays Harbor County were enrolled in the individual market.

Under current state law, if no health insurer is available in a particular county, the only coverage option is through Washington state’s high-risk pool, WSHIP. However, because WSHIP is not a qualified Exchange insurer, subsidies would not be available.

And while it"s not terribly surprising that the Obamacare markets are collapsing in the state of Washington (they"re collapsing everywhere, just see here, here and here for a couple of examples), what is somewhat "surprising" is that Washington"s Insurance Commissioner has decided to place the full blame for Obamacare"s collapse, which has been ongoing and obvious for several years now, at the feet of the Trump administration.

“I’m deeply troubled by the changes we’re seeing for next year’s health insurance market,” said Kreidler. “The proposed drop in insurers and coverage areas clearly indicates to me that the uncertainty the Trump administration and the GOP-controlled Congress has sowed for months is sabotaging the progress we’ve made. Their actions, including failing to commit to fund the cost-sharing subsidies, not enforcing the individual mandate, and continuing to push in secret the severely flawed American Health Care Act are eroding confidence health insurers have in the market here and across the nation. These actions only increase premiums and decrease insurer participation.

“The Affordable Care Act has worked in Washington state because we fully embraced the reforms it offered – including expanding Medicaid and creating our own state Exchange. These decisions helped increase competition, provided better coverage and access, and fueled the largest drop in our uninsured in decades. Much more could be done to improve upon our progress, but that would take congressional action focused on shoring up the law, versus taking it down.

“For months, we’ve worked closely with our health insurers and other stakeholders in a concerted effort to try to explain to the Trump administration and congressional leaders what the impact could be to our market and most importantly, to our consumers, if this level of uncertainty and volatility continued. Today, our predictions came true."

And while we have every confidence that Kreidler would never attempt to mislead the residents of his state and/or engage in outright fearmongering for political purposes, we would kindly remind him that the insurance markets in his state, much like the rest of the country, collapsed in the 2017 plan year.  Moreover, even though he should be aware, Kreidler seems to forget that 2017 participation and plan rates were set in the summer of 2016, when Hillary was expected by almost every pollster in the country to be on the verge of a blowout victory.

We would also remind the Commissioner that lawsuits challenging the constitutional basis of Obama"s healthcare "penalties", which are mandatory and kinda sorta behave like...oh we don"t know....a tax, also started long before Trump took office.  But sure, it"s Trump"s fault. 

Americans' Self-Contradictory Views Of Socialized Healthcare

Authored by Eric Zuesse via The Strategic Culture Foundation,

Majorities want single-payer, but not from the government

58 % of Americans want «Replacing the ACA with a federally funded healthcare program providing insurance for all Americans». Only 37% oppose it. A tiny 5% have no opinion. That’s from a Gallup poll published 16 May 2016, «Majority in U.S. Support Idea of Fed-Funded Healthcare System».

However, on 20 November 2014, Gallup headlined «Majority Say Not Gov"t Duty to Provide Healthcare for All» and reported that, «For the third consecutive year, a majority of Americans (52%) agree with the position that it is not the federal government"s responsibility to ensure that all Americans have healthcare coverage. Prior to the start of Barack Obama"s presidency in 2009, a majority of Americans consistently took the opposite view». But if it’s «not the federal government"s responsibility to ensure that all Americans have healthcare coverage» (presumably meaning for all basic healthcare but not for vanity medical services such as «tucks» and other non-health-related medical services), then «a federally funded healthcare program providing insurance for all Americans» makes no real sense at all.

Is it likely that majorities really do want single-payer, but not from the government? Hardly: a gratuitous addition of stockholders’ profits into the costs for providing essential and economic-productivity-enhancing healthcare services that everyone should have access to if it’s really needed (lawfully prescribed etc.) will not only distort the incentives to medical-services providers (and so reduce both health and economic productivity), but will also waste the money of medical consumers (government or otherwise). But what about having ‘non-profit’ firms provide the single-payer services? That cuts out profits, and so eliminates the distortions that stockholders’ wants will introduce into the providing of any services (wants such as stockbrokers have, who pump the investments that pay them the highest commissions, which necessarily harms their investors). However, the top executives even of ‘non-profit’ firms can pay themselves whatever their friends who sit on their board of trustees will approve; and so a ‘non-profit’ too can be, at least to that extent, a scam. (And, of course, in an entirely free market, there is no regulation and therefore scams will be routine; so, only crooks would want that, anyway.)

