The Representor Article Archive - Fall, 2007

Insurance Info & Ideas
Is the sky really falling, as “SICKO” movie claims?
by Pat Brown
ERA RepCare Consultant, Associated Benefit Planners

Is Michael Moore’s movie “SICKO” simply an updated version of the old children’s fable “Chicken Little”? Is the sky really falling ... or is it happening only in California, Illinois, Massachusetts, Pennsylvania and Wisconsin?

In “SICKO,” Moore appears to be the Chicken Little of the current health care crisis. He loudly proclaims that the “sky is falling” and says we must all rush to “tell the King” of our fears about the crisis. Also, like the old fable, the essential facts about the acorn are just a single occurrence to a single character that becomes a “fact of momentous calamity for all of us.” The facts portrayed in “SICKO” are just as silly and universally not true as is the assertion that the “sky is falling.” Yes there are, have been and will be failures within our U.S. health care system, but the continuation of our private, non-governmental run system will not result in a “catastrophe” or calamity of here-to-fore unseen proportion relating to our health care.

Also, in conjunction with Henny Penny, Cocky Locky, Duck Lucky, Turkey Lurky, and Foxy Loxy, we are being asked to believe that the King (alias: our federal and state governments) can solve our health care issues and make us all less anxious about our future. As in the old fable, this is, alas, not true.

In “SICKO,” Moore asserts that “50 million U.S. citizens are uninsured.” Not true. According to U.S. government statistics, about 42 million are uninsured or under insured, and 50 percent of those are people between the ages of 19 and 29 who have always felt “bullet proof and immortal” and see no need for spending hard-earned dollars on medical insurance.

Yes, we must do something to help those who are uninsured to get coverage, but to completely overhaul our current system to accommodate the 14 percent (or less) of our population that are uninsured seems to be an unwarranted overreaction. Perhaps a universal tax deduction for the purchase of medical insurance should be tried first.

Moore asserts that Canadians are “happy” with their single-payer, tax-supported, government-run health care system and that they don’t have to wait too long for care. Not true. Canadian journalists recently joined together to agree with the Canadian Supreme Court to say that the Canadian health care system “is terrible. Canadians hate it, and the waiting time of months or years for surgery and care is unacceptable.” Some 800,000

Canadians and 900,000 Brits are currently on the waiting list for surgery and other medical treatments because the funds to pay for care are not available. In Sweden, the wait for heart surgery is about 25 weeks.

Moore also asserts that Canadians “have much greater longevity than U.S. citizens.” In a recent U.S. and Canadian study (HIU August 2007), it is reported that the U.S. and Canada have virtually the same longevity numbers, with Canadians exhibiting an average longevity of about three days more than an average U.S. citizen. To characterize three days as “much greater” is, in my opinion, fraudulent.

In “SICKO,” Moore cites government-run health care programs — like in France, Great Britain, Canada and Cuba — as examples of success. Not true. According to recent newspaper articles, Germany, France, Italy, Spain and most other socialized medicine countries are cutting benefits and looking for ways to lower the “runaway costs” for medical care. Their health care tax costs are high, the availability of needed care is limited, many new drugs are unavailable, waiting lines for care are long, and providers are governmental employees. In those foreign examples, the taxes collected by the governments, just for health care, amount to between 15 and 27 percent of income, in addition to income taxes collected for all other governmental activities.

Please keep in mind that, currently in the U.S., there is a separate payroll tax exclusively for Medicare amounting to 2.9 percent levied on all wages. Half of this 2.9 percent is paid by the employer, and the other half is deducted from all employees’ gross payroll amounts. Medicare currently covers about 40 million people, and if you extrapolate the current Medicare tax of 2.9 percent for 40 million people to all 300 million U.S. citizens, then the tax rate will be somewhere in excess of a 21.75 percent payroll tax on all U.S. wage earners if Medicare is expanded to cover all US citizens. This will be in addition to federal and state income tax withholding for other governmental activities. Also remember that this 2.9 percent payroll tax covers about 55 percent of the total Medicare costs, leaving the other 45 percent to be paid for by income taxes and the Medicare Part B and Part D premiums.

Today, there are at least three bills in the Senate and three bills in the House that expand Medicare or Medicare-type plans as the mandated single U.S. system. Single-payer systems don’t eliminate costs; they simply shift them from your pocket to your payroll taxes. You pay ... period. “Free health care” can become very expensive.

In the U.S., we currently have examples of tax-supported, single-payer, government-run health care systems such as Medicare, Medicaid and the Veterans’ program. They are far from paragons of fiscal and managerial successes. They are prime examples of annual budget cutting, reduction of benefits and lowering of payments for needed services. In these U.S. programs, the government makes the decisions about what to cover, how much to pay, what services will be available and who qualifies for coverage, just like the national health plans of Cuba, Canada, Britain and France. Just ask some of the veterans if they can get any of the new drug treatments. Just ask Medicare recipients why they spend an additional $100 (or more) monthly for a “Medicare Supplement” private insurance plan and an additional $25 to $80 monthly for Part D premiums. Ask a doctor how s/he will tolerate the 10-percent cut in the Medicare reimbursements schedule which is, by law, to take effect in 2008.

Do we really want a nationalized health care program modeled after (or as part of) Medicare?

One of the major issues in the next election will be health care. Be sure to ask your candidates about their answers to the question: What’s your plan for our health care system?

And let’s all keep in mind these current situations.

California recently realized that its proposed universal health care plans would increase costs by between $4 and $12 billion dollars, and the added 7.5 percent payroll taxes, 2 percent added taxes on doctors and 4 percent added taxes on hospitals won’t cover all the additional health care costs, leaving a $1.6 billion “shortfall.”

• Wisconsin recently realized that its proposed “single-payer” universal coverage plan would cost more than $15.2 billion per year or $3 billion more than the state currently collects in all income, sales and corporate income taxes. This is about $510 per month in higher taxes for every Wisconsin worker and would require an increase in payroll taxes by an additional 14.5 percent of wages (i.e., 10.5 percent added employer tax and 4 percent added employee payroll tax), just for health care.
  
  
• Massachusetts recently realized that its “universal health care plan” would be unable to cover all of the state’s uninsured population, even with an added state expenditure of $1.4 billion per year.
  
  
• Hawaii, the only state with a mandated insurance coverage law (for the last 30 years), still has 10 percent of the state’s population uninsured.
  
  
• In Illinois, proposed legislation would expand mandated medical coverage to include families and individuals earning up to 400 percent of the Federal Poverty Level (that reaches to $80,000 per year). This will be “paid for” by a new tax of 1-2 percent on all business transactions that “add value.” The cost is projected to be $500 million.

I guess that the sky is actually falling, but only in five states ... so far.

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2007 Electronics Representatives Association (ERA), Chicago, IL 60611
Originally printed in the Fall 2007 issue of The Representor
Cannot be reprinted without the permission of the Electronics Representatives Association (ERA)