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Keep your government hands off my Medicare!

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Frank Hill
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      Frank Hill

      Frank Hill has served as chief of staff to former Congressman Alex McMillan (R-N.C.), House Budget Committee staff, Commission on Entitlement and Tax Reform staff, and as chief of staff to former Sen. Elizabeth Dole (R-N.C.). He is currently the director of The Institute for the Public Trust in Charlotte, NC.

Below is one of my favorite signs from the entire health care debate over the past year.

If the federal government does not have its grubby big old hands all over the current Medicare system, then who does? The Tooth Fairy? Santa Claus? The guy from the Monopoly game with all his funny money?

We recently highlighted the apparent philosophical inconsistency when people who love more government, for the best altruistic reasons, decide not to send their tax refund back to Washington to help pay for expansion of government services they strongly support, i.e. health care reform under President Obama and Speaker Pelosi.

On the exact flip-side of the parallel universe are the people who, well-intentioned they may be, are seen holding signs such as this one above, screaming in protest against any ‘more socialism in America!’ all the while receiving enormous sums of federal taxpayer-supported programs such as Medicare.

Receiving copious amounts of taxpayer assistance in any form, ladies and gentlemen, is the very definition of ‘socialism’. We have had socialism creeping into our previously independent American cowboy psyche for at least the past 80 years or so in some form of government program or another.

Some of it has been progress like Social Security. It started as the ‘Supplemental Security System’ designed to get money to our moms and dads and grandparents who were starving during the Truly Large Recession That Turned into The Great Depression Because of Stupid Misguided Policies Like Raising Taxes, Cutting Spending and Limiting Free Trade. But universal coverage and an ever-growing population has a way of turning even the best, most altruistic programs of 80 years ago into something that are just simply unsustainable going forward given the laws of economics, finance and taxes.

Something has got to give, people. We can’t have ‘everything for nothing’ and not pay for everything you may want government to provide for everyone else. What is it going to be?

It is time to make some fundamental, hard decisions about what we want our government to do and, more importantly, NOT do. Then we can proceed with some firm set of political principles based on facts and figures, not emotions and polemics.

We personally support a government that defends our borders and provides a safety net to those who are physically or mentally incapable of providing for themselves. We don’t think the Founders would be very happy seeing a welfare state that encompasses even the very wealthy in our society and a tax system riddled with all sorts of special tax favors for this set of special interests (meaning ones we agree with) or that set of special interests (meaning those you support).

Here’s the truth about our current America health care system, to return to the sign above. It is already a form of ‘socialized medicine’ whether we want to admit it or not. Fifty percent of every dollar spent on health care in America today comes from a federal or state government source of funding in Medicare, Medicaid, HHS, or research from any of the alphabet-soup named agencies ranging from NIH to CDC.

The debate over Obamacare was not about replacing it with a pure private-based market system; it was about whether to push it more towards a complete socialized system more like the ones currently in play in Europe and Canada. And apparently, that is where we are heading even as HHS came out with a report that shows ObamaCare increasing the cost of health care, not decreasing it.

Remember, there are at least three intervening elections that have to take place before Obamacare becomes fully operational, if ever, in this nation.

Here’s some basic, useful and yet ‘inconvenient truths’ about Medicare that you should burn into your memory banks:

  • Medicare is NOT an insurance plan but a government-funded (read: ‘Taxpayer Dollars’) program that redistributes money from people like you to pay for the majority of every single senior citizens’ health care bills each and every year.
  • Medicare Part B is a mandatory-enrollment (meaning everyone is forced into it whether they can afford their own health care plans or not, like Warren Buffett or Bill Gates) federal program that is fully 75% paid for by taxpayers, not seniors.
  • The average senior pays about $300-$325/month for Medicare Part B health care coverage for physician visits and care. You, the American taxpayer, pays the balance of about $900-$1200/month per senior citizen. Times 40 million seniors. And now about to explode in number with millions of retiring Boomers. You do the math.
  • Medicare Part A is the hospital reimbursement part of senior health care paid for by current worker’s contributions through the FICA tax withholding on every one of your paychecks. Part A is just about to go into the red because there are not enough current workers (especially in this nasty recession) paying current payroll taxes into the Part A program to cover all the hospital costs of senior citizens.
  • We don’t have time to go into Medicare Parts C and D and any of the new Parts E-Z created by Obamacare but you get the bottom line: we can’t afford all of these programs either.
  • Medicare and our current private health care plans are NOT insurance plans in the strictest sense of the word. They are ‘health care payment’ plans that pay all health care costs ranging from checkups to minor problems. A true ‘insurance’ plan would invest money in a risk-managed, actuarial program to cover the catastrophic costs of large adverse medical outcomes such as heart attacks, cancer or car accidents for a very small percentage of people each year and leave the smaller costs to be paid out-of-pocket by every patient. The premiums for such a catastrophic high-end national plan would be dramatically smaller across-the-board and the American health care system could be saved, hopefully.

We do not need any more pandering or lip service coming out of either major political party in Washington. And with the advent of the Tea Party and the rise of registered Independent voters now approaching 35% in many states, we don’t need them to be walking around with signs like the one above that are completely incorrect at their core.

