Notes Book

Medicare Overhead

I just heard congressman Anthony Weiner speaking on the John Stewart Show claim that Medicare overhead is about one percent.

I don't know what planet he is from, but I don't think it is in our galaxy.

First of all, that claim comes from the government: the same government that regularly looses hundreds of billions of dollars from the defense budget. The same government that hasn't produced an honest accounting of its finances for decades, if ever.

You have to include in that accounting the enforcement apparatus of the US Government. I don't think anyone believes that all those healthy young people would be paying into that Medicare fund without the threat of jail from the government.

The cost of the government enforcement apparatus is immense: especially, if you include the costs of all the efforts to evade enforcement. And including those costs is entirely reasonable since private health insurance does not have to bear the burden of enforcement, and it takes no effort to evade their fees other than throwing away a piece of junk mail now and then.

I recently had needed to be fingerprinted at the local Sheriff's office for an application to become a Foster Parent. There I saw real government overhead in living color. The procedure took about a half an hour: 28 minutes of waiting and two minutes of fingerprinting. During that time I saw about 12 people standing in the hallway gossiping and laughing, and one person working, sort of. That is a typical example of real government program overhead in action. Of course you can find more examples at the DMV, the Post Office, or most government organizations, just as you can find many examples of pleasant and efficient service in privately owned businesses. The enforcement arms of government bureaucracy seem to be the worst offenders.

Not that the so-called private insurance industry in the USA is a lot better than Medicare. It is also a government-supported cartel. The fact that corporations can directly deduct health insurance from income taxes, and that is effectively forbidden to private individuals by the "standard deduction" trick has resulted in most doctors office visits being "covered" by insurance. The cost of insurance paperwork is a significant portion of the expense of any health clinic now. If we really want to reduce the cost of health care, we need to allow all medical expenses to be deducted from income by anyone, or better yet, get rid of the income tax altogether.

The current "health care debate" is merely an attempt by the insurance industry to mandate that everyone pay premiums, as they have successfully done with auto insurance. The mandate has successfully been put in place, but if you are hit on the road, the chance is about one in seven that the person who rams you is uninsured.

But the high price of health care in this country is only partially caused by the government supported insurance cartel. The main culprit is the government supported medical cartel. The barriers to entry into all levels of the medical industry have become so high that we have a far fewer doctors and nurses than we should have, so prices are a lot higher than they should be.

If we truly want to reduce the cost of health care, we should abolish the practice of state licensing of medical workers, or at least ease the licensing restrictions.

Doing so would increase both the quality and quantity of health care. Medical licensing protects the careers of incompetents because an extremely limited number of people are licensed to practice. If there are more options, we can make a better choice. It is as simple as that.

If we want to make health care better, we need to get the government out of the health care business. If we want to make all aspects of our life better we need to reduce or eliminate government.