These are the reasons why the countries that have the highest life-expectancies, and therefore the best health-outcomes, are the same as the countries that have socialized basic healthcare services, paid for normally entirely through taxes and provided to all citizens as a basic human right instead of as a privilege that’s available only to individuals who can afford it. (Of course, «tucks» and such get charged extra to the patient.) The United States has by far the costliest health care in terms of not only what Americans pay for it but in terms of healthcare costs as a percentage of GDP, and yet the U.S. has the lowest life-expectancy of all OECD countries; the U.S. has the most-free-market healthcare, and also the worst healthcare, among all of the economically developed countries — all (except the U.S.) of which provide guaranteed basic healthcare services to all citizens: essential services free as a right, not charged as a privilege.

America’s combination of the worst healthcare plus the by-far-costliest healthcare is no coincidence; and healthcare profits in America are the world’s highest, so, the present American system is terrific for those stockholders (whose firms hire the lobbyists and their politicians who write America’s healthcare-laws). Because basic healthcare in the United States is a privilege instead of a right, the U.S. is the only economically developed nation that does not have universal coverage, health insurance for 100% of its citizenry, healthcare as a guaranteed right instead of dependent upon the patient’s ability-to-pay. When Barack Obama entered the White House, the uninsured rate was 14.6%; when he left office it was 10.9%; the insured rate when he started was 85.4%, and it was 89.1% when he left office. His repeated promises of «universal coverage» were lies. His plan was in no way designed for «universal coverage»; that promise was just a lie.

In the OECD’s «Health at a Glance 2015» (which is their latest version of that, and covers actually 44 nations), the United States scores at or near the bottom for almost all indicators of healthcare-quality, including: Life expectancy, Access to care, Quality of care, Doctors per capita, and Hospital beds per capita. We are by far the highest on Pharmaceutical expenditure per capita. Oddly, three nations, Czech Republic, Slovakia, and Hungary, are exceptionally high in both their heart-disease death-rates and their cancer death-rates; plus their life-expectancies are even lower than America’s, and their most carefully medically calculated measured «Quality of care» rankings are also generally as bad as the United States. However, in the latest calculated year, which is shown there, which was 2013, «Health expenditure per capita» (p. 165) was U.S. $8,713; Czech Republic $2,040, Slovak Republic $2,010; and Hungary $1,719.

So, America’s was over four times as high as the healthcare costs of other countries in its class — i.e. in the overall worst class. Generally the top-performing nations were: Japan, Finland, Norway, Sweden, Italy, and Switzerland. Switzerland was the second-highest in cost-of-care, $6,325, right below the U.S. Norway was third-costliest, $5,862. Sweden fifth-costliest, $4,904. Japan 14th-costliest, $3,713. Finland 17th-costliest, $3,442. Italy twentieth-costliest, $3,077. The average OECD cost for all the 44 nations was $3,453. Whether Obamacare would change any of those U.S. rankings is too early to tell. However, the U.S. is such an extreme «outlier» so that our healthcare system would need to be replaced root-and-branch in order to be competitive with any other nation’s in terms of delivering value-for-the-money, instead of rip-off (which is its existing outlier status — unparalleled by any other country’s, for delivering lousy value).

It is so bottom-of-the-barrel, that it is below the barrel. This is by far the world’s most-free-market healthcare system, but our government spends more per-capita on it than do other nations’ governments that pay almost all of their citizens’ healthcare costs. In fact, as shown in the chart «9.3. Health expenditure as a share of GDP, 2013 (or nearest year)» on page 167 of that OECD report, the U.S. is the only country where the private sector pays more of the nation’s healthcare costs than does the public sector, the government.

No other nation comes anywhere close to that degree of non-governmental providing of the healthcare function. Every other nation has socialized the healthcare-function to a vastly higher extent than the U.S. has. That’s how corrupt America is: history, the data, are still ignored here, even when every other nation accepts those realities and has long-since implemented them in national policies.

Lots of other countries are more corrupt in the pettier forms of corruption such as bribery, but perhaps few match America’s higher-level, and far more complex, systemic corruption.

Forget ObamaCare, RyanCare, Or Any Future ReformCare - The Healthcare System Is Completely Broken

Authored by Charles Hugh-Smith via OfTwoMinds blog,

It"s time to start planning for what we"ll do when the current healthcare system implodes.

