Hello, and welcome to another episode of the Liberty and Justice For All Podcast. I’m Emily Olsen, and I enjoyed watching the March 15 Presidential Debate between Biden and Bernie. I think both of them did well. I enjoyed the one-on-one format that gave them more time to discuss their policies.
But I am amazed at how the Covid-19 outbreak lessened the gap between Biden’s expansion of Obamacare and Bernie’s Medicare for All policies. Covid-19, or Coronavirus as it is commonly known, has changed a lot of things around us, just in the last few days, such as the availability of toilet paper. But I was going to say that Covid-19 certainly accentuates the need for everyone in our communities to have access to affordable healthcare. The health of one affects the health of all. We can all accept this in regard to extremely contagious diseases like Covid-19, and this principle applies to our economy also.
I want to talk today about more of the details of Medicare for All. I will say that as a layperson watching Sunday’s debate, I was left with questions about Bernie’s policy, and I think there is more interest than ever about what he has to offer. All insurance is complicated, and Medicare for All is different than Obamacare in a number of ways that is important to understand for comparing Bernie from Biden.
So before I get into a big discussion about the benefits of the left-wing policy of Medicare for All, I will reiterate that only a few years ago, I still identified as a moderate Republican. How could my views change so drastically in such a short time?
My husband, Paul, had a big influence on me in that regard. He will join us as my guest in a moment. About three years ago, he completed his master’s project on a health economics subject, and I assisted him in preparing the written report and literature search for it. Even the title is quite technical, which is, “How Socioeconomics and Limited Access to Healthcare Relate to the Onset of Secondary Symptoms in Diabetes.” He completed multiple sets of regression analyses, which are statistical comparisons of a group of data. I have included a link to the whole report and his data in the text below, if you’re interested. His project identified a statistical correlation between poverty and the onset of both Type 2 diabetes and the onset of secondary symptoms in Type 2 diabetes.
So basically, poor people are more likely to develop Type 2 diabetes and also develop complications later on from it, such as cardiovascular disease, stroke, or blindness. Being poor makes you more susceptible for many other medical conditions, as well. That info is really important to you if you are poor, but it’s especially important to all of us, when you combine it with the fact that about half of all estimated national expenses associated with diabetes are related to emergency and/or hospital care. And most emergency and hospital care can be avoided if patients are maintaining their diabetes well by keeping blood sugars within the safe range on a consistent basis and by being able to keep the recommended quarterly doctor’s appointments for diabetics. Those who are maintaining their diabetes well are less likely to have an emergency low or high blood sugar, which could worsen their diabetes or even cause death in extreme cases.
To maintain their diabetes well, patients need access to affordable healthcare and pharmaceuticals. They need to be able to see a doctor on a regular basis, as well as receive medications and diabetic supplies without breaking the bank and without having to sacrifice some of those things so that they can afford food or food for their families or a roof over their heads.
When they experience an emergency or hospital event, poor individuals are often not able to pay the associated bill, which can easily get into the thousands – even with insurance. So what happens if they have to go bankrupt? The hospital and ambulance service and doctor that attended to them have to eat the expense, and that means that in order to keep their businesses running, they have to raise their rates for everyone. As a result, we all pay more for our medical emergencies to cover the cost of those who can’t pay.
So if everyone in our communities had access to affordable healthcare, everyone would experience lower costs – in theory, that is – but you know how hospitals and doctors and insurance companies, and especially pharmaceutical companies, like to make a buck – how could Bernie’s plan actually produce the lower costs? Let’s ask Paul, who has substantially researched and embraced Bernie’s plan. Welcome to the show, Paul.
Paul: Thank you. First of all, Medicare for All would be significantly lower cost to the consumer. You would simply pay a 4% income-based tax. For a family earning $50,000 a year, that’s only $844 a year after the standard deduction.
Emily: Which is so much less than the average annual cost of premiums that families are paying right now. And that is all they pay – no co-pays, no lab fees, no ambulance fees.
