Obamneycare Converts Health Care Into Profits
By Paul Craig Roberts
October 19, 2012 "Information
Clearing House" -
In the guest
section there is
a new contribution by Dr.
Robert S. Dotson.
He points out that Obamneycare is two versions of the same
thing. A person has to be gullible and uninformed to believe the
claims of Obama and Romney that their replacements for Medicare
will save money and improve care. What the schemes do is convert
public monies into private profits.
The exploding costs described by Dr. Dotson and the rising
profits for private corporations are paid for by reducing health
care. For example, Betsy McCaughey, former lieutenant governor
of New York, writing in Investors Business Daily
reports that “On Oct. 1, the Obama administration started
awarding bonus points to hospitals that spend the least on
elderly patients.” The result will be fewer knee and hip
replacements, angioplasty, bypass surgery, and cataract
operations. These procedures transformed aging by allowing the
elderly, who formerly languished in wheelchairs and nursing
homes, to lead active lives.
Obamacare rolls back the clock. “By cutting $716 billion from
future Medicare funding over the next decade and rewarding the
hospitals that spend the least on seniors, the Obama health law
will make these procedures hard to get and less safe.” Doctors
will be paid less to treat a senior on Medicare than to treat
someone on Medicaid, a poverty program that is not financed by
the payroll tax. McCaughry reports that doctors will be paid
only one-third as much for treating Medicare patients as for
treating a patient with subsidized private insurance and that
Obamacare means that hospitals will have $247 billion less over
the next decade to care for the same number of seniors.
According to McCaughey, prior to Obama raiding Medicare in order
to subsidize the price of health policies sold by private
insurance companies, Medicare was already paying hospitals only
91 cents for every dollar of care provided. The way Obamacare
saves money is by cutting back care for the elderly and
shortening their lives. As I pointed out in my last article,
Obamacare is a death panel.
This doesn’t mean that Romneycare is any better. Conservatives
like to pretend that the private sector is always more efficient
and less corrupt than the public sector, and that replacing
Medicare with vouchers toward the purchase price of a private
insurance company will lower costs and improve care.
As Romney’s scheme has not appeared in federal legislation, we
don’t know all the ways the interest groups would game the
voucher system. However, the voucher system would add to costs
by adding another level of profits. Unless the private insurance
companies are to become administrators for the government and be
protected from Wall Street organized takeovers for not earning
high enough profits, the policies sold by the insurance
companies will have profit in them.
Also, conservatives make a great deal to do about Medicare being
unfunded, but what is there to fund Obamneycare except the
payroll tax that funds Medicare? Obamneycare depends on the
government handing out subsidies or vouchers for the purchase of
private insurance policies. Neither scheme is any more funded
Some conservatives seem to think that because private policies
are involved that health care becomes funded. What Obamneycare
does is to steal from Medicare in order to finance Medicaid and
private insurance policies. Both plans raise costs, reduce care
for the elderly, and divert tax dollars away from health care to
Let’s examine the erroneous conservative belief that if health
care is provided privately, without any government subsidies, it
is funded, whereas Medicare is not funded. To pay the premium on
a private policy, a person has to have an income. The premiums
are thus funded by the earned income stream. If the person loses
his or her job, or becomes incapacitated and cannot work, the
person cannot pay the premium and the policy can no longer be
funded. If the person is elderly and lacks sufficient retirement
income to pay the high cost of private health insurance for the
elderly, the person’s health care is no longer funded.
Medicare is funded by the same earned income stream that funds
private insurance policies. Instead of paying a premium to a
private company, the worker pays a payroll tax that funds his
health care regardless of his employment or level of retirement
Conservatives claim that under Medicare, the young have to pay
for the elderly. However, the young become old in turn, so the
intergenerational aspect is simply a part of the human life
cycle. It is the same with private medical coverage. The healthy
(usually the young) pay for the sick (usually the elderly).
Private insurance has an actuarial basis. Actuaries calculate
premiums and risk so that the total premiums can accommodate the
claims of the percentage of policyholders who become ill. The
notion is false that a person with a private policy is paying
for his own health care unlike a person on Medicare.
A favorite “cost-saving” scheme is to raise the retirement age
for Medicare. As Dave Lindorff points out in CounterPunch
(printed edition, Oct. 1-15, 2012), 90% of the cost of the
Medicare program each year goes to pay for the care of the
oldest 10 percent of Medicare patients. Those aged 65-70 are the
most fit and cost the least. Moving the retirement age up
doesn’t save any real money. It just violates the contract and
takes away the coverage for which people paid during their
Obamneycare takes decisions out of the hands of patients and
health care providers. It reduces care for the elderly. It
imposes intrusive controls and data collecting and reporting. As
care providers witness care withheld and the elderly confined to
wheelchairs and nursing homes and early graves, health care
providers will have to become as hardened as workers in
slaughter houses, or the system will implode.
Already 59% of US doctors say that they prefer a single-payer
national health care system to the corporate form of medicine
that has turned them into wage slaves who have to ration the
time they spend with patients and the amount of care that they
If Obama’s subsidies and Romney’s vouchers are not indexed to
medical inflation, Obamneycare will provide diminishing care as
the years go by. As jobs offshoring has stripped the country of
middle class job growth, the incomes earned by waitresses,
bartenders, hospital orderlies, and Walmart’s part-time workers
will not cover shelter, food, transportation, and health care.
When Obama sold out his supporters to the insurance companies,
Obama supporters lined up with the pretense that diverting
Medicare money to private profits was an improvement over the
current system. Obama supporters have now invested so much
emotional capital in Obama’s assault on Medicare that they
pretend there is some meaningful difference between Obamacare’s
government subsidized private insurance policies and
Romneycare’s government subsidized private medical insurance
While the two sides yell and scream at one another, the concrete
hardens around the new common policy of shorter lives for the
elderly and more profits for private corporations.
Although no one in either party can define the US mission in the
seven countries in which the US is conducting military
aggression, wars of choice that according to Joseph Stiglitz and
Linda Bilmes have already cost US taxpayers $6 trillion in out
of pocket and already incurred future costs, there is no
discussion of halting the wars and diverting armaments industry
profits to the health care of the US population.
Thus, we are left with Dr. Dotson’s conclusion that Americans
are governed for the benefit of corporate profits. Americans’
lives, health, incomes, careers, prospects, none of this
matters. Only corporate profits.
Craig Roberts was Assistant Secretary of the Treasury for
Economic Policy and associate editor of the Wall Street Journal.
He was columnist for Business Week, Scripps Howard News Service,
and Creators Syndicate. He has had many university appointments.
His internet columns have attracted a worldwide following.
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