As with many other complex, opaque systems in the U.S., only those toiling in the murky depths of the healthcare system know just how broken the entire system is. Only those dealing daily with the perverse incentives, the Kafkaesque procedures, the endlessly negative unintended consequences, the soul-deadening paper-shuffling, the myriad forms of fraud, the recalcitrant patients who don"t follow recommendations but demand to be magically returned to health anyway, and of course the hopelessness of the financial future of a system with runaway costs, a rapidly aging populace and profiteering cartels focused on maintaining their rackets regardless of the cost to the nation or the health of its people.

Ask any doctor or nurse, and you will hear first-hand how broken the system is, and how minor policy tweaks and reforms cannot possibly save the system from imploding. Based on my own first-hand experience and first-hand reports by physicians, here are a few of the hundreds of reasons why the system cannot be reformed or saved.

Say 6-year old Carlos gets a tummy-ache at school. To avoid liability, the school doesn"t allow teachers to provide any care whatsoever. The school nurse (assuming the school has one) doesn"t have the diagnostic tools on hand to absolutely rule out the possibility that Carlos has some serious condition, so the parents are called and told to take Carlos to their own doctor.

Their pediatrician is already booked, so Carlos ends up waiting in the ER (emergency room). Neither the school nurse nor the parents see the symptoms as worrisome or dangerous, but here they are in ER, where standards of care require a CT scan and bloodwork.

Hours later, Carlos is released and some entity somewhere gets an $8,000 bill--for a tummy-ache that went away on its own without any treatment at all.

Since the Kafkaesque billing system rewards quick turn-arounds, observation is frowned upon unless it can be billed. So if observation is deemed necessary (to avoid any liability, of course), Carlos might be wheeled into an "observation room" filled with other people, where a nurse pops in every once in a while. This adds $3,000 to the bill.

(Never mind the stress on Carlos being in such unfamiliar surroundings; he might have felt better if he hadn"t been subjected to the anxieties that come with being enmeshed in the healthcare system"s straight-jacket of standards of care.)

If Carlos doesn"t feel better after all this, then the bill is set to balloon bigtime because an overnight stay in the hospital is the next step--and if there isn"t a 100% certainty that there is no chance of his stomach-ache becoming something serious, then the system will insist on overnight observation as the only legally defensible option.

There are other ways to increase the fees without actually providing additional care; was Carlos receiving "critical care"? Of course he was, because, well, it pays better, and by definition any ER visit is critical care.

This example is just the tip of the iceberg, but you get the point: all institutional care decisions ultimately revolve around thwarting future liability claims and maximizing the billing value of each interaction or procedure.

You"ve probably seen some of the racketeering that passes for "business as usual" in the pharmaceutical arm of the "healthcare" industry. A pharma company that spent $500,000 trying to keep pot illegal just got DEA approval for synthetic marijuana (via Chad D.)

Pinworm prescription jumps from $3 to up to $600 a pill (via John F.)

Off-patent medications double or triple in cost, and then double or triple again with a few years, without any justification. To extend expiring patents, Big Pharma corporations petition the FDA to change the target audience for the med, and this trivial administrative change awards the corporation years more of lucrative patent protection.

The scams are endless, the skims are endless, the fraud is endless, the waste is endless, the fortunes expended to limit "winner take all" liability claims are endless, the paperwork churn is endless and the perverse incentives and negative unintended consequences are endless.

Everyone knows the system is unsustainable, perverse and insane, but they are powerless to change it within the system as it is. The usual sort of political horsetrading that passes for "reform" yielded ObamaCare, which did essentially zero to limit costs or cartel rackets.

A system based on parasitic predation by all the cartel players cannot be reformed or saved from its own perverse incentives and skyrocketing costs. The foundations of U.S. healthcare are rotten to the core. "Reform" is an appealing delusion, but the rot is so deep and so pervasive it is embedded in the society and the culture, beyond the reach of legislative overhauls, no matter how well-meaning.

This chart-fest reflects the trends that cannot be reversed by policy tweaks and tucks: The U.S. spends more than twice as much per person than our advanced competitors such as Japan and France.

The U.S. spends 2.5 times more per person than the OECD (i.e. the industrialized nations) average:

Wages have risen 16%, GDP rose 168%, and healthcare soared 818%. Do you reckon wage earners might have a hard time paying for healthcare nowadays?

If healthcare had risen only as much as official inflation, each household would be saving $10,000 per year--$100,000 each decade. $100K here and $100K there, and pretty soon you"re talking real money in a conventional wage-earner household budget.

Projections of skyrocketing Medicare and Medicaid program costs guarantee national bankruptcy. The projection of 90 million Medicare enrollees is predictable, but there is no reason to believe costs will be limited to $20,000 per enrollee annually.