Paul: That’s right. And families earning less than $29,000 would pay nothing.
Emily: So how would Bernie’s plan have the leverage to reduce the costs of hospitals, doctors, insurance companies, and pharmaceuticals?
Paul: Bernie’s plan would eliminate the insurance companies altogether. And when you allow Medicare to negotiate the prices of drugs and other healthcare costs on behalf of all of us, Medicare would have the necessary leverage to reduce costs substantially, like having a union would.
Emily: But what would happen to all the people who run insurance companies. Wouldn’t they be out of a job?
Paul: The people who run insurance companies have net-worths of tens if not hundreds of millions of dollars. I think they’ll be fine. And as for the employees, the Medicare for All system is going to be covering the entire country, so we will need all their labor that we can get.
Emily: What about people who want to keep their private insurance – like the unions that negotiated so hard for it?
Paul: Bernie’s plan actually allows people to opt for keeping their private insurance for the first few years, but they will pay more and so will their employers than if they choose Medicare for All. In fact, a lot of companies will probably stop offering private insurance and switch to the public plan because it will be so much cheaper for them. If we go with Medicare for All, Unions can then put all their resources into fighting for higher wages and don’t need to spend time negotiating their benefits packages. Most union workers are in favor of Medicare for All.
A second point on this: People just want their medical bills paid, and Medicare for All offers a safety net. People won’t have to worry about going bankrupt if they experience an expensive medical procedure. People purchase medical insurance to reduce their medical costs especially in an emergency, and Medicare for All not only gives people coverage, but at a substantially reduced cost not only for the individual consumer, but for the whole country.
Emily: You indicated that Medicare for All will cost less for employers. I’m sure if people didn’t have to worry about having insurance, there would be a lot more people starting their own businesses. And people who get sick and have to leave their jobs can be rest assured that their medical bills will get paid.
Paul: Absolutely. There are many people who have great ideas for starting new companies, but they can’t leave their jobs because they get their health insurance through their employers. Medicare for All solves that problem.
Emily: In that sense, it will be great for the economy. Will Bernie’s plan be able to ensure a smooth transition from one program to the next? I know that especially for medical professionals, transitioning to Obamacare 10 years ago was grueling.
Paul: Many hospitals and doctors already accept Medicare, which is already established in the system. We would simply expand it over a four-year period. Furthermore, many doctors love Medicare because it guarantees that they get paid.
Emily: We’ve already talked about how Medicare for All would reduce costs because we would no longer have to pay for those who can’t pay. Would the policy also save costs in other ways?
Paul: Absolutely. Insurance company executives would be eliminated, so we would no longer have to pay their exorbitant salaries. The Medicare program also does not have shareholders taking a large slice of the pie. Medicare does not need an advertising budget. You don’t see that many commercials for Medicare. The number one reason why healthcare costs have skyrocketed over the past few decades is the administrative costs. Hospitals have to deal with thousands of different insurance plans – different patients have different deductibles, and some patients are covered for a procedure where others are not. Keeping track of each insurance plan requires knowing a complex medical coding system, but under Medicare for All, you just send the bill to the government.
Emily: Presently, there is an entire college class that medical professionals have to take to learn the medical coding system. You’re saying that we could simplify that system substantially under Medicare for All?
Paul: Well, you just look at the numbers. Before Obamacare, of every dollar consumers paid to their insurance companies, only 50 to 60 cents was spent on actual health care. The ACA increased that, requiring 80 cents of every dollar be spent on health care. The Medicare system spends 93 cents of every dollar on health care.
Emily: But Medicare will still negotiate prices for service?
Paul: Sure, they already do in the current system.
Emily: But aren’t Medicare payments less than other insurance companies? Will doctors be OK with that?
Paul: Medicare will ensure that doctors and hospitals will get paid for each claim, and as a result, doctors and hospitals can charge a more accurate fee instead of inflating it to make up the slack for those who can’t pay. They won’t have to hire collection agencies anymore either, which will also save them money.
Emily: So basically, medical insurance companies have failed?
