OMG! Another wrong, wrong, wrong message to you about Medicare.

Image result for the truth will set you free
It takes only two things to keep people in chains:
The ignorance of the oppressed and the treachery of their leaders.

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It simply is maddening, the misinformation you have been receiving about Medicare and Medicare for All.

Those of you who are on Medicare, and even those who are not, understand that the program is an insurance program. Let me repeat that: MEDICARE IS AN INSURANCE PROGRAM.

It takes the place of private insurance.

Like Blue Cross and Blue Shield, and other health care insurance companies, Medicare does not own hospitals, does not employ health care workers and does not own pharmaceutical companies. It is insurance.

You might expect that to be obvious to anyone who has not been living in a cave for the past 50 years, and it especially should be obvious to people who write articles about Medicare.

So, how can we explain the following article that appeared in Reason.com?

Most Americans Want Government-Run Health Care Until They Find Out the Government Will Run Health Care
And when they find out it means higher taxes, support crumbles further.
Eric Boehm|Sep. 12, 2017

Public support for single-payer health care is growing—in fact, a Kaiser Family Foundation poll in July found a majority of Americans support it—but that increase comes with an important caveat.

Most Americans only want government-run health care until they find out that it means the government will run their health care.

Wrong, wrong, wrong, and did I mention, wrong.

Medicare for All is not government run health care. It’s government funded insurance for health care. Is it really possible that the author, Eric Boehm doesn’t understand the difference?

An example of government run health care is the Veterans’ Administration, which is part of the U.S. Department of Veterans’ Affairs.

The United States Department of Veterans Affairs is a benefit system for veterans, their families, and survivors that is run by the federal government. As part of the benefit system, the VA owns and operates many VA hospitals across the country.

See the difference? If so, please contact Mr. Boehm at Eric.Boehm@Reason.com, and educate him.

Here is more nonsense from Mr. Boehm:

I thought about that this morning while reading J.D. Tuccille’s excellent piece asking, “Are You Sure You Want Medicare For All?”

He walks through the various ways government-run health care seems to be appealing—it means families no longer have to bear the cost of heartbreaking medical disasters on their own, for example—and the far greater number of reasons why government-run health care would be a fiscal, political, and medical disaster

Sorry to be redundant, but it isn’t “government run health care.” It is government funded health care.

No one says health care is “insurance company run,” so why do they talk about “government run”? There is a reason. It’s part of the scare tactics funded by the insurance industry.

Anyway, the hospitals still would be privately owned and operated. The doctors and nurses still would be privately employed. The pharmaceutical companies still would be privately operated. In short, health care would continue to be privately run, not government run.

Jumping through bureaucratic hurdles for the privilege of accepting substandard compensation isn’t as attractive as it might seem.

That may be why a growing number of physicians refuse to see Medicare patients, others limit the number they’ll accept, and more balk all the time.

Here, Boehm is onto something. The fact is that Medicare doesn’t pay doctors and hospitals enough. 

There is no financial reason for this. Unlike privately owned insurance companies, the federal government cannot run short of dollars. Medicare easily could pay doctors double, triple, or ten time what it now pays.

Here, the problem is the myth we often have discussed — the myth that the federal debt and deficit are too large, “unsustainable,” and should be reduced.

It’s utter nonsense, but it is the prevailing lie — the Big Lie — emanating from Congress and the insurance industry.

Under a single-payer system, options for medical providers may be more limited than they are now—there probably wouldn’t be any better-paying private insurers to take by preference to the government system.

There is no reason why options for medical providers may be more limited than they are now. Because the federal government is far better able to afford to provide options than are any private insurance companies, options should be greater with Medicare for All.

But there also wouldn’t be any private insurers to effectively subsidize Medicare patients.

In the case of a single-payer transition, doctors who find the terms of Medicare for All unacceptable may switch entirely to private-pay (if that’s still permitted), while some percentage will leave medicine entirely.

There is no reason why anyone needs to “subsidize” Medicare. Even the existence of today’s Medicare Supplement insurance is based on the myth that the federal government can’t afford to pay the entire bill.

A true Medicare for All program would provide free, comprehensive, no-deductible health care insurance for every man, woman, and child in America.

There is not a single financial reason why the federal government cannot provide such a program.

Sadly, Bernie Sanders has been afraid to say it. He proposed a so-called Medicare for All program that is financially limited.

Considering the potential for switching over to single-payer in The Atlantic, Olga Khazan predicts “Hospitals would shut down, and waits for major procedures would extend from a few weeks to several months.”

