He is correct that the programs need improvement but, realistically, that improvement can only come as part of a complete overhaul of the health care “system.” The main problem is that the United States is the only industrialized country in the world with no planned health care system. The health care crisis can only be addressed if it is made a higher priority of the people and Congress.
Since Medicare and Medicaid are supported by taxes, our overall tax and spending priorities have to be addressed if there is to be any hope of fixing them. The United States Government will spend $711 billion for the military in 2008. That is 48 percent of the total military spending in the world. We will spend more on our military than Russia, China, Europe, East Asia and Australia combined. On the other hand, we will spend $453 billion on Medicare and $223 on Medicaid in 2008 or $676 billion total.
Medicare is the federal insurance program to provide health care for the elderly. It is not a welfare program. All wage earners pay a portion of their employment taxes to the Medicare trust fund and recipients pay premiums and deductibles for coverage. Medicaid is a system to pay for health care for the poor. It is not just a federal program, rather, each state runs its own program and contributes its own money. That means every time there is a federal reduction of money available for Medicaid, there is more stress on the states’ Medicaid program.
So, when the U.S. cuts taxes and then finances the tax cut by reducing Medicaid payments to the states, the states have to pay more. Since Medicare provides health care for the elderly and Medicaid provides health care for the poor, it is the taxpayers who pay for the groups with the highest health care costs, while private insurers are able to focus on the groups with the highest profit margins, the young and healthy. In 2006, the six largest health insurance companies reported profits of over $11 billion. Of course, the profits were after paying the outrageous executive salaries. For example, the CEO of Aetna was paid $22.2 million, the CEO of Humana made 3.33 million and the CEO of United Health Care Group was given stock options worth $1.6 million on top of his multimillion dollar salary. If we were able to pool Medicare, Medicaid, and privately insured individuals, into one universal nonprofit insurance pool, we would save tens of billions of dollars
Because of our patchwork system of public and private health care, we waste about 30 percent of our total health care dollars just paying for administrative costs. Because pharmaceutical companies have an extremely effective lobby, the U.S. pays more for prescription drugs than any nation in the world. On average, Big Pharmas make a 20 percent profit and spend 30 percent of revenue on marketing. That means one half the cost of each pill you purchase goes to the stockholders or to endlessly run Cialis and Viagra commercials.
What all of this means is that there is no way to “fix” Medicare and Medicaid until we have the political will to take care of our own people. It amazes me that, as a nation, we are willing to allow people to go without health care, while claiming to be a Christian nation founded upon Christian principles. Maybe some should review Matthew 25, and consider how nations will be judged.
Richard Buley is a self-employed attorney whose office provides health insurance to eight employees. He writes from Missoula.
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