Love/Hate - A Senior's Health Care Reform Dilemna

© David Burton 2009

Overview

     I am a senior citizen and, until very recently, a more than 20-year member of the American Association of Retired Persons (AARP). Very recently, the AARP has come out and publicly endorsed the House version of ObamaCare. At first glance, the House plan would provide me with a number of benefits. However, "healthcare reform is dividing the membership of the AARP more than any other issue ever has. Despite expending vast resources, the AARP has not been able to unite its own membership." "Younger AARP members are “absolutely, maniacally obsessed with affordability. They are, ... the most anxious group.” "Older members worry about the stability of their Medicare benefits and their freedom to choose their own physicians. They need reassurance that care will not be rationed and are skeptical that Medicare spending can be reduced without cuts in benefits. They also want to see their drug costs reduced. Convincing Medicare beneficiaries that the spending reductions actually extend the life of the Medicare trust fund by several years and will not lead to core benefit cuts — even if they will affect Medicare Advantage members — is difficult. Seniors enrolled in private Medicare Advantage plans want their extra benefits preserved even though Congress proposes to slash funding for the program." (Ref. 1)

What Seniors Should Love About ObamaCare

     Many of the benefits in the proposed health care reform legislation would serve me very well. One reason AARP has endorsed H.R. 3200 America's Affordable Health Care Choices Act of 2009 is because senior citizens would receive a number of benefits. I will love to have nearly all my prescription drug costs covered (elimination of the Medicare Part D doughnut hole); I will love to have no reduction in the health care benefits I now receive from private health care insurance and from Medicare; I will love to make sure that no health care insurer can refuse me coverage for any reason; I will love to be guaranteed that the cost (to me) of my health care coverage does not increase because of my age; I will love to have no increase in the cost (to me) of my health care insurance while my health care benefits (are supposed to) improve; I will love to have nobody step between me and my health care provider (who I alone will be free to choose). The House passed plan fills in the doughnut hole, gives the government the authority to negotiate Medicare drug prices, offers more generous insurance subsidies, creates a program to facilitate savings for long-term care, and contains stricter limits on insurers charging higher premiums for older people. (Ref. 1) In addition, according to the President, everyone else would pay the bill - not me! In other words, I would get mine and to hell with everyone else in America! Sure, what do I care if everyone not currently insured for whatever reason is provided with health care insurance (as long as I don't have to pay for their coverage).

What Thinking Seniors Should Hate About ObamaCare

     While there are several elements in H.R. 3200 America's Affordable Health Care Choices Act of 2009 that are advantageous to senior citizens, there are also aspects of the plan that appear to be highly disadvantageous to the elderly, e.g. a cut in Medicare spending by $400 billion. ”Why would the nation's largest lobbying organization {AARP}, sworn to protect the interests of senior citizens," endorse a plan that cuts "Medicare spending by $400 million to pay for its health reform legislation? (Ref. 2)

     We seniors might also want to question the title of the House plan, H.R. 3200 America's Affordable Health Care Choices Act of 2009. Do Americans really get to make their own choices and is it really affordable? But words and titles have propaganda value and are perceived by some as meaningful - Is the Democratic People's Republic of Korea (North Korea) democratic or run by its people?

     So, why is AARP endorsing the House’s health care plan? Perhaps the answer to this question comes from the fact that "AARP takes in more than half its $1.1 billion budget in royalty fees from health insurers and other vendors that market services with AARP's name. 'Medigap' plans make up the biggest share of the royalty revenues." (Ref. 2) But, these Medigap plans have competition from Medicare Advantage plans and "Congress's health reform bill would cut spending for Medicare Advantage by at least $150 billion" (Ref. 2), i.e., a part of the reduced Medicare spending would come from cuts to the Medicare Advantage plans that are in competition with the Medigap plans that are a cash cow for AARP! This couldn't be a conflict of interest, could it? It should also be noted that the proposed $400 billion in Medicare cuts would be used to expand coverage to working Americans while inevitably reducing benefits to senior citizens. So much for president Obama's claim that senior citizen benefits would not be reduced under ObamaCare. Consequently, even before the official announcement of AARP's endorsement of the ObamaCare plan, "Tens of thousands of seniors have resigned from AARP ... to protest the organization's promotion of health reform." (Ref. 2)