U.S. healthcare costs more in every category than other healthcare systems. Tweaking policy in one slice does nothing to limit the staggering increases being logged in all the other tranches of the system.

America"s healthcare system is the perfection of the fraud triangle: the pressure to increase billings, fees and profits is immense, the rationalizations are unlimited (it"s within the legal guidelines, etc.) and the opportunities for fraud are equally unlimited.

Individual caregivers and administrators want a different, better role and a better outcome, but each is trapped in the system as it is--and reform is impossible given the systemic foundations, incentives and legal framework.

It"s time to start planning for what we"ll do when the current system implodes. We might start by considering The "Impossible" Healthcare Solution: Go Back to Cash (2009).

America's #1 Again (In Healthcare Costs Around The World)

While the American Healthcare Act, President Trump’s first major legislative effort, is going to a vote in the House of Representatives on Friday - no matter what; for many years now, the American healthcare system has been flawed.

As Statista"s Feliz Richter illustrates in the chart below, U.S. health spending per capita (including public and private spending) is higher than it is anywhere else in the world, and yet, the country lags behind other nations in several aspects such as life expectancy and health insurance coverage.

You will find more statistics at Statista

USA, USA, USA!

House Republicans Release Plan To Repeal and Replace Obamacare: Key Highlights

Update: A seemingly angry (judging by the tone) Senate minority leader Chuck Schumer obviously had to lash out and dismiss the Republican"s plan for "TrumpCare"...

"Trumpcare doesn"t replace the Affordable Care Act, it forces millions of Americans to pay more for less care. This plan would cut and cap Medicaid, defund Planned Parenthood, and force Americans, particularly older Americans, to pay more out of pocket for their medical care all so insurance companies can pad their bottom line.

It cuts taxes on the rich to make middle class families pay more. To make matters worse, this sham of a replacement would rip treatment away from hundreds of thousands of Americans dealing with opioid addiction, breaking the President"s word that he would expand treatment, not cut it.

This bill is a giveaway to the wealthy and insurance companies at the expense of American families, and Senate Democrats will work hard to see that it is defeated."

Wow, sounds like a nightmare. Let"s see what the bill actually says.

As we detailed earlier, on Monday afternoon, House Republicans in both the Ways and Means and Energy and Commerce committees, unveiled their long-awaited legislation as part of House Republicans effort to repeal and replace Obamacare through the reconciliation process. The measure would roll back the government"s health care role and is expected to result in fewer people having insurance coverage; however, due to strong opposition among key republicans to the proposed plan, there is a high likelihood the bills will not pass in their current form.

Upon releasing the legislation, House Energy and Commerce Committee Chairman Greg Walden said: “After years of Obamacare’s broken promises, House Republicans today took an important step. We’ve spent the last eight years listening to folks across this country, and today we’re proud to put forth a plan that reflects eight years’ worth of those conversations with families, patients, and doctors. Simply put, we have a Better Way to deliver solutions that put patients – not bureaucrats – first, and we are moving forward united in our efforts to rescue the American people from the mess Obamacare has created.

“With today’s legislation, we return power back to the states - strengthening Medicaid and prioritizing our nation’s most vulnerable. We provide the American people with what they’ve asked for: greater choice, lower cost, and flexibility to choose the plan that best suits their needs. Today is just the first step in helping families across this country obtain truly affordable health care, and we’re eager to get this rescue mission started.”

The plan would dismantle the key aspects of ObamaCare, including subsidies to help people buy coverage, the law"s fines on people who don"t purchase health insurance, the expansion of Medicaid, and drop the plan to tax employer-sponsored plans. The bills can be found here and here.

A breakdown of core aspects removed from the existing law (courtesy of Axios):

• All Obamacare taxes


• All Obamacare subsidies, including its premium tax credit


• Individual, employer mandate penalties


• "Cadillac tax"


• No longer will limit the tax break for employer-sponsored health coverage


• No payments to insurers for cost-sharing reductions


• Selling insurance across state lines (can"t be done in the "reconciliation" bill)


• Medical malpractice reform (can"t be done in the "reconciliation" bill)

What is being added:

• Pre-existing condition coverage


• Continuous coverage — 30 percent penalty if people don"t keep themselves insured


• Special fund to help states set up "high-risk" pools, fix their insurance markets, or help low-income patients


• Enrollment in expanded Medicaid will be frozen


• Current enrollees can stay until 2020, and keep getting extra federal funds, until they leave the program on their own