Paul: Medical insurance companies are motivated by profits, and the profit-motive is turned on its head in the medical insurance industry. They make more money the less they cover you. This is the reason why certain politicians are pushing customizable insurance plans, which are really more-loopholes-for-the-insurance-company plans.
Emily: In other words, customizable insurance plans allow insurance companies more excuses to deny claims.
Paul: Yes. And customizable insurance plans completely defeat the purpose of insurance. You don’t know what medical afflictions you’re going to have down the road.
Emily: So explain to us how insurance works. You get a pool together. People pay premiums, the insurance company pays claims.
Paul: Basically, and more people who contribute to the pool, the lower the cost per person for premiums and deductibles.
Emily: So if the whole country was pooled together into one insurance plan, it would reduce costs for all us. But are there any downsides to having only one system? I mean, you could have a server go down –
Paul: And like any large system, you would create a back-up system or two. Any competent engineer knows the importance of redundancy.
Emily: I guess crooks would have a larger motive to hack such a system –
Paul: Sure. But there are plenty of precautions that can be taken. Blackhats would have to imitate a hospital or doctor’s office to siphon off any money.
Emily: But what about all of those Medicare fraud problems that we have had in the past? The government has a bad reputation for poor oversight of Medicare and other programs.
Paul: Oversight concerns will need to be written into the legislation.
Emily: And what happens when a Republican president is elected? This is a really different plan than we have now, and Republicans will resist when they are back in power.
Paul: The Trump Administration has tried to do away with Obamacare. But people started realizing that they liked the new benefits, and it really hurt the Republicans in the 2018 midterms.
Emily: That’s true – people started to really depend on their coverage and didn’t like it when the Republicans tried to take it away from them.
Paul: Yeah, people like having health coverage, even if they don’t know it yet.
Emily: OK. So with your master’s degree in economics, explain to us how the healthcare industry does not follow the standard supply and demand models.
Paul: It’s quite simple. In most sectors of the economy, demand for a given product varies with its price. The higher the price, the less of a product is purchased. And the lower the price, the more of a product is purchased. I’ll give the example of a clothing store trying to sell a shirt for $10,000. They are not going to sell very many shirts at that price. They will have to lower the price if they expect to sell more.
Emily: So there are a few designer shirts made of like ostrich leather or something which could cost $10,000. But I imagine that supply for those would be low, and the cost of manufacture would be high.
Paul: And they would only sell a handful of them.
Emily: Yeah, and those shirts would likely become collector’s items in a few years and sell for even more, probably. But most stores simply want to make a marginal profit after the cost of manufacture, advertising, etc.
Paul: Right. Now, switch over the healthcare field. Suppose tragedy strikes and your child gets cancer.
Emily: That would certainly be a case of demand regardless of price.
Paul: Your choice in that situation is to pay whatever the chemotherapy costs or watch your child die. The pharmaceutical company knows that so they can get away with price gouging. Another example is a Type 1 diabetic. The have to use the same amount of insulin regardless of the cost. Too much they get sick; too little they get sick.
Emily: Unless they compromise the amount of insulin they take to pay for other household things –
Paul: And then their health rapidly deteriorates. It’s another case of being pence wise, pound foolish. It may save a buck in the short term but cost a lot more in the long term. Another example people have cited is that no one got an appendectomy because it was put on sale. Hospitals don’t have sales.
Emily: They don’t need sales. There are enough sick people in the world. So people criticize Bernie’s plan because it doesn’t appear that he knows how it will get paid for.
Paul: Every study that has been done – including ones from right-wing think tanks where they gave every conceivable benefit of the doubt to the private sector – shows that Bernie’s plan will save this country trillions of dollars. To ask how you are going to pay for saving money – I’m scratching my head. If that question still makes sense to you, you’re a hack.
Emily: I see. It’s clear that Bernie’s plan will save us money. Thanks, Paul, for the great explanation. OK, I have a few more questions – I have heard the concern that Canada’s system often requires people to wait for a while to get a procedure. For example, a man who needed knee replacement surgery had to wait 6 months.
