By: Karthik Kandamuri, and Jerry L. Rhoads, CPA and health care expert and consultant

Americans are you excited about the prospect of getting free health care?  Sounds like a great idea for a politically driven plan … so I’m thinking a working title of Debunking the free Medicare For All socialism proposal … that converts all Americans to a VA type debacle!  You wait in line to get any medical intervention with a bureaucrat deciding your coverage then denying it based on its not medically necessary then it takes five levels of appeal, using a $500 dollar per hour attorney, to get claims paid.

That’s what a Government administered single payer Medicare program currently does to keep costs down and seniors at their mercy.  Mr. and Ms. American, that’s what you get by forfeiting your current plan for Medicare/Medicaid for All. Then you qualify for Medicaid once you need nursing home care after spending down your assets to a burial fee of $2000 and labeled indigent … a ward of the State of Illinois that is 18 months behind paying the nursing home for your substandard custodial care until you finally expire.  Welcome to socialized medicine VA style.

As for current ratings worldwide America is the highest cost per capita and thirty-eight in quality.  Singapore a small country of four million is the lowest in per capita cost and first in quality. Their health care program is a collaboration of government funding and private enterprise focused on attaining efficiency in the delivery of services by tracking costs per case and episode that improves the quality while containing costs and pricing for aging patients.

On the other hand Democratic Socialists for Medicare for All https://medicareforall.dsausa.org/ is a campaign organized and paid for by the Democratic Socialists of America (DSA). DSA is the largest and fastest growing socialist organization in the United States.

They are a member-funded, member-run, and democratically accountable organization that fights for a political agenda that puts working people at the center. They believe that if we are to take on the enormous power of our political elite and their billionaire donors need an organization that truly represents the needs, aspirations and desires of the working-class majority.

They are organized into over 300 local groups across the country that organize and agitate for social reforms in health insurance, our schools and neighborhoods, at the ballot-box and in our workplaces.  And the majority of the most influential Democratic candidates have bought into this line of thinking to bring the masses to the Government’s freebees trough.

This is the Joe Biden with the “Public Option” which is Obama Care on steroids, Elizabeth Warren, Bernie Sanders and the so-called Squad with single payer “Free Medicare for All” replacing all current private health insurance plans including medical savings accounts. The rest of the pack are Democratic Socialist candidates that fall somewhere in between these two radical political economical bad policy ideas.

Critics (the Republican conservatives) of this impractical approach, also say eliminating private insurance could gut a major sector of the health economy. As of December 2018, private health coverage was directly responsible for almost 540,000 jobs, according to the Bureau of Labor Statistics. Economists note, though, that predicting how many jobs would go away — versus how many could be absorbed by the new system — is difficult, as is projecting any macroeconomic impact.

CAN YOU IMAGINE ADDING ANOTHER, 540,000 BUREACRATS TO THE FEDERAL GOVERNMENTS PAYROLL THAT NOW EXCEEDS $500 BILLION DOLLARS PER YEAR. PLUS, ANOTHER 100,000 STATE EMPLOYEES FOR STATE ADMINISTRATION OF MEDICAID AS THE SAFETY NET.  THAT MEANS ADMINISTRATIVE COSTS WILL EXCEED $1 TRILLION DOLLARS PER YEAR JUST TO OVERSEE THIS GIANT ALBATROSS.

On top of the administrative costs there is an expected cost of $14,500 per year medical care costs per covered American and aliens (330 million) for physicians, hospitals, pharmacies, dental, mental, eye care, therapies, durable medical equipment, transportation as promised by the Democratic Socialists.  Take out your calculators and you get an annual cost of $4.8 trillion for fee for services, plus the $1.2 trillion administrative costs equals in round numbers $6 trillion dollars per year, with no mention of preventive services or the declining health of Americans because of obesity, aging and drug use.

Would the average person and employers pay more? Of course, That’s not hard to forecast.  According to Sanders and Warren they would fund this hair brained idea with graduated tax rates capping out at 70% for those making over $5 million per year.  Even then there will be a $6 trillion annual deficit due to one trillion dollars per year for added bureaucracy and uncontrolled pricing by the providers, including 100% more fraud and abuse.

Employers would not pay what they currently do for health insurance, an outlay that’s only getting more expensive because of uncontrolled provider price increases.  Also, the employees would also likely get more generous health coverage. And lawmakers are pitching various other bills — see Warren’s wealth tax, Sanders’ estate tax or the 70 percent marginal tax on the wealthy touted by Rep. Alexandria Ocasio-Cortez (D-N.Y.) — that backers argue would generate revenue to pay for something like Medicare-for-all.  The added taxes of $6 trillion per year would drive each employed American and employers’ per employee tax up by $10,000 to $15,000 per year.  As usual, those younger employed workers would foot most of the bill.

Perhaps more significant, at least politically, are the implications for health care stakeholders like hospitals, insurers and drug makers. All stand to lose under single-payer, especially if it’s used to bring down health care costs. They’re already working to make their opposition felt. (That said, opposition from the health industry is not universal.)  Why not, currently they’re not held accountable for escalating costs and prices with marginal quality nor are there any requirements to produce an outcome for their income.

The failure in the current, so called Medical/Medicare Model, is directly attributable to the manner of funding and payment to providers for input not outcome.  All providers are accountable for establishing a diagnosis (input) as justification for payment (income) and no proof of output (outcome).  Since there is no requirement to justify price by cost, costs escalate and the Americans’ health continues to deteriorate.  This, in economic terms is a Monopsony (one buyer market) where the State and Federal government is the payer of last resort which kills the competitive forces of Enterprise and externalize the benefits for the covered lives.