• Medicaid will change to "per capita caps" (funding limits for each person) in fiscal year 2020


• A new, refundable tax credit will be available in 2020 to help people buy health insurance


• Covers five age groups — starts at $2,000 for people in their 20s, increases to $4,000 for people in their 60s


• It"s not means tested, but phased out for upper-income people (starting at $75,000 for individuals, $150,000 for families)


• Insurers can charge older customers five times as much as young adults

At its core, in place of the existing Affordable Care Act legislation, republicans will implement a system centered on a tax credit to help people buy insurance.  That tax credit would range from $2,000 to $4,000 annually  increasing with age. That system would provide less financial assistance for low-income and older people than ObamaCare, but could give more assistance to younger people and those with somewhat higher incomes.

Democrats have warned that between the phasing out of ObamaCare’s Medicaid expansion and the smaller tax credit for low income people, coverage would be put at risk for many of the 20 million people who gained it from ObamaCare. As The Hill adds, Republicans acknowledge that their plan will cover fewer people, but note that unlike ObamaCare, they are not forcing people to buy coverage through a mandate. They say their system is less intrusive and provides people a tax credit without mandates or a range of tax increases.

While some republicans such as House Ways and Means Chairman Kevin Brady are confident the bill will pass with full Republican support despite recent party infighting over the details, the measure faces a rocky path, particularly in the Senate.

Earlier on Monday, four Republican senators - Sens. Rob Portman, Shelley Moore Capito, Cory Gardner and Lisa Murkowski - objected to an earlier version of the House bill, saying that it failed to protect ObamaCare’s Medicaid expansion, saying they won"t support a bill that takes the same approach to the program as a leaked Obamacare repeal and replacement bill did. However, under the proposed bill, the repeal of the Medicaid expansion would not take effect until 2020, and Republicans would grandfather in current enrollees so that they can stay on the program. Once 2020 arrives, the federal government will no longer provide the extra federal funds that allow for expansion.

As this is unlikely to solve the senators" problems with the bill, the proposed plan may be dead on arrival.

That plan has drawn objections from more centrist Republican senators too, who want to protect the expansion and are worried about constituents losing coverage and their states losing federal funds. 

House Republicans have also objected to the plan, with Conservatives in the House Freedom Caucus calling the bill"s tax credit is a “new entitlement.” They have enough votes to kill the bill, but it remains to be seen whether they will actually vote against it.

As previously leaked, the bill would maintain ObamaCare’s protections for people with pre-existing conditions, who could still not be denied coverage. Instead of ObamaCare’s mandate, the bill would seek to incentivize healthy people to sign up by allowing insurers to charge people 30 percent higher premiums if they have a gap in coverage. The measure also repeals ObamaCare’s taxes, such as the medical device tax and health insurance tax, starting in 2018.

Finally, The Hill also notes that the bill scraps a controversial Republican proposal in earlier drafts to start taxing some employer-sponsored health insurance. Instead, the measure would keep ObamaCare’s "Cadillac tax" on generous healthcare plans starting in 2025, in order to prevent that legislation from adding to the deficit in that decade.

House committees planned votes on the legislation Wednesday at 10:30am. That will launch perhaps the year"s defining battle in Congress, and GOP success is by no means assured because of internal divisions.

Mad As Hell

Fair warning, my family just received a 61.5% increase in our healthcare insurance premium of 2017, on top of last year’s 24.8% increase, so I am quite annoyed at the moment.  For my non-US readers, perhaps what follows will interest you as a means of understanding how and why Donald Trump came to be elected President.  I am going to be channeling some of my inner crank today.

If you want to understand why Trump won the recent US presidential election, you can"t overlook the economic data.  If you do, his victory may look mighty confusing, alarming even.  But once you understand the degree to which the average US family and the entire Gen-X and Millennial generations are being completely hosed economically, everything starts to take shape.

As most struggling Americans can tell you, real household income has gone nowhere for more than 20 years:

This multi-decade burden of "running ever faster just to stay in the same place" is what led many US voters to reject Hillary Clinton, the establishment candidate, and instead roll the dice on the iconoclast promising to upend the system.

But if Trump"s plan to “make America great again” means a return to the 1980s and 1990s when median real incomes climbed smartly, he’s not going to be able to pull that rabbit out of the hat, I’m afraid.  None of the conditions in place then are with us today including cheap, abundant energy (remember, oil was $10 a barrel in 1998); not to mention that we were riding the tailwinds produced by all of the gains from the early, explosive stage of the technology and internet revolutions.