     While the Democratic leadership and the President can claim that cuts to the Medicare program won't raise insurance costs or reduce benefits to senior citizens, can any rational senior citizen believe these claims? It is worth noting that even "Stephen Hemsley, the United Healthcare CEO" (United Healthcare is a health insurer that markets its health care services with AARP's name), says "the company would respond to Democratic health care cuts to the Medicare program by charging higher premiums and changing benefits for Medicare Advantage." Even "the Congressional Budget Office" has predicted "increased costs for Medicare Advantage beneficiaries." (Ref. 3)

     AARP has endorsed the House plan because senior citizens would receive a number of benefits. AARP has focused on what it can get for its members and totally disregarded the cost to everyone else and the cost to America. "Achieving the AARP’s goals would require significant new spending beyond the Finance bill’s $829 billion price tag. Figuring out how to pay for healthcare reform “may be the single most difficult issue when the bill gets to conference." (Ref. 1) I, as one of these senior citizens, would receive these benefits. BUT, our children, our grandchildren, our great grandchildren, and generations to come will foot the bill - not me. Can we and our children afford a projected $1 trillion (0ver 10 years) health care program? Are the costs worth the benefits? If the projected 10 year costs are $1 trillion today, does anyone doubt that the real costs will escalate well beyond this estimate? What major government program has not seen real costs far exceed initial cost estimates?

     Apparently, many of AARP's other members also have serious reservations about the Democrats health care reform plan. In August of 2009, some three months prior to AARP's official endorsement of the House's version of ObamaCare, it was reported "that up to 60,000 people ... cancelled their AARP memberships since July 1, angered over the group's position on health care. (Ref. 4) It will be interesting to see if that number increases significantly now that AARP has made it's endorsement of ObamaCare official. I, for one, after 20+ years of membership, have just resigned from AARP and joined the American Seniors Association (ASA).

     While the issue of a public health insurance provider in ObamaCare has been largely centered on whether or not such a provision is simply a first step to eliminating private health care insurers, leading to a form of socialized medicine, a perhaps more significant argument is that the public plan "could become a huge and costly entitlement program which can break America and send us into a recession that's worse than the one we're fighting our way out of today." (Ref. 5) It is worth mentioning that the House's public health insurance plan is estimated by the Congressional Budget Office (CBO) to be "more expensive for people to purchase than private insurance. Somehow that really doesn't surprise us. Has the federal bureaucracy - and we are talking a huge one here - ever done anything in a cost effective manner?" (Ref. 6)

     The House-passed plan runs to some 1,990 pages, which the Democratic leadership forced through in only three days, raising the question of how Congressmen could possibly have had enough time to thoroughly read though and understand what they voted on. The "Republican Study Committee warned of "higher taxes, job-killing employer mandates, choice-restricting individual mandates, government-run insurance, budget-busting entitlement expansions, and countless provisions that set Washington bureaucrats firmly between you and your doctor." "House leaders touted the bill's $894 billion net price tag, but the gross cost of expanding Medicaid, subsidizing insurance for low and middle-income people and providing tax credits to small businesses would exceed $1 trillion over 10 years." "The House bill would be financed through new taxes and more than $400 billion in cuts to government health programs, primarily Medicare." (Ref. 7)

     Major contributors to recovery from the current recession will be small businesses. They create the majority of new jobs which get American workers off the unemployment rolls and which generate the new products and services that get the economy moving. What does the House version of the health care bill do to help small businesses fill this vital role? It proposes to pay part of the cost of the health care bill "by putting {a} 5.4 percent 'surcharge' on capital gains and dividends - at the same time the Bush tax cuts expire, raising the capital gains tax from 15 percent to 20 percent and now to 25.4 percent." "The cap{ital} gains tax increase that would hit on Jan. 1, 2011 would be a 69 percent hike and would fall hardest on our biggest economic driver - small business." (Ref. 8.) As it is, corporate income taxes in the United States are "the second highest in the developed world." (Ref. 9) Talk about killing the goose that lays the golden eggs!

