Insurance is the law of large numbers. Without a long dissertation—here are some basics: You need many healthy people to offset the costs of sicker people. You need healthy people to offset the costs of older and often sicker people. Having everyone in one plan would lower the costs for everyone by spreading the risk. That’s health care insurance.
Poor people tend to be less healthy, so their costs of care are often more than those who are not poor. Seniors are more expensive simply because they are aging. The poor and the old are on Medicaid. Medicaid is a major issue in current proposals. Nearly 2/3 of Medicaid costs are for seniors and disabled in nursing homes. Over 64% of all people in nursing homes are on Medicaid. They are on Medicaid because Medicare does not cover long-term nursing home care. Most people cannot afford long term care which can be $5-$7,000 a month. Women, children represent and single adults are only 1/3 of Medicaid costs.
In one horrific case in 2003, one state contemplated cutting 13,000 Medicaid nursing home beds to balance the state’s budget. I double checked and called the governor’s office that confirmed this. After back and forth fights with the legislature that did not happen. The fact this was even considered is chilling. Medicaid is funded by both the state and the federal government. When state budgets get tight, Medicaid is often on the chopping block. With a growing aging population more people will be cut from Medicaid or alternatives found.
Medicare trustees predict that Medicare will be insolvent by 2029. Medicare works well for most enrollees. It became law in 1965 when life expectancy was about 65 or 70. Today, life expectancy is about 80. Those who reach 80 are also likely to reach 100.
Insurance is the law of large numbers. Medicare has many numbers, but they are largely 65 and older and/or disabled. There are no young healthy people in Medicare to offset the costs of older, sicker people. If they could enroll, it would protect Medicare while offering younger members affordable insurance that would not depend on state funds.
If we want to keep health care affordable, simply open Medicare for everyone. People currently purchase private supplemental health insurance to cover what Medicare doesn’t. People would be free to do the same. Medicare is a public insurance, but contracts with private physicians. It is a public/private enterprise.
Medicare for everyone would be the most comprehensive, most affordable and least disruptive way to offer affordable health insurance for everyone. It is that simple. Health insurance is the law of large numbers.
Current Republican Proposal (July 14, 2017)
Here is a link to an excellent summary of the current legislation (7/14/17)
This plan doesn’t work. It hurts people–young, old, poor, those with chronic health problems It even cuts taxes on pharmaceutical companies and medical device which have helped to fund the Affordable Care Act (Obamacare).
Medicare for All would work and be the simplest, most effective and cost effective solution.
© Kathleen O’Connor, July 14, 2017