Instead, we"re at a stage where the pie is no longer expanding -- it"s now a zero-sum game where those with power are using their advantage to continue to increase the size of their slice at the expense of the rest of us. The US now routinely subjects its citizens to racketeering, charging excessive prices that are increasingly cumbersome to avoid. One example among thousands; a Viagra pill that costs less than $1 in India, costs over $38 in the US:

(Source)

Cell phone plans in the US are 2x to 3x more expensive (and more limited in terms of both data and speed) than any of the other countries I’ve traveled to in the past few years.  A phone bill from AT&T in Hong Kong is a single page long and clearly explains how your unlimited high speed plan ended up costing you around $30/mo. In contrast, my bill from the same company in the US runs about 30 pages, and seems intentionally opaque in helping me understand why I"m spending over $100/mo for a limited data plan with much slower speeds.

There"s no good reason for this except that in the US, companies have learned they can get away with predatory tactics by “wearing down” customers with gigantic, indecipherable billing statements.

This is pure racketeering. Your phone carrier is counting on your cable company to be running the same complexity scam.  Ditto especially for all of your insurance providers whom you just know, in your heart, you"ll have to battle ferociously with for what you"re owed should you ever need to really use that coverage.

And it"s not just corporations; the government is in on the action, too. The US tax code is now over 74,600 pages in length, and the IRS cannot even get close to answering questions accurately.  Yet the citizen is on the hook for getting everything exactly right or else incurring stiff penalties, necessitating the use of expensive CPAs -- which is still no guarantee that an auditor"s subjective judgment might go against you. 

Fun fact: during the first 26 years of its existence, the US income tax code grew by 104 pages. Over the past 30 years, it has grown by 50,000 pages.

While our politicians to expand the tax code, as far as I know nobody from any US government agency has been at all interested in the obvious price collusion displayed in this chart:

(Source)

Believe it or not, there are two price lines on this chart (one red, one blue) from supposedly independent companies who are allegedly competing with each other -- but most clearly are not. Humalog and Novalog are both manufactures of injectable insulin.

Insulin is an absolutely vital, non-substitutable necessity for people with diabetes and these companies saw fit to collude and jack up the prices over 1000% in ten years, from $25 a vial to over $250.

Why would two separate companies maintain the exact same price for their competing products for 20 years? I don’t have any other explanation except for collusion.

In any sane, rational and caring nation this wouldn"t have happened. But under Bush, and then Obama, such predatory behavior went completely uninvestigated let alone punished. 

So it"s no wonder then that so many people looked at the ‘status quo’ candidacy of Hillary Clinton and said No thanks.  Many families cannot afford more years of status quo predation by the unchecked rapaciousness of US cartels -- er, corporations -- and their government protectors.

Look, we all knew that the faux recovery seen over the past seven years had to end sometime, sooner or later. A “recovery”, mind you, that never actually happened except in the fantasy press releases of the government"s statistical fabricators, lovingly reproduced by unquestioning “journalists” working for corporate entities harboring deep conflicts of interest.

But the “little people” (hereby defined as those occupying the bottom 95% of the socioeconomic ladder) have long known they"ve been getting screwed. Sadly, it"s just getting worse.

The Obamacare Disaster

Obamacare (a.k.a. the Affordable Care Act) is a disaster. We always knew it was going to be. Why? Because it represents the single largest give-away to the health insurance industry in our lifetime. 

Obama and the DC politicians crafted the Affordable Care Act as a monstrously large bill. And they failed to take on the biggest source of fat in the entire system: the healthcare insurance companies themselves. Of course, these companies have very well-funded lobbyists and  pushing back against them on would have required real leadership and possibly cost some political capital.  So they were left entirely alone, with all of the massive increases in healthcare premium costs left to be borne by “somebody” other than them.

Well that “somebody” has turned out to be pretty much everybody:

Obamacare Benchmark Premiums to Rise 25% in Sharpest Jump Yet

Oct 24, 2017

Monthly premiums for benchmark silver-level plans are going up by an average of 25 percent in the 38 states using the federal HealthCare.gov website, the U.S. Department of Health and Human Services said in a report today.

Last year, premiums for the second-lowest-cost silver plans went up by 7.5 percent on average across 37 states.

(Source)

Now what’s both fascinating and part of the electorate anger is that the same government that forced Obamacare on everyone is also the same government that swears that health care inflation is running at only 2.5% to 3.5% per year over the past few years. Here are the governments numbers:

(Source)

I find myself wondering what country (or planet?) those numbers are for. Because for those who actually pay for their health insurance, the answer for sure isn"t either "America" or "Earth".