Paul: Yes, and we often have to wait months to see specialists under our private system. Cases from Canada that require these long wait times – they often involve things like an organ transplants, and that has nothing to do with cost or resources – it’s about waiting until a suitable match becomes available.
Emily: OK. Um, what do you say to people who don’t like the idea of the government running their healthcare?
Paul: Like big brother is watching? Or I don’t want the government screwing up my healthcare?
Paul: The answer is that the current Medicare system is not a government-run system. The government just picks up the bill. So why would expanding that system to the whole population be government run health care?
Emily: Another concern people have is that reducing the cost of prescription drugs will eliminate the R&D budgets of pharmaceutical companies, which may eliminate the ability for them to develop new life-saving medications.
Paul: The government already pays for much of their R&D through grants and corporate subsidies. The government pays for R&D at universities, as well. It would be less of a conflict of interest for R&D budgets not to be associated with the cost of medications. When medications cost too much, it can cause a barrier to entry, which defeats the purpose of the drug development – if people can’t afford the medications, they can’t reap the benefits, and in some cases, that means death.
Emily: Clearly, the present price gouging done by pharmaceutical companies isn’t to benefit their patients. It’s about profits instead. Thanks very much for joining us, Paul.
So in my interview with Paul, we didn’t get into the socialism aspect of Medicare for All, and that is something that a lot of people seem to have qualms about. So let’s talk about it now.
The right-wing media uses the word socialism as though it were authoritarianism. But there are so many uses for the word socialism that it has lost its meaning. What is Bernie’s version of democratic socialism? I’ll explain.
With the exception of North Korea and the like, all governments in the world have a mix of free market and socialism in their economies. For example, the government provides fire stations, roads, and libraries that we pay for through taxes. Can you imagine if fire stations were free market instead? We would each have the option of buying into supporting the fire station in our community. But if our house catches fire and we haven’t paid in, the fire department simply wouldn’t come and our house would burn to the ground. However, it would be in the best interest of our neighbors for the fire department to stop the fire as quickly as possible because the fire could spread to their properties. And it would be an administrative hassle in an emergency for them to identify who we are and if we have paid in. Such delays could cost lives. So you see that socialized fire departments are the best solution.
The United States has generally taken the stance that we are a free market economy to a point. Free market doesn’t always take into consideration the well-being of the people, and that’s when the government steps in with regulations like OSHA that ensures safe work conditions, for example. Medicare and Social Security were created to ensure that we have some income and medical insurance when we retire. And Bernie’s plan shows why it would be better for our economy and our health if we were all on the same plan that was managed by the government. When we all have coverage, the cost for everyone goes down, which is better for our GDP. I encourage you to check out Bernie’s plan on his Senate website. I have not given up on Bernie – he still has a lot of support out there and I know he would make a fabulous President. He has all of the people in mind.
One more thought I want to share with you: This Coronavirus is serious stuff. It is an adjustment to all of us as we try to hamper the spread of the virus especially among vulnerable populations. Just over the weekend, my nephew had to go into a 14-day quarantine because a student in one of his classes tested positive for the virus, so it has hit home fast for a lot of us. Paul and I spent some time on Saturday helping a few of our friends get to the store for supplies. I got to see firsthand the empty shelves – no hand soap, no dish soap, no diapers, no wet wipes. People are ready to hunker down for a while.
As the virus spreads, President Trump has started taking it a lot more seriously, especially after the market tumble of almost 3,000 points on Friday. But his missteps are really hurting him, especially regarding the availability of testing kits. Apparently, the President wasn’t willing to purchase test kits from the World Health Organization (or WHO), but kits that were distributed by the CDC aren’t working properly – I guess that’s the next scandal for Rachel Maddow to unearth. I wish the very best to all of you, and I have faith that good things will come from all of this.
The things we have been taking for granted for decades just may be shifting. Now is the time to pay attention to national politics so that we may continue to have Liberty and Justice For All.