This is the classic scare tactic funded by the private insurance companies.  Even today, 60% of hospital patients are funded by Medicare, Medicaid, or other government programs:

  • Medicare: 40.9 percent
  • Medicaid: 17.2 percent
  • Blue Cross Blue Shield, other private insurance: 16.5 percent
  • HMO or PPO: 14 percent
  • Self-pay: 4.9 percent
  • Worker’s compensation and other government programs: 2 percent

And even with the unnecessarily stingy payments, most hospitals in America are thriving. (The ones having financial problems generally are the rural, smaller hospitals, and they simply are not receiving enough insurance money.)

Sen. Bernie Sanders (I-Vt.) and Sen. Elizabeth Warren (D-Mass.) are getting ready to unveil a Medicare-for-all scheme.

Expect that issue to feature prominently in the 2018 midterm election as Democrats try to win back control of Congress.

Expect it to be based on the Big Lie that federal deficit spending should be reduced.

Yet despite the Big Lie, that has caused ACA (Obamacare) to be an unnecessarily complex, convoluted Rube Goldbergian plan, still the program covers millions of people the private insurance industry did not cover.

Republicans have botched their efforts to repeal and replace Obamacare so badly that the threat of single-payer is real, and growing.

The “threat” of single payer? Does the use of the word “threat” leave any doubt that this article was written at the behest of the private insurance industry.

Yes, the private insurance companies regard single payer as a “threat,” and with good reason. Their high rates, high deductibles, plan limits, and their refusal to cover sick people and specialized medicines and expensive treatments has made them vulnerable to a plan that offers total, endless coverage for every person, and at zero cost.

That July Kaiser survey suggests that Americans aren’t actually ready to jump on the single-payer train. (The Sanders/Warren “Medicare-for-all” plan would not be a true national single-payer system, but would amount to putting more Americans into government-run health plans. Kaiser’s poll used both “single-payer” and “Medicare-for-all” interchangeably.)

So long as the right-wing debt hawks support the insurance industry rather than the public, and so long as they provide scare (false) information to the public — and so long as Bernie Sanders and Elizabeth Warren don’t have the courage to tell the public the truth —  we will see such poll results.

The public is being misled by the insurance companies and the debt hawks, and as we repeatedly have said (in previous posts):

Image result for breaking chainsIt takes only two things to keep people in chains:
The ignorance of the oppressed and the treachery of their leaders.

While 55 percent of Americans say they want a single-payer/Medicaid-for-all plan, those in favor tend to change their minds when they hear that it means giving the government more control over health care, or that Americans would have to pay more in taxes.

Right. People change their minds when they are told, falsely, that the government would control health care and taxes would go up.  Neither is true.

Doctors, hospitals, and pharmaceutical companies would continue to provide health care, and there is absolutely no reason why taxes would go up.

In fact, FICA could be completely eliminated, and the federal government still could provide Medicare to every man, woman, and child in America.

That tracks with other polling on the issue. A May poll from the nonpartisan Public Policy Institute of California found support for single-payer state healthcare at 65 percent statewide, but that number dropped to 42 percent when respondents were told at least $50 billion in new taxes would be required to pay for it.

That’s a pretty optimistic view of the taxes that would be required to pay for single-payer in California; the actual cost would be well over $100 billion annually.

No, that is the Big Lie. Neither $50 billion nor $100 billion would be necessary to pay for it. No tax dollars at all are necessary.

The federal government, being Monetarily Sovereign, creates brand new dollars, ad hoc, every time it pays a bill.

Are you sure you want government-run health care? Many Americans don’t seem to understand the question. But once they do, the answer is “no.”

Sure, once Americans intentionally are given the wrong information, they answer, “No.”

To repeat: It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders.

In this case, knowledge is easily obtained. Ignorance is a choice.

What choice will the public make?

Rodger Malcolm Mitchell
Monetary Sovereignty

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY

11 thoughts on “OMG! Another wrong, wrong, wrong message to you about Medicare.

  1. Hello Rodger
    Cannot thank you enough for your blog posts.
    I had a question about the Hyde Amendment and how it can be overridden or eliminated in this Medicare For All / Single Payer solution
    The amendment is brutal in its words

    To prohibit the expenditure of Federal funds for abortions, and for other purposes.

    Prohibiting Federally funded abortions

    301. Prohibition on funding for abortions
    (a) In general
    No funds authorized or appropriated by Federal law, and none of the funds in any trust fund to which funds are authorized or appropriated by Federal law, shall be expended for any abortion.