For the past 230 years of our history, the people have chosen wisely when leaders have leveled with them about the threats we have faced from the British, from slavery, from Japan, from communism. They will do so again when our leaders speak candidly and stop hiding behind the veil of PR advisors and spin by sycophantic* hangers-on.

‘Approval Ratings’ never got us out of any trouble before. Leaders have.

* comes from the Latin meaning ‘slanderer’ or ‘swindler’ which is appropriate

Frank Hill has served as chief of staff to former Congressman Alex McMillan (R-N.C.), House Budget Committee staff, Commission on Entitlement and Tax Reform staff, and as chief of staff to former Sen. Elizabeth Dole (R-N.C.).

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  • Frank Hill

    Katie:

    I apologize if it appeared as if I was ‘talking down to you”. I was not: I was only trying to point out the fallacy of not addressing the truth in these issues which prevents people from making better decisions and improve both SS and Medicare.

    For example, when SS was started, it was ‘universal’, primarily because the creators of the program didn’t think there would be enough political support, and therefore, ‘taxes paid’ to support the program. Remember, in 1935, only the very wealthy had much of any income to pay taxes on and they were the ones the government wanted to make sure participated in the program; hence, they were included as beneficiaries as well.

    Fast forward to 2010 and millions of middle-to-higher income folks. We could still draw the rather miniscule FICA taxes from Warren Buffett and Bill Gates during their lifetimes and exempt them from ever receiving one thin dime in SS benefits…and they would still support the SS system with their payroll taxes! So would millions of others as well. Wealthy people do not need to be on the SS rolls, period!

    Same with Medicare…take the wealthy off of the mandated Part B program…they can afford to buy their own hospitals in many cases if they want.

    I would much more prefer to see a government system assist people who really need SS and Medicare support and let the more well-off and affluent fend for themselves.

    My point in being direct about the difference between taxes and premiums is because many people suffer from that comparison and come to rely on something that really is not true. Medicare is not an insurance program anyone has paid into; it is a program that everyone has paid taxes into for Part A and only have contributed general revenue money to support retirees ahead of them for Part B.

    The main point is that we can not sustain both SS and Medicare in their current formats and it would be far, far better to take the necessary steps now and reform and correct the imbalances before the whole system goes under and no one gets helped. People who need help should get it…but not everyone in this country needs federal government assistance.

    be glad to continue the discussion as we go along…thanks for reading my posting in The Daily Caller.

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  • katleah65

    Mr Hill, thank you for your “respectful” response. FYI, no one appreciates being “talked down” to. With all due respect, I still don’t buy your premise. BTW, us “Seniors” aren’t “delusional” when it comes to what’s been happening to the Medicare and Social Security funds. As I stated, we did our part, paying into the fund. It’s the government’s irresponsibility that brought us to the present short fall. I don’t agree that the “Seniors” should pay the consequences. Revamp the program, but honor your commitments to the “Seniors”. Also, sorry that you chose to take me literally when I was trying to state my position concerning this issue. Yes, you are correct, “taxes” may have been a better phrase to use. Beside that point, those “taxes” were designated for the medicare and social security funds. You have to admit that that’s not what’s been happening. The funds have been used for other purposes other than what they were collected for. That practice is dishonest and needs to stop. I do agree that there needs to be some “updating” of our current Medicare & Social Security systems. But, on the other hand, it shouldn’t be at the “Seniors” expense. It’s not fair to make changes that leave “Seniors” with anything less that what was promised. “Seniors” don’t have the options or resources that the younger generations have. Our retirement nest eggs have been wiped out. Many “Seniors” aren’t able to go back to work due to physical limitations or illness. And with the current unemployment climate, there aren’t many positions available to “Seniors”. What I’m trying to relate, and obviously not doing a very good job of explaining to you, is that the status of the Medicare and Social Security’s funds are not of the “Seniors” making and it would be morally unacceptable to make their otherwise fragile circumstances worse. Mr. Hill, I respect your stance, and I hope that you in turn will truly consider the “Seniors” predicament. Thank you.

  • Frank Hill

    that is precisely the delusion we have to undo if we are going to ever solve this problem. Seniors in any generation have come nowhere near paying all of the money needed to ‘pay for’ their Medicare or Social Security benefits….no where near it.

    and the cost hare payments they make for Part B are 25% of the cost of the entire program…it started out being at least 50%…perhaps we should go back to that level.

    repeat after me: Payroll taxes are taxes! They are not pre-paid insurance premiums! There is a huge, magnificent difference between the two.

    and repeat again after me: “there is no SS surplus or Medicare trust fund! It is purely a matter of taxes in one day, payments out the next.

    Both are unsustainable in their current format and need to be modernized and updated to meet the needs of the 21st century, not the 20th century.

  • katleah65

    It seems that you have failed to address one major fact. “Seniors” have prepaid for their medicare for decades through payroll deductions. Even after retirement, they still make additional payments and cost share payments for their medicare. It’s not the “Seniors” fault that government entities have been raiding the medicare fund for decades leaving useless IOU’s in their wake. THAT’S why the medicare fund is in bad shape today. Now is it too much to ask the government to honor their agreement?