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Medicare -- The Mammoth in the Living Room

Medicare -- The Mammoth in the Living Room

5 Mins
May 9, 2011

October 2009 -- Is there an adult in the house? Are we all operating with one collective mind, or are there still those who possess reasoning ability? How can rational leaders and legislators believe that we can keep piling debt on debt and survive? That they can all be that stupid is not plausible. More likely, it is that some actually want to abort our capitalistic system, and others just don’t have the political courage to tell it like it is. Somebody needs to say it: we can’t afford it!

Our country is broke! The reason? The government’s “creative accounting” system, that has allowed us to deceive ourselves into thinking that we can perpetually afford gargantuan social programs, is now starting to blow up in our faces. The enormous amount of unfunded debt for entitlement programs has reached a critical level that has the whole world worried that the US is going under.

And the mammoth in the living room is Medicare. None of our leaders have the fortitude to tell us that we can’t afford Medicare, let alone a total socialization of our health care system. Medicare, Medicaid, Social Security, and Federal pensions are unfunded to the tune of $109 trillion, that’s $109,000,000,000,000! All with Medicare leading the way. (Source:  The 2009 Social Security and Medicare Trustees Report )

When the President says we need to “reform” health care immediately, he is neglecting to mention that “reform”is code for rationing. And, if you hear fear in his voice, it is because Medicare is has brought us to the brink of outright disaster. David Walker, former Chief of the GAO, is on record saying: “If there is one thing that could bankrupt us, it is health care costs. We are the only country in the world that writes a blank check for care, and that is mindless and it must end.”
Mindless! There isn’t a more apt word to describe Medicare. Since its inception, there has really been no visible way to pay for it. Medicare is supposed to be a trust fund and it is—depending on what the meaning of “trust” is. In law, or business, a trust is simply something of value held by one for another, usually an interest bearing instrument that increases in value. That isn’t quite how the Medicare “trust” works. The money collected from FICA and income taxes goes into the government’s coffer. From there, it is a matter of bookkeeping entries. Exactly how its various parts are supposed to be funded is too lengthy to consider here, but benefits are paid mostly from the general fund. When there is a deficiency, the government loans money to itself in the form of Treasury Bonds—even earning interest on the money it loans itself!

The point is that it is illusory accounting, the net effect of which is, that the government eventually has to borrow externally to meet its obligations, creating ever expanding deficits. And that surplus we've heard so much about?  According to Lawrence Huntoon, M.D., Ph.D. , “The ‘surplus’ in the Medicare Part A Trust Fund never existed! It was nothing more than an Enron-style accounting gimmick. As part of the Balanced Budget Act of 1997, Congress shifted one of the fastest growing Medicare expenses, home health care costs, from the Part A Trust Fund to the Part B Trust Fund. Total expenditures remained unchanged”.

Edward Annis, M.D., a world renowned surgeon, former AMA President and long time Director for the Chamber of Commerce, was very instrumental in fighting against socialized medicine during the Kennedy Administration. He was on the scene when it passed under Johnson. He recalls how many were reporting that it was a major success, but that the opposite was true. Many doctors were so opposed that they refused to participate in the program. And millions of the insured didn’t want to participate in the program. When asked how seniors responded to the program,  he related an example:

"My mother and her friends in Michigan wanted to keep their Blue Cross/Blue Shield benefits and didn't sign up for Medicare. I remember the day she called me; I could tell she was in tears. She had gotten notice from the Blues that her insurance would be canceled on June 30. She asked where she could get insurance. “Nowhere,” she was told. She had to take the government program. When he was told that millions were not taking the program, Johnson became angry; he called the insurance companies and said, “I want you to stop insuring these people. I want this program to work.”

The problem is, no such program can ever work. For starters, it is essentially “free” to its users. When something is free, it is human nature to abuse it. It’s basic economics: “Free” = over consumption = demand = shortages = higher costs. Of course, it isn’t really free—we pay for it through our taxes and inflation. In the case of Medicare, though, it is so costly that we haven’t been able to pay for it with our taxes so we have, immorally, burdened our most productive citizens with enormous debt, now and for generations to come. So when politicians say they will “reform healthcare” and not raise taxes, ask yourself: does that make sense? How can that be? And even if you can’t see the immorality of soaking the rich, there isn’t enough wealth in the country to pay for Medicare—let alone through taxing that wealth.

Health care isn’t a right—rights are freedoms to act, not entitlements to take. Health care is, however, a necessity. And that is how it should be paid for—like any other necessity, e.g., food, water, shelter, clothing; we each must pay for our own, because each of our lives is our own.

Most Americans believe that somehow they have been paying for Medicare and that it is now their due. But think about it. The facts just don’t bear that out. A short stay in the hospital will likely exceed $20,000. An average bypass surgery costs $48,000 but often can exceed $150,000. None of us has paid in to the system anything like what it would cost for just one or two incidents. On the other hand, the only reason any surgery could cost that much is because of Medicare and its lack of accountability along the way.

Socialized medicine, which Medicare is, has been disastrous for our economy. If we expand it to the entire country it will do away with the last haven of medical freedom and innovation—not just for our country, but for the world. The failure of all socialist and totalitarian states has proven beyond all doubt that socialization is irrational, not to mention immoral. History and logic tell us that every growth in government leads to less wealth for all, and more control over each of our lives. With that knowledge being so clearly available to our legislators and leaders, it would be unconscionable to repeat such historical mistakes.

Undoubtedly there are those who do understand that socialization would bring about an inferior quality of medical care and economic ruination, but simply don’t care. They are willing to accept that in an attempt to create their idea of equality and “fairness”. Shall we opt for the lowest common denominator? Are the responsible, competent people of America to be crushed to make them equal to the irresponsible and incompetent?

Medicare has brought our country to its economic knees and nothing short of privatization of the health care system will save us. If we start by agreeing that we want to save our liberty, and acknowledging the facts, the path will become clear. Truth is always our ally and the only way to a real resolution.

Judy Kopulos
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Judy Kopulos
Health Care