    (b) Health benefits coverage
    No funds authorized or appropriated by Federal law, and none of the funds in any trust fund to which funds are authorized or appropriated by Federal law, shall be expended for health benefits coverage that includes coverage of abortion.

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    1. There are three parts to the issue, the legal part, the moral part and the economic part.

      I am not a lawyer, so I won’t opine on the legal part.

      As to the moral part, there are many people who believe abortion is murder, but the majority in America believe it is not. I believe it is immoral for the minority to force the majority to obey its moral/religious code.

      I even believe it is immoral for the majority to enforce its it moral code on the minority, but at least that is more in keeping with the way governments operate.

      I also believe it is immoral to force poor women (the rich always can obtain abortions) to suffer the pain, humiliation, and life-changing expenses of carrying a baby to term, and then facing the agonizing decision of whether to keep it or put it up for adoption.

      Many people believe eating pork, lending money or showing one’s bare head is immoral, yet I do not subscribe to banning these for all people.

      As to the economic party, it is poor economics that says unwanted children should be brought up by families having neither the means nor desire to raise them. That is the way poverty is extended.

      Finally, I also realize I have given you shorthand answers to questions that have been debated at length, so there is no need to provide all the “But . . .” refutations.

      If you disagree, I won’t argue.

      Liked by 1 person

      1. Thanks. I am in agreement with what you said, but looking for answers to counteract the rebuttal of “how will you avoid the Hyde Amendment.” Someone on Twitter told me, without getting rid of this amendment, Single Payer is a non-starter. The only counter point I can think of is the argument that it is not “your tax dollars” that’s funding abortions, because federal government does not spend tax dollars. But that’s still a weak argument.

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  2. Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).

    How can we pay for an increase in health spending? The same way that we pay for all public spending. The Government will spend the money into existence. The way the accounting is done these days, and current institutional practices, obscure this truth, but they do not change the fact that it is a truth. It is not a theory. It is a plain fact.

    Health spending , and much more, are possible. What needs to change is the mindset of those who have not understood that the dysfunctionalities in the prevailing economic system can be successfully tackled and eliminated. The first line of attack must include educating the average citizen and the journalists who write for them, who continue to misunderstand the nature of the forces which are moulding and controlling their lives, and also the groupthink of those in positions of power and influence in our society who – in many cases – have been led unwittingly to believe that there is no alternative.

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  3. As with MMT, I assume your MS thought includes the inflation constraint to federal deficit spending. If that’s the case, then one can only conclude that there will need to be limits to Medicare-for-All spending, as there are for the current Medicare program. Through price controls directly, and through deductibles and co-pays indirectly, the government is taking an active and very large role in actual health care decisions funded by Medicare. Regardless of where on the large/small government gradient one places themselves, it is a tad disingenuous to claim the issue is washed away by limitless government spending.

    At least in the Medicare area, there is a mechanism for imposing the inflation constraint on federal deficit spending. Should deficit hysteria be replaced by MMT’s smarter inflation constraint, I have yet to find a MMTer to explain how the inflation constraint would actually work to constrain the Right from deciding no tax cut is a problem, and the Left that no problem can’t be solve by throwing more money at it. Typically, the answer is that, as economists, that’s not their job, and other adults-in-the-room will take care of it – obviously they have been sheltered since birth from the typical politician wanting to please his constituency. And even if we found some politicians understanding the inflationary constraint and in a position to use it, would they pick the right levels and would the mechanism respond quick enough – I’ve seen no MMTer modeling this, haven’t really found any asking these questions – they seem too busy lecturing others on the stupidity of deficit hysteria. Maybe a couple will turn to monetary policy on steroids that would make both Milton Friedman and Paul Volcker blush.

    Given the high distaste for price controls, perhaps deficit hysteria is the only politically workable mechanism for the inflation constraint. Maybe smart MMT to jettison it, but would it be wise?

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    1. Thanks salsabob,

      Although Modern Monetary Theory (MMT) and Monetary Sovereignty MS) are “kissin’ cousins,” the two ideas differ in some very important ways, and one of them is the control over inflation.

      This is described at: A reminder about why Modern Monetary Theory (MMT) is wrong about inflation

      The fundamental equation regarding inflation is: Value = Demand/Supply.

      MMT proposes to control inflation by reducing money Supply; MS proposes to increase money Demand.

      The Demand for money = Reward/Risk, and the Reward for owning money is interest.

