[ Pobierz całość w formacie PDF ]
.S.General Accounting Officereport, 1990. Health Care the Problem 9712.Loss of medicines: Research on rare diseases has come almost to a haltbecause the demand for potential drugs won t be large enough to recoup theenormous cost of getting them through the FDA.Insurance13.Tax policy: You can t deduct medical expenses from your taxable incomeunless you re self-employed, in which case you can deduct only a small part ofthem.But an employer can deduct all the cost of the medical benefits he providesfor employees.So your employer pays you less and provides health insuranceinstead which is tax-free for you.Further, the tax incentives encourage your employer to reward you withadditional fringe benefits rather than pay raises.So he s likely to provide firstdollar insurance wherein all medical expenses are covered, rather than justcatastrophic illnesses or accidents.Since you don t have to pay any of the bills, you have no incentive toeconomize.Neither do the millions of others with similar plans.Together, theypush up the demand for medical services and its cost.In a true free market, rising costs discourage demand for a product allowing prices to ease back down or alternative products to arise.But the taxsystem has separated the consumer from the price the patient from the cost so demand continues to rise, even as prices are rising.14.State insurance mandates: Almost every state has laws that forceinsurance companies to cover certain conditions and procedures in every medicalpolicy regardless of the consumer s needs.These add-ons include such thingsas psychiatric care, birth services, teeth-whitening, abortions, toupees,chiropractic services, cosmetic surgery, alcohol and drug rehabilitation, sextherapy, acupuncture, and marriage counseling.49Obviously, the add-ons run up the cost of your policy and the state won tlet you buy a cheaper one, even if you want to.So it s not surprising that manypeople feel health insurance is too expensive, and choose to go without it.15.Community rating: Some states force insurance companies to set premiumrates that don t discriminate by age, gender, or other factors.Since the cost ofinsuring a healthy 25-year-old is about one third of that for a normal 60-year-old,the single, one-size-fits-all mandated rates make insurance prohibitive for mostyoung people.Not surprisingly, a lot of them join the ranks of the uninsured the folks the politicians believe the free market has failed.49 Health Insurance for All by Elizabeth McCaughey, The Wall Street Journal, April28, 1994, page A14. 98 Harry Browne / Why Government Doesn t WorkGovernment Insurance(Don t Dare Call It Socialized Medicine)16.Medicare & Medicaid: The tremendous runup in health-care costs startedin 1965 when Congress created Medicare and Medicaid which put thegovernment squarely in the health insurance business.Medicare is a health insurance program for the elderly, with compulsory premiums. Medicaid is a program by which state governments use federalmoney to pay for health care for low-income people.When Medicare was passed in 1965, Congress projected its costs into thefuture, and estimated it would cost $3 billion for 1990, the equivalent (afteradjusting for inflation) of $12 billion in 1990 dollars.The actual cost in 1990was $98 billion further evidence that no government program stands still.50The payroll tax in 1967 was a modest 0.9% (divided between employer andemployee).It has risen steadily and is now 2.9%.And the amount of yourearnings that can be taxed has risen as well.In 1993 Congress removed theceiling entirely, so that all earnings are taxed now.But despite these tax increases, the program s actuaries project that the ratehas to rise soon to 4.3%.But, of course, any projection will be revised upwardbefore the hike is actually legislated.51Because the politicians consistently underestimate Medicare s costs(refusing to recognize that coercion distorts supply and demand), Medicare taxincreases never catch up with ever-rising expenses, and so the tax increases justkeep coming.Every year or two, with great fanfare Congress passes a 5-year or 7-yeardeficit-reduction package that includes large cuts in Medicare and Medicaidspending.Always the actual cuts are scheduled for the later years of the plan,with the details to be worked out by some future Congress.Meanwhile, thecurrent Congress holds a press conference and congratulates itself for cuttingspending and reducing the deficit.50The estimate of Medicare s 1990 cost is recounted in The Great Patriotic War byGrover G.Norquist, The American Spectator, December 1993, page 70.It ismentioned also in American Health Care Today by Edward R.Annis, M.D.,National Review, health care supplement, date unknown, page 8.The actual cost of$98 billion is given in Economic Indicators (Joint Economic Committee of Congress),July 1995.51 Get Ready for the Pain by Suzanne Oliver, Forbes, March 28, 1994, page 45, andin Physicians Heal Themselves by Lawrence Kudlow and Stephen Moore, NationalReview, September 26, 1994, page 54. Health Care the Problem 99But when the later years arrive, there are no cuts just more increases.Thebig tax increase and deficit-reduction package in 1990, for example, assumedthat Medicare cuts would save $60 billion over five years.Instead, Medicarespending over the next five years increased by $166 billion.52In the mid-1980s, Congress introduced a series of cost-control provisions inMedicare.But since then, costs have risen at twice the rate of health-care costs ingeneral.53The pattern is virtually the same for Medicaid.When Congress passed it in1965, it cost $1 billion per year.By 1993 it was up to $76 billion per year.In the1980s alone, Congress expanded Medicaid services on 24 occasions addingabout $20 billion per year to its cost.54Because these programs impose so many requirements, the health-caresystem now has far more administrators per patient and far fewer doctors andnurses per patient.Those big medical bills aren t paying your doctor s countryclub dues; they re financing a bigger and bigger health-care bureaucracy.17.Shifting costs to you: Medicare often pays only a third or so of the actualcost of a hospital stay [ Pobierz całość w formacie PDF ]