In total, US health care premiums have fully tripled since 1999.

But for fun, using the government’s own CPI-Med data from the table above, if healthcare premiums had tracked the government’s stated rate of inflation between 2006 and 2015 then they would be some $2500 less today than they actually are:

People are angry because they are being lied to. Or more accurately: lied to while being robbed. 

Even worse, while the rate of health care inflation is being understated at the individual premium level shown above, it"s also wildly understated in the larger inflation statistic used to level-set everything from cost-of-living adjustments (COLA) to pay raises across the country.

As explained in the Fuzzy Numbers chapter of The Crash Course, even though healthcare spending is nearly 18% of GDP, for some reason healthcare comprises only 5.85% of the CPI basket:

[C]urrently CPI-MED accounts for 5.825% of the overall CPI. Increases in the share of medical expense paid by individuals (as opposed to their insurers), will not affect CPI levels. 

(Source)

And:

U.S. health care spending grew 5.8 percent in 2015, reaching $3.2 trillion or $9,990 per person.  As a share of the nation"s Gross Domestic Product, health spending accounted for 17.8 percent.

(Source)

Does it make any sense to record something that"s nearly 18% of GDP as only 5.8% of your inflationary experience? Nope, it sure doesn’t. Unless your desire is to mask the actual rate of inflation.

In simple terms, just healthcare"s share of inflation alone comes to (0.25)*(0.18) = 4.5%.  That’s more than twice the rate of the supposed total inflation we are experiencing all by itself.  Throw in rising rents, car prices, and energy and it’s far more likely that an urban consumer is experiencing total price inflation closer to 6% or more per year.

Now, if you were a government bean-counter who want to mask the impact of a rapidly-rising factor within the nation’s inflation rate, presumably to blunt the statistical damage and make things look rosier than they actually are, all you need do is weight that item less in the basket used to calculate inflation.

For example, if the vegetables making up 18% of the cost of your shopping cart have gone up in price by a whopping 25%, that’s going to leave a mark. 

But what the government does is pretend that your shopping cart only has 6% vegetables, and is increasing at a much lower annual rate -- say 3.2%. Voila! Reported price inflation for carrots and celery is now much lower: (0.06)*(0.032) = 0.12%.

Even though you"re forking out 4.5% more at the grocery counter, the government is loudly telling everyone you"re only seeing an increase of 0.12% 

This is infuriating, of course. 

Here’s what this looks like in chart form. Total inflation is being sold to us as low – "too low" and "dangerously low" even. But I’ve helpfully included where the chart would show the total rate if were only what we"re seeing with health care costs:

(Source)

Imagine how much higher it would be if we added in the actual inflation observed in other costly sectors like food, housing and education. Obviously there’s something desperately wrong going on here.

This is statistical lying and weaseling of the worst sort, which of course everyone can see through because it gets harder and harder each year to balance the family budget. If you"re alarmed by fake news, perhaps you should be more alarmed by fake data, something the US government has perfected and continues to perpetuate. 

All of this is deeply unfair. And -- surprise! -- people really get annoyed when they"re constantly lied to. Eventually their trust goes right out the window. Is it any wonder that a profoundly status quo candidate (HRC) could not sway the voters in rural America, where these trends and insults are even more acutely felt than in urban areas? The status quo is figuratively and literally killing these people. 

As mentioned earlier, my family"s health care plan premium went up over 60% in cash costs alone this year. The rate of increase is an even larger when the plans" reduced benefits and increased deductibles are factored in. The out-of-pocket amount for my family will be pretty close to $30,000 this year before any insurance actually kicks in.

In other words, I"m subsidizing somebody.

Unfortunately, that somebody is probably not a lower-income person up the street who badly needs coverage, but rather someone in the C-suite at one of the major heath companies. 

Check out the 2013 compensation packages for the CEOs of the major US health insureres.  They"re truly breathtaking:

Maybe 2013 was a standout year, and is an errant data point.  Maybe things moderated in 2014? 

Nope.  Everybody apparently deserved an even more massively large payout:

You have to wonder how much care was denied to patients in order to afford those executive salaries.  It also bears mentioning, that some of these CEOs ‘earned’ more by 10:30 a.m. on the first day of 2014 than the median household did during that entire year.

Put a different way, in order to pay out the compensation for Stephen Hemsley, the United Health CEO for 2014, nearly 4,000 families had to pay the full $16,351 amount for healthcare that year.  In what sort of world should 4,000 families have to pay close to a third of their total income to a single individual simply for the pleasure of having health insurance?