     It's been said that the best way to reduce the government deficit is by creating more jobs. Since most new jobs have been historically created by small business - not big business and not the government, it behooves us to encourage the creation and expansion of small businesses. Imposing increased health care costs on small businesses discourages the formation of new enterprises and inhibits their growth - the result is less new job generation. Burdened by increasing health care costs and a high level of taxation, American companies are less competitive in the global marketplace as foreign companies provide goods and services at lower prices than their American counterparts. "The United States is the only developed nation that pays for the bulk of its health care through private employers rather than the government, and studies have shown premiums for workers and their companies continue to rise each year." (Ref. 10) Question: Why is a major portion of American health care costs funded by business, while everywhere else in the industrialized world, health care costs are born by the government and private citizens?

     At best, the President and Congressional Democrats are disingenuous when they claim that their plan won't dictate health care decisions and choices. The Stupak-Pitts amendment to the House-passed version of ObamaCare "forces insurance companies that currently provide abortion coverage to choose between continuing that coverage, or dropping it for all women if they want to participate in health insurance exchanges, and sell their product to government subsidized consumers." "This is government invading the personal lives of many Americans, establishing for the first time restrictions on individuals who pay for their private health insurance." "This anti-choice measure poses greater restriction on low-income women, denying low-income women reproductive coverage." The Stupak-Pitts amendment uses "government's sway to put out of business private insurance firms offering plans that pay for a perfectly legal medical procedure." (Ref. 11)

     The President is similarly being less than honest when he claims that there will be no new taxes on middle and lower income Americans. It is a new tax when people are forced to pay for coverage they didn't have before or when they're fined for not having it.

     While the Senate version of ObamaCare has yet to see the light of day and there are those who say it is DOA (Dead On Arrival), some provisions on the proposed Senate plan are still troubling to senior citizens like me. "Case in point: The Senate Finance Committee proposes a brand new tax on medical devices." (Ref. 12) The Senate plan calls for $40 billion in these new taxes while the House passed plan calls for only $20 billion. Now just a minute - it’s senior citizens like me who are the major recipients of medical devices like pacemakers and implanted defibrillators and "Obamacare foolishly would hike taxes on companies that generate health-advancing, life saving mechanisms"? (Ref. 12) I thought the President promised no new taxes or increased health care costs for senior citizens and the middle and lower economic classes. Just what does he and his Democratic followers think the medical device companies will do if they are faced with added taxes? Answer: They will raise the price of their product and all of us who use their product will pay more. I call that a tax increase and an increase in the cost of health care for seniors, middle class America, and lower income Americans.

The Bottom Line

     From where I sit, the health care reform that President Obama and the Democratic leadership are trying to ram down the throats of American citizens is too expensive, too intrusive and too socialistic! When one considers the bottom line, it should be clear that everyone will end up paying more because of all the new costs that will be incurred. Someone has to pay for those unable to pay for health coverage themselves; someone has to pay for the increased cost to insurers of not denying coverage for pre-existing conditions; someone has to pay for the higher costs of coverage for senior citizens when the Democrats' health care plan prohibits insurers from charging higher premiums to seniors; someone has to pay for drug coverage costs when the doughnut hole in Medicare Part D is closed. Obama and the Democrats say they want to pay for the massive health care reform program with taxes - initially from the wealthiest few percent of the population, (simply known as rob the rich and give to the poor), but we all know that, over time, everyone in America will end up paying higher health care costs.

     The first estimate of the Senate Finance Committee’s version of ObamaCare came in at a staggering “$1.6 trillion over 10 years, according to the {nonpartisan} Congressional Budget Office {CBO}.” In fact, it was so staggering that “the committee immediately set about revising its plan. Even with this tremendous increase in cost, the CBO reported that, out of the estimated 50 million Americans that are currently uninsured, this $1.6 trillion monstrosity “will still leave 37 million uninsured.” (Ref. 13) Is this $1.6 trillion real? The ABC New research department “found that in 1965 the estimated cost of the then-new Medicare program was $12 billion for 20 years. The actual cost turned out to be $107 billion.” - a nearly nine-fold increase. (Ref. 13) ” … major health care reform proposals have generally always cost more - sometimes significantly more - then the highest cost estimates published while legislation was pending.” and ” … in 1965, the House Ways and Means Committee calculated that Part A {of Medicare} would cost taxpayers $9 billion in 1990. In fact that year’s outlay was $67 billion." ”In 1967, Ways and Means predicted that the entire Medicare program would cost $12 billion in 1990. Actual cost: $110 billion.” (Ref. 14) Based on real life experience, does anyone truly believe that ObamaCare cost could be kept at the already outrageous $1.6 trillion level? "The CBO estimate fatally exposes the central contradiction of ObamaCare. President Obama has insisted on the dire need for restructuring the health care system because out-of-control costs were bankrupting the Treasury and wrecking the U.S. economy - yet the Democrats’ plans would make the problem worse.” (Ref. 15)

