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A Feature, not a Bug - The Post & Email thepostemail.com/2019/06/29/a-f…
Giving Medicare coverage to anyone who wants it would not directly and immediately mean the end of private group health insurance plans, but it would lead to that in the long run. It would be an eventual consequence, whether intended or not.
Most of the Democrat candidates know that (and welcome a collapse of the private insurance industry). Many leftist media pundits know that too, but they are not about to make reality clear to the voters because their goal is to defeat Donald Trump, not enlighten the citizens.
Imagine that your city has three large companies that manufacture widgets. Assume that Company A sells its widgets for $10. Company B makes a slightly better product and charges $10.25 per widget. Company C sells a widget of slightly lower quality for $9.75.
All three companies enjoy decent sales, and each company has 500 employees. Assume also that all three companies provide group health insurance for their employees, and that coverage costs each company about $10,000 per year per employee.
Now look ahead to 2021 and assume Democrats have held the House and won the Senate and the White House. They eagerly pass “Medicare-For-All” that allows group insurance policies to remain in effect but allows everyone in the nation to receive free Medicare coverage if they choose
“Where is the problem?” you ask. People who like their employer-paid coverage would be allowed to keep it, while anyone who prefers Medicare (or who had no insurance at all) could get “free” federal health insurance.
Let’s put aside the question of where the money for the Medicare expansion would come from. It would, of course, come from both higher taxes and the nationwide price inflation that is the inescapable consequence of increased deficits and the expansion of the money supply
Instead, put yourself in the shoes of the people who own and operate widget companies A, B, and C. That is where the common sense of people who run businesses comes into play—and it will quickly offset the lack of common sense among politicians
Company A spends $5 million per year on employee health insurance (500 employees multiplied by $10,000 per employee). Its board of directors, seeking increased sales and market share, votes to terminate its group health insurance.
“Why bother continuing that coverage?” the board members ask. “After all, all 500 of our employees can now get free Medicare coverage!” Company A terminates its group insurance policy, dumps its 500 employees into the Medicare system, and reduces its payroll costs by $5 million
Having freed up that revenue, the company lowers the price of its widgets to $9.25. Undercutting it competitors, Company A immediately sees its sales and revenue increase dramatically.
Companies B and C, of course, see reduced sales. Why? A portion of their sales have now gone to Company A. As time passes, Companies B and C continue to lose sales and lay off many of their employees.
Company A, has used some of the $5 million in savings to buy new and improved machinery that enables it to keep up with increased production demands without having to hire any new employees. The people laid off by Companies B and C are out of luck; Company A does not need them.
As time passes, Companies B and C closely examine their bottom lines, see the light, and decide they will also terminate their group health insurance plans. Why would they not do so? Company A has a $5 million per year operating expense advantage over them!
If they do nothing, Companies B and C will continue to lose business, while Company A will continue to grow. Rather than put themselves out of business, Companies B and C follow the route taken by Company A,
Suddenly every employee of Companies A, B, and C is without employer-paid group health insurance. They have all been dumped into the same “Medicare-For-All” pit.
It is incredibly naive to believe this will not happen. The only unknown is the pace at which it will happen. If that does not seem clear, change the scenario slightly and assume the Democrats pass legislation giving every American worker a new, free car every year.
Does it not seem logical that every employer in America who has offered company cars for some of its employees would immediately eliminate that benefit?
If Medicare-For-All were to become law, within a few years almost no one in America would be covered by an employer-paid group health insurance plan. Even if you are somehow unable to understand that, most of the politicians understand it.
The eventual collapse of private insurance plans is a feature of their “public option” and Medicare-For-All schemes, not a bug. Any suggestion that “You can keep your plan” will be a lie—just as it was when ObamaCare was being shoved down the throats of the American people.
Ironically, these Medicare-For-All schemes will significantly harm the voters the Democrat politicians rely on most: labor union members. The reality is that some of the most generous and popular group health insurance plans are those enjoyed by union workers. “
“Vote for me and I’ll see to it that you will lose the health insurance you love!” seems not to be the best campaign slogan. Yet most of the Democrats running for president are essentially saying just that.
Senator Kamala Harris (D-CA), for example, has stated that many workers dislike their employer plans because the insurance companies require pre-approval for some medical tests and procedures. Her implication was that the Medicare-For-All schemes would have no such restrictions.
That is, of course, nonsense. The existing Medicare system also has many similar restrictions. A senior citizen on Medicare cannot simply demand any test or procedure and expect it to be immediately approved and performed with no questions asked!
A headache does not mean a brain scan will automatically be approved by Medicare any more than it would automatically be approved by a private insurance company. The sad state of journalism today is that the “journalist” who interviewed Harris did not challenge her on the issue.
Medicare would be more in the red than it already is if there were no restrictions. “Medicare-For-All” would probably be worse because the federal government cannot afford to give 320+ million people all the medical care they want whenever they want it.
At least with employer-paid insurance you have a fighting chance and can file an appeal challenging any denials of coverage. In fact, with a big employer on your side you may win your argument, because your employer can threaten to take its insurance business to another provider.
But try arguing your case with a low-level government bureaucrat who has been ordered to deny as many hip replacements as possible because a corrupt and mismanaged federal system is more broke than your bones.
