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Ben Cerruti
Medicare Is a Financial Failure as Will Be ObamaCare
July 30, 2009
According to the 2008 report by the board of
trustees for Medicare and Social Security, Medicare
will spend more than it brings in from taxes that
year (2008). The Medicare hospital insurance trust
fund will become insolvent by 2019. This is not a
surprise. Every program in which government has
injected itself has never been able to support
itself financially. Take Social Security, a Ponzi
scheme look alike, it will begin to run a deficit in
11 years and is predicted to be bankrupt in 2037.
Other examples are Amtrak and the Postal Service who
both run continual annual deficits. It would seem
that those in government would use this experience
as a guide for what they consider doing in enacting
legislation for other such programs. But that
appears to not be the case.
The
"Public Option” in the proposed health care bill is obviously another
Medicare type program only expanded to cover everyone. Surely it must be
acknowledged that making a program that is going bankrupt larger will
only make the bankruptcy that much more severe. Of course, government
has the power to borrow from the Federal Reserve that in turn owns a
money printing press. Supporting a program that operates at a loss in
this manner, as should be learned from the past, eventually causes
inflation and impacts the ability for private enterprise to grow and
prosper and provide employment for the benefit of all our people.
Barack
Obama is prevaricating when he says the "Public Option” will provide
competition for medical insurance providers. When a business does not
have to earn a profit and has unlimited financial resources behind it,
such as the US Treasury, it will obviously put its for-profit
competition, with limited financial resources, out of business.
Competition only occurs when the playing field is level. Presently,
competition for health insurers could be increased by allowing consumers
to buy this insurance across State lines. Congress could pass such a
simple law in no time at all.
However,
to really address health care costs, as Obama states is the reason for
this bill, they are indeed going in the wrong direction in enacting laws
that will raise costs. If Obama is serious about this, which I doubt, he
must realize that the cause of health care is determined by the
prices set by Medicare which are, in turn, passed on to insurance
companies and physicians. Pure and simple this is price fixing. When the
consumer knows someone else is paying most of the cost they are more
likely to take the path of least resistance and take what services and
products are offered with little objection. On the other hand, if they
were spending their own money they would be more likely to make choices
in their health care that were most beneficial in terms of health and
pocket book. Such a plan has been around for years but never seriously
considered although it makes economic sense. Unfortunately we don't find
much of that in government.
Milton
Friedman, noted Nobel Laureate in Economics, now deceased, suggested
that Medical Savings Accounts could be a way to enact a less expensive
and bureaucratic program and allow the participants the freedom to
select their own health care givers. Providing a voucher directly to the
consumer to be deposited in their tax free IRA, like a retirement
account for this purpose, would allow them to do this, keeping any money
not spent as savings towards their retirement. Dr. Friedman also
suggested another option that would provide every family in the US with
high deduction catastrophic insurance. This would also end the tax
exemption of employer provided medical care and remove any restrictions
that now exist that may be necessary for this to occur. The cost of
health care would then be determined just like the cost of any other
type of merchandise or service. Allowing the free market to determine
the cost of health care would place its value where it should be and
that would fulfill the objective of the reform presently being
discussed.
It should
be obvious that government operated ObamaCare will follow the financial
failure of Medicare. There will be no way to prevent this from happening
and it has to be apparent that President Obama knows this. This being
the case, it must be that he has an ulterior motive. Could it be using
ObamaCare as the means of implementing a Marxist/Socialist form of
government?
About Ben Cerruti
Now a senior citizen, Ben Cerruti has been
involved in espousing his views in writing for the
last 20 plus years. He has been published numerous
times in various San Francisco Bay area newspapers
and has been actively involved in taking positions
on ballot measures to the point of writing the
arguments and rebuttals and appearing on television
to state his position. He has had extensive
correspondence with Milton Friedman, renowned
economist and Nobel Laureate that provided him with
intimate knowledge of the functions of the Federal
Reserve System. He carries with him a lifetime of
experience in business, marketing, sales and
finance. He maintains a website at:
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