August 18, 1997
Phasing Out Medicare
By Joseph Kellard    

    Because Medicare was egregiously enacted as a “guarantee,” most 
politicians evade that instead of their continuous “reforms” to save 
that morally and already financially bankrupt system from extinction, 
reforms must be enacted to send it gradually into extinction.. 
    The Medicare system sacrifices the young to the old, and is thereby
fundamentally immoral and therefore unworkable. Thus, in regard to 
its failure, Americans sound their inevitable mantra: “Something 
must be done.” But every “something” politicians enact, such as 
government mandated HMOs and the Kennedy-Kassaubaum bill, 
ultimately intensify the problems caused by their original programs 
and reforms. 
    HMOs essentially seek to forcibly cut the expensive bills of 
high-risk patients by limiting care and by financing their expenses 
with the surplus money from healthier patients; therefore, HMO’s 
sacrifice the healthy to the sick. Insurers are thereby pressured to drop 
costly and risky patients. The more treatment is refused, the more the 
“gatekeeper”, i.e., the bureaucrat, gets paid.
    The Kennedy-Kassebaum bill, passed last year, forces insurers to 
cover those costly patients. Since premiums would thus rise and 
pre-paid plans would limit more care, the managed care 
administrators would have to intensify pressure to withhold care.
    Medical Savings Accounts (MSAs) are the only rational, potent 
solution to the essentially corrupt HMOs and similar “reforms” now in 
vogue, since they encourage and beget what individuals must 
exercise in a free nation and reality: the personal responsibility to 
provide for one’s own medical expenses.     
    A Medical Savings Account is a tax-free account. The amount 
your employer pays in health insurance is placed in a savings 
account, and thereafter you would use that money to purchase your 
own health insurance and medical care, whether it is a $250 
deductible policy, an HMO, a catastrophic insurance policy, or 
anything you want. MSAs transfer your money from your employer 
back to you. Last fall Congress inaugurated these “experimental” 
accounts; however, they are limited to fewer than one million 
self-employed Americans. 
    MSAs will put an enormous downward pressure on prices and 
greatly reduce the costs of health care by instituting a free market and 
consumerism. They will provide individuals the freedom and thus 
encourage the personable responsibility to exercise judgment and 
economy in regard to what medical plan they want and what doctor 
they will visit. . 
     MSAs will allow all individuals to deduct 100% of their medical 
expenses, including health insurance premiums, from their taxes, and 
allow healthier individuals to leave pre-paid programs. Those plans 
could no longer use surplus money from healthier individuals to 
cover those who need extended care. Premiums would rise and thus 
drive more individuals out of pre-paid plans. This entails phasing out 
    But what about the people who paid into Medicare but are now too 
old to work and save on their own? Medicare can nevertheless be 
phased out over an allotted time span without effecting them.
    People who are now 65 and older will receive their Medicare 
benefits. However, those who are younger will gradually get X 
percent less from Medicare and be obligated to save on their own to 
cover that loss, until those 35 or younger will be ineligible for any 
Medicare benefits. Both age groups will use tax-deductible income 
placed in MSAs, which earn interest, for their future medical 
expenses. What they save on insurance deductibles and medical bills 
through their MSAs today can be used for their retirement expenses, 
whether on medical or anything they desire. As younger individuals 
accumulate funds in their MSAs for retirement, the eligibility age for 
Medicare can progressively be raised over the allotted time span until 
that system is phased into extinction.
    Many politicians, including President Clinton, oppose MSAs 
because they will drain the collective medical insurance pool that 
sacrifices the healthy or young to the sick or old. This is precisely 
what MSAs will do. They undercut the whole pre-paid system that 
continues to strengthen the government’s paternalistic, coercive 
powers that shackle individual freedoms.
   Our statist politicians and their supporters have to accept that 
freedom and adulthood demand individuals to take responsibility for 
their lives and make their own judgments and choices.

Joseph Kellard is a freelance writer. He also publishes a quarterly 
newsletter: Axiom 3. To hire him or for information on his 
newsletter, he can be reached by e-mail at  
---   or by mail: PO Box 334, Rockville Centre, NY 11571-0334

For information on Medical Savings Accounts write to: 

Americans for Free Choice in Medicine
1525 Superior Avenue Suite 100
Newport Beach, CA 92663
Telephone: (714) 645-2622
Electronic Mail:

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