      That is why the Fed successfully controls inflation close to its target value by controlling interest rates.

      To quote from the above-mentioned article:

      While, in theory, tax increases can prevent inflation, in actual practice, tax changes would be inefficient and damaging.

      They are far too slow (When will they be collected?), far too political (Which taxes?) and not incremental (How much?).

      Perhaps most importantly, tax increases remove dollars from the economy, thereby leading to recessions.

      Although the federal government has managed to control inflation, federal taxes have not been the controlling device. Interest rates have.

      That is, while MMT hypotheses have focused on Supply, the Fed, in the real world, has focused on Demand – successfully.

      Though the article mentions “tax increases,” this is tantamount to spending decreases, which you have suggested.

      The only — and I mean ONLY — limit to federal deficit spending is an inflation that cannot be controlled via interest rate control.

      To date, the U.S. never has experienced that degree of inflation.

      Deficit hysteria is a terrible mechanism for inflation control.

      Like

      1. Thank you for an excellent response; much more that I usually get from your MMT kissing cousins.

        I see and understand your reliance on monetary policy (MP) to operationalize the inflationary constraint, but have two concerns (I wouldn’t say they are issues or positions for me at this point).

        First, are there downsides to a Volcker or Volcker+ level monetary policy to control inflation kicked off by increased federal spending that would make at least some or most of that increased spending not worth pursuing? Should that, and how could that, be ascertained before getting into shortcomings of MP providing the inflationary constrain?

        Second, the US never experiencing that degree of inflation has been within the context of the constant (although admitted waxing and waning) constraint of the abhorred debt/deficit hysteria, occasionally (WW2) or partially (health care expenditures) of price controls. Removing that context would be a unique experiment; are we certain about what would and would not be released? Seems risky, and needless to say, also very contentious with the small govt folks who seem to have a lot of political power these days. Have we thought through a way to evolve this, for both cautionary and subterfuge purposes, or do we have to go boldly where no monetary sovereign has gone before (which is often my fun go-to critique of the Austrians – their nirvana doesn’t, and hasn’t, existed anywhere)?

        I’m a deep-enough holder of MS/MMT/MMPrag tenets to have moved on to the behavioral/social/political questions of implementation – struggling but at least asking the questions. Again, thanks for taking the time to further my struggle.

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  4. Salsabob,

    1. There are more beneficial deficits and less beneficial deficits, but all deficits are beneficial to the extent that they add to GDP.
    (GDP = Federal Spending + Non-federal Spending + Net Exports)

    If I were to hire the next Fed Chairman, I would tell him you have two jobs: Run the banking system efficiently and prevent excessive inflation. Do not worry about GDP; that is Congress’s and the President’s job.

    2. We already have done the experiment. The so-called debt has risen an astounding 35,000% in the past 75 years and inflation has averaged about 3%, which is the Fed’s target. Had the Fed wanted inflation to be 1% or even 0%, they could have accomplished that, too.

    I don’t know what more proof there could be than that.

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  5. Rodger, this is along the lines I was thinking, but I’d go farther.

    I like to see the FED charged with setting an inflation rate floor (3%?) and a ceiling (4%?) and then derive a federal deficit spending level that would keep us in that zone. I know the FED currently likes 2%, but that’s a tad too close to insufficient inflation for a healthy growing economy and a business cycle could tip us into deflation too easily. Also, the enormous benefits from increased federal deficit spending should allow for some greater leeway.

    The level of deficit funding deemed needed by the FED analysis would then be the target for Congress’ annual budgeting/appropriations – currently, with inflation limping along just under 2%, they would need to significantly increase current federal deficit spending.

    I’d see the FED using MP to maneuver rates toward the middle of the 3-4% range to avoid needing to drastically re-direct Congress fiscal policies (this would be after an initial huge pulse of increase deficit funding to get us solidly within the 3-4% range).

    To get everyone on board, and to keep one party from overdoing their usual ideology objectives, the grand bargain would be spending increases and tax cuts would have to exactly match, both going up with more deficit spending, and if necessary to constrain inflation, going back down. This dollar-for-dollar match could be overridden in an emergency situation only with super majorities in the House and Senate.

    As a Progressive, I would like to start with your list of both what tax cuts and what increased spending – these make the greatest sense for economic and broader societal goals. However, I would not be a purist, I would allow more Defense spending and more tax cuts for the rich (to some degree) if it meant putting in place a more sane inflation, rather than budgetary, constraint.

    Just thinking ahead of how this could be actually implemented in a divisive political reality of today.

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