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Thursday, July 26, 2018

The Cost of Single Payer Health Care

For John, BLUFWe have to be careful and ask about the second and third order effects.  Nothing to see here; just move along.

Here is the sub-headline:

The law’s incentives push states to spend more on new enrollees, and less on the disabled and ill.

This morning, on City Life, a Candidate for the Democratic Nomination for the Third Congressional District (3CD) suggested that single payer, modeled on Medicare, was the solution to our health care problems.  This article raises some concerns about that belief.  The problem is, once we go down that path, how do we walk back if we find it unsatisfactory?

From The Wall Street Journal, by Ms Allysia Finley, 25 July 2018.

Here is the lede plus four:

ObamaCare made it more difficult for health insurers to turn a profit on individual plans, since it prohibited them from charging consumers more based on their medical risks.  But the law also created a huge growth opportunity for insurers: Medicaid.

Over the past decade, federal and state spending on Medicaid has nearly doubled to $570 billion—roughly as much as the revenues of United Health, CVS, Anthem, Aetna and Humana put together.  California alone will spend nearly $100 billion on Medicaid this year.

The Medicaid rolls predictably swelled during the Great Recession as people lost jobs and left the workforce.  But many never returned to work.  ObamaCare gave states the option, starting in 2014, to expand Medicaid eligibility to able-bodied people earning up to 133% of the poverty line.  The feds promised to pick up nearly all the costs.

Two-thirds of states have cashed in on this “free” government lunch. Between 2008 and 2016, Medicaid enrollment nationwide rose 24 million to a total of 71 million, according to the Centers for Medicare and Medicaid Services.  By comparison, only five million more Americans signed up for plans on the private individual market.

Struggling to manage this Medicaid surge, states have increasingly come to rely on private health insurers.  About 270 “managed-care organizations” administer half of federal Medicaid dollars.  Under these arrangements, insurers are paid a capitated rate—that is, a flat monthly payment per enrollee, set to reflect what actuaries estimate will be the average cost to provide covered services.  Unlike on the ObamaCare exchanges, insurers are paid higher “premiums” for covering sicker patients.

The long term danger is that the Government will decide that certain people are consuming a disproportionate amount of resources and thus the Government will cut off their medical attention, thus allowing them to die, or perhaps even hasten that death.  This would be analogous to the German Aktion T4 Program, which operated from 1939 to 1945 and killed some 300,000 people, outside those killed in the Holocaust.  This program contributed to the German War Effort by freeing up medical resources for wounded Service members.

I am with the late Germany Bishop, Clemens August Graf von Galen, who publicly opposed this program.  It wasn't right then and wouldn't be right today.

As a side matter, health care is not a human right.  Human rights are against the Government and what it can do to deprive one of God given rights.  Health care is something that the Government provides, or one provides for oneself, perhaps by insurance.  The place where rights come in is if the Government prevents you having health care, and thus depriving you of life (liberty and the pursuit of happiness).

Hat tip to the InstaPundit.

Regards  —  Cliff

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