     ”ObamaCare promises to pay for itself. It can’t possibly - if Democrats come through with all the side deals they’ve made in order to get a reform bill.” “While the President hit the road to drum up public support for his plans, the White House and Capitol and Dems have been serving up closed-door promises to keep various groups happy." "All the key groups have been bought off” reports Health Policy & Strategy Associates of Alexandria, VA. “Worse, ... it’s undermining potential cost savings - perhaps preventing a new system that would pay for itself.” ”Contentious as reform has become, the Administration is pushing hard for passage of a bill. With all the requisite giveaways, what will it look like - and how will we be able to afford it?” (Ref. 16) Among the groups reportedly being bought off are: doctors (through the American Medial Association), old people (through the American Association of Retired Persons), hospitals (through the American Hospital Association), private insurers, Conservative Democrats, and the middle class.

     This country simply cannot afford ObamaCare, particularly at this point in time. ”The federal budget deficit has surged to an all-time high of $1.42 trillion. ... The imbalance for the budget year ended Sept. 30 more than tripled last year's record. The Obama administration projects deficits will total $9.1 trillion over the next decade ... As a portion of the economy, the budget deficit stood at 10 percent, the highest since World War II." "Failure to curb runaway deficits could trigger a financial train wreck that would push interest rates and inflation higher, and send the dollar crashing if foreigners suddenly started dumping their holdings of Treasury securities." (Ref. 17)

     "What is $1.42 trillion? It's more than the total national debt for the first 200 years of the Republic, ... and more than $4,700 for every man, woman and child in the United States. {It's} more than three times the most red ink ever amassed in a single year. And, some economists warn, unless the government makes hard decisions to cut spending or raise taxes, it could be the seeds of another economic crisis." "The rudderless U.S. fiscal policy is the biggest long-term risk to the U.S. economy." "Forecasts of more red ink mean the federal government is heading toward spending 15 percent of its money by 2019 just to pay interest on the debt, up from 5 percent this fiscal year. (Ref. 18)

     I don't want my children, my grandchildren, and those that follow to have "to pay for the debts we are taking on ... They will pay through higher taxes than we have known. And they will pay through inflation. The dollars they earn or inherit will simply be worth less over time." (Ref. 19)

     I don't want the productive elements in American society to have to pay for the unproductive among us. "If the government allows the unproductive to partake in the gains created by the productive, the productive just might disappear." (Ref. 20) Is this not what has caused socialism to invariably fail? Why are formerly socialized economies like the Soviet Union and Communist China moving from socialism to capitalism?

     I believe that we cannot afford an ObamaCare plan that would hurt the ability of small business to compete in the global economy and to create new jobs at a time when unemployment in America has exceeded 10 percent.

     I don't want an ObamaCare plan that dictates health care decisions and choices such as the Stupak-Pitts amendment does.

     I don't want an ObamaCare plan that calls for a tax increase on medical devices that we senior citizens need.

     I think the time has come to avoid the issue of mandating health care costs on businesses - big and small - and to have the government and private citizens assume these costs. Let's avoid laying more record-keeping burdens on businesses; let's avoid adding another set of regulations on business; let's eliminate the issue of health care insurance portability once and for all; let's keep health care costs from making American businesses less competitive with their foreign counterparts.

     It need not be all or nothing. It need not be my way or the highway. There are many aspects of ObamaCare that make sense and which are affordable. There are other steps proposed by others that also make sense. Together, these elements of ObamaCare and meaningful proposals by others should constitute health care reform in today’s economic environment. America also needs time to digest health care reform. Slow and easy makes sense with an issue so expensive, so complicated, so controversial. We don’t need a 1900 plus page hodge-podge monstrosity rushed through for political expediency.

     Was Nikita Kruschev right when in the mid-1950's he said, "We do not have to worry about the United States. They will spend themselves out of existence." (Ref. 21)

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