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.S.General Accounting Officereport, 1990. Health Care the Problem 9712.Loss of medicines: Research on rare diseases has come almost to a haltbecause the demand for potential drugs won t be large enough to recoup theenormous cost of getting them through the FDA.Insurance13.Tax policy: You can t deduct medical expenses from your taxable incomeunless you re self-employed, in which case you can deduct only a small part ofthem.But an employer can deduct all the cost of the medical benefits he providesfor employees.So your employer pays you less and provides health insuranceinstead which is tax-free for you.Further, the tax incentives encourage your employer to reward you withadditional fringe benefits rather than pay raises.So he s likely to provide firstdollar insurance wherein all medical expenses are covered, rather than justcatastrophic illnesses or accidents.Since you don t have to pay any of the bills, you have no incentive toeconomize.Neither do the millions of others with similar plans.Together, theypush up the demand for medical services and its cost.In a true free market, rising costs discourage demand for a product allowing prices to ease back down or alternative products to arise.But the taxsystem has separated the consumer from the price the patient from the cost so demand continues to rise, even as prices are rising.14.State insurance mandates: Almost every state has laws that forceinsurance companies to cover certain conditions and procedures in every medicalpolicy regardless of the consumer s needs.These add-ons include such thingsas psychiatric care, birth services, teeth-whitening, abortions, toupees,chiropractic services, cosmetic surgery, alcohol and drug rehabilitation, sextherapy, acupuncture, and marriage counseling.49Obviously, the add-ons run up the cost of your policy and the state won tlet you buy a cheaper one, even if you want to.So it s not surprising that manypeople feel health insurance is too expensive, and choose to go without it.15.Community rating: Some states force insurance companies to set premiumrates that don t discriminate by age, gender, or other factors.Since the cost ofinsuring a healthy 25-year-old is about one third of that for a normal 60-year-old,the single, one-size-fits-all mandated rates make insurance prohibitive for mostyoung people.Not surprisingly, a lot of them join the ranks of the uninsured the folks the politicians believe the free market has failed.49 Health Insurance for All by Elizabeth McCaughey, The Wall Street Journal, April28, 1994, page A14. 98 Harry Browne / Why Government Doesn t WorkGovernment Insurance(Don t Dare Call It Socialized Medicine)16.Medicare & Medicaid: The tremendous runup in health-care costs startedin 1965 when Congress created Medicare and Medicaid which put thegovernment squarely in the health insurance business.Medicare is a health insurance program for the elderly, with compulsory premiums. Medicaid is a program by which state governments use federalmoney to pay for health care for low-income people.When Medicare was passed in 1965, Congress projected its costs into thefuture, and estimated it would cost $3 billion for 1990, the equivalent (afteradjusting for inflation) of $12 billion in 1990 dollars.The actual cost in 1990was $98 billion further evidence that no government program stands still.50The payroll tax in 1967 was a modest 0.9% (divided between employer andemployee).It has risen steadily and is now 2.9%.And the amount of yourearnings that can be taxed has risen as well.In 1993 Congress removed theceiling entirely, so that all earnings are taxed now.But despite these tax increases, the program s actuaries project that the ratehas to rise soon to 4.3%.But, of course, any projection will be revised upwardbefore the hike is actually legislated.51Because the politicians consistently underestimate Medicare s costs(refusing to recognize that coercion distorts supply and demand), Medicare taxincreases never catch up with ever-rising expenses, and so the tax increases justkeep coming.Every year or two, with great fanfare Congress passes a 5-year or 7-yeardeficit-reduction package that includes large cuts in Medicare and Medicaidspending.Always the actual cuts are scheduled for the later years of the plan,with the details to be worked out by some future Congress.Meanwhile, thecurrent Congress holds a press conference and congratulates itself for cuttingspending and reducing the deficit.50The estimate of Medicare s 1990 cost is recounted in The Great Patriotic War byGrover G.Norquist, The American Spectator, December 1993, page 70.It ismentioned also in American Health Care Today by Edward R.Annis, M.D.,National Review, health care supplement, date unknown, page 8.The actual cost of$98 billion is given in Economic Indicators (Joint Economic Committee of Congress),July 1995.51 Get Ready for the Pain by Suzanne Oliver, Forbes, March 28, 1994, page 45, andin Physicians Heal Themselves by Lawrence Kudlow and Stephen Moore, NationalReview, September 26, 1994, page 54. Health Care the Problem 99But when the later years arrive, there are no cuts just more increases.Thebig tax increase and deficit-reduction package in 1990, for example, assumedthat Medicare cuts would save $60 billion over five years.Instead, Medicarespending over the next five years increased by $166 billion.52In the mid-1980s, Congress introduced a series of cost-control provisions inMedicare.But since then, costs have risen at twice the rate of health-care costs ingeneral.53The pattern is virtually the same for Medicaid.When Congress passed it in1965, it cost $1 billion per year.By 1993 it was up to $76 billion per year.In the1980s alone, Congress expanded Medicaid services on 24 occasions addingabout $20 billion per year to its cost.54Because these programs impose so many requirements, the health-caresystem now has far more administrators per patient and far fewer doctors andnurses per patient.Those big medical bills aren t paying your doctor s countryclub dues; they re financing a bigger and bigger health-care bureaucracy.17.Shifting costs to you: Medicare often pays only a third or so of the actualcost of a hospital stay [ Pobierz całość w formacie PDF ]