Greedy doesn’t begin to cover what’s going on here. If ever there was any sort of "social contract" between these companies and the public, it"s now utterly broken by the rewarding their upper management with tens of millions of dollars – each! – and then jacking up healthcare premiums on families simply because they can.  And now, thanks to the "Affordable" Care Act, you can now be fined for not forking over whatever insane price increases the healthcare cartel decides to dream up from their government protected boardrooms.

Bizarrely, the healthcare insurance options in many states have been vastly reduced as carriers claiming losses, while massive premium increases have been justified also on the basis of losses and reduced profits. I say "bizarrely" because you’d imagine, being a regular person, that such losses should show up in actual profit declines for the insurers.

Nope:

Making a killing under Obamacare: The ACA gets blamed for rising premiums, while insurance companies are reaping massive profits

Oct 28, 2016

While Americans continue to be hammered by rising health care costs, and while congressional lawmakers (with their taxpayer-subsidized health care) do nothing to lower the cost of pharmaceuticals and medical care, one group is reaping a windfall in profit: health insurance companies and their investors.

On Thursday, Aetna reported $734 million in profit on $15.8 billion in revenue for the three months that ended Sept. 30. The nation’s third-largest health insurer by revenue handily beat Wall Street estimates for the quarter.

Aetna’s earnings report came a week after UnitedHealth reported a 12 percent jump in revenue to $46.3 billion for the three months that ended Sept. 30 compared with the same period the previous year. The company collected $36.1 billion in insurance premiums, a sum 11 percent higher than for the year-ago quarter, while profits increased 29 percent to $1.98 billion.

A Salon analysis of regulatory filings found that the top five health insurers — UnitedHealth, Anthem, Aetna, Humana and Cigna — have doled out nearly $30 billion in stock buybacks and dividends from 2013 to 2015. (The Supreme Court ruled in favor of the Affordable Care Act in 2012.)

(Source)

Similar strong results were noted for Humana in their last earnings release.  So how can it be that all these companies are both reporting the need for massively higher premiums while also booking higher and higher profits?

Well, when you live in a country that routinely subjects its citizens to racketeering, this is exactly the sort of disconnect you have to live with. They say one thing; but you see with your own eyes, or experience with your own wallet, something completely different.

Conclusion

Obama’s main failing in the ACA was in not going directly after the powerful insurance industry and forcing its players to participate in the reduction of waste, and sharing in the costs. Instead, they got more than a free pass: they got millions of new enrollees with the right to ‘withdraw’ from any markets and exchanges where they felt their massive profits might take a ding. 

And withdraw they did, with 2 million people losing their coverage for 2017 due to major carriers pulling out of state exchanges. 

Just looking at the cost of healthcare alone, we can detect massive fraud and deceit being foisted on the American public today. What emerges from these many rackets is a corrosion of the social contract.  In a word, these arrangements are abusive.  

The enormous pressures we see across the globe, with the rise of what the mainstream news outlets (aka “largest purveyors of fake news”) are trying to label as ‘nationalism,’ are really in large measure simply a reaction to the economic oxygen having been sucked away from the populace of various countries and delivered into the hands of a very tiny elite.

Yes, that elite still controls the ‘news’ and therefore the narrative; but increasingly people are waking up and deciding for themselves that ‘something is wrong’. Not unlike a person slowly becoming aware that they have somehow fallen into and been the victim of an abusive relationship.

Let me be clear: if we do not somehow find the courage and appropriate leadership to begin righting these wrongs, this trajectory ends in tears.  And it shouldn’t be up to a government body to have to regulate proper action; the insurance companies themselves should have nobody but themselves to blame if they fail to self-regulate. 

Ditto for every major corporation that is running various rackets using a combination of predatory pricing, overly complex practices, and regulatory capture to operate as a cartel. 

If the elites don"t manage to figure out how to contain their greed, then an angry electorate is just the beginning of their troubles.  Anybody seeking to understand the political landscape really just needs to spend a little time on the eroding prosperity of the bottom 99% over the past 20 years.

In Part 2: How To Fix The Future we lay out how a critical movement is arising at this time in history. Each of us can assume a role to play in its formation and development, and therefore its eventual success or failure. It"s my personal belief that we are past the time where we can avoid major disruption, so each of us must be personally prepared as best we can for upheaval, while also working towards building a new and better narrative to live by.

Do you have the courage to participate?

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)