A fierce debate is raging as to who will pay for this nation’s skyrocketing sick-care costs.
Private companies have scaled back sharply on health care coverage they used to provide. Employees now pay an increasing percentage of their medical insurance premiums, along with higher deductibles, co-pays, and no-pays (i.e., exclusions). Many businesses provide no health coverage to their employees.1,2
Based on the median income in the United States, the typical family cannot come close to paying the staggering cost of health care themselves.
It seems rather odd, but since neither business nor individuals can afford today’s sick-care costs, the burden is increasingly being borne by the sector least able to pay, i.e., heavily indebted state and federal governments.
The federal government is already saddled with a huge unfunded Medicare liability. No one has figured out where the money will come from to cover these future health care costs.
To put this into context, the most recent estimate of Medicare’s unfunded liability is $24.6 trillion.3 Yet total federal tax revenues taken in annually (which include Medicare premiums) are only around $2 trillion.4,5 As our current President stated last year, we are approaching a point where the government will have to spend more money on Medicare than every other federal program combined!6
The most recent government report states that the Medicare hospital trust fund will go bankrupt five years sooner than what was projected a mere twelve months earlier.7
None of these numbers are reliable. Congress and agency bureaucrats use all kinds of accounting gimmicks when projecting Medicare’s date with insolvency.
For instance, the unfunded Medicare liability was pegged at $37 trillion in 2009.8 That means the government should have had $37 trillion in a trust fund earning interest in order to meet its future obligations. But politicians constantly manipulate the numbers. The latest report reduced Medicare’s official unfunded liability to $24.6 trillion. The reason for these wild fluctuations is that in any given year, officials can create “assumptions” out of thin air, like assuming doctors will take major pay cuts. Congress has not enacted these pay cuts, but bureaucrats pretend they do in order to understate Medicare’s true unfunded liability.9
What no one in government understands is that health care costs are set to skyrocket even further as new drugs the FDA is app-roving are costing around $100,000 per patient.10-12 Be it $24.6 trillion or $37 trillion, the government does not have the money to cover its Medicare obligations.
And Medicaid, which provides health care for lower income people, also has trillions of dollars of unfunded liabilities that are being paid with tax and newly issued debt dollars.13
Why Aren’t These Criminal Acts Being Prosecuted?
Bernard Madoff was sentenced to 150 years in prison because he took investors’ money and diverted it to other purposes. The federal government forced Americans to pay Medicare premiums their entire lives. Instead of those premiums being placed in a reserve fund for future use, they were squandered on whatever was most politically expedient at the time, which included overpaying those with the right connections.
While Madoff will spend the rest of his life incarcerated, no one talks about bringing civil or criminal charges against those responsible for the largest Ponzi scheme in the history of the human race, i.e., Medicare with its $24.6 trillion of admitted unfunded liabilities.
Like the federal government, many local and state governments have also operated a Ponzi scheme of unfunded pension and health care liabilities they cannot pay.14-16
Since the federal government is mathematically insolvent, it seems ludicrous to assume that exorbitant sick-care costs can be resolved by any level of government.
While politicians aimlessly point fingers as to who should pay America’s medical bills, please remember that there is a real- world solution. Health care in the United States is so tightly regulated that it in many ways resembles the inefficiencies of Maoist China, where the economy was suffocated by erratic and illogical governmental decrees. As China lifted its regulatory stranglehold, prosperity flourished. It’s time for US leaders to follow China’s example and stop over-regulating medicine!
Even I Was Shocked!
For the enlightenment of new members, please know that the Life Extension Foundation® has sounded the alarm bells since the early 1980s about the health care cost crisis that must now be confronted. We said that unless the shackles of regulation are removed, this nation faced inevitable economic insolvency with little in the way of cures being found for age-related diseases.
I have written dozens of articles and made hundreds of media appearances attacking today’s broken health care system. I was not aware until recently, however, of how much my own health insurance premiums had gone up, since I was covered under a group plan.
For me, my wife, and two children, Life Extension is paying a staggering $17,000 per year! Since our group plan insures over 300 people, we obtain a considerable discount off the individual rate—yet the premiums, deductibles, co-pays, and no-pays are worse than ever.
I’d like to think Life Extension is the most efficiently run organization in the world. We can, at the moment, afford these outrageous health insurance premiums for our dedicated employees. But I know many businesses and individuals cannot, and certainly not the government, which is unable to pay for what it is already on the hook for.
We Have Been Deceived…
Look back over the past 30 years and ask how many cures for the diseases of aging have been found? One can argue the number is near zero!
Americans have paid outlandish prices for prescription drugs under the guise that pharmaceutical profits would fund research leading to medical breakthroughs. The problem is that real-world discoveries have not manifested. One can point to some treatments that prolong patient survival, but these are offset by lethal side effects inflicted by fraudulently approved therapies.17-19 The fact is that few real cures have occurred despite Americans spending more health care dollars than anyone else.
Unregulated medicine has made considerable strides, but the majority of the population does not know about these approaches, and vested financial interests have spent billions to ensure that the media, politicians, and bureaucrats continue suppressing them.
We have been deceived by those who associate regulations with beneficial outcomes. As it relates to medical progress, the opposite has occurred, i.e., excessive regulation is causing millions to suffer and die needlessly while health care costs skyrocket.20
Few understand that the underlying purpose of regulations is to provide a government-protected advantage to the group favoring the regulation. It’s not about how a regulation will protect the public, but a matter of how it can financially benefit a special interest.21
An often-cited example is the petition drug maker Wyeth filed with the FDA asking that a natural human form of estrogen called estriol be banned.22,23 The female hormone drugs Wyeth is selling (Premarin® and PremPro®) have been shown to inflict all kind of lethal side effects.24-31 Instead of spending money on research to come up with safer forms of estrogen (such as combining natural estrogens with indole-3-carbinol),32-34 it was much cheaper to persuade political hacks at the FDA to outlaw the competition (i.e., bioidentical estriol hormone compounds).35
Pharmaceutical companies have spent enormous dollars persuading the FDA to re-classify nutrients like pyridoxamine as prescription drugs so that they can monopolize them for their own economic benefit.36 If it were not for aggressive letter-writing campaigns to Congress by consumers, all dietary supplements would be expensive prescription drugs by now.
FDA—Failure, Deception, and Abuse
In 2010, a 498-page book was published exposing how FDA over-regulation has destroyed citizens’ health and this nation’s finances. Many more pages could be added based on what we have published over the past year alone.
The magnitude of the artificially inflated costs are beyond obscene. For example, an increasingly popular prescription drug in the United States is a testosterone ointment called AndroGel®. Last time we checked, pharmacy chains sell a one-month supply for $348. Many men who try it will continue it each month for the rest of their lives.
The cost of the active ingredient in AndroGel® is around $4. It costs a few more dollars to put it into ointment form under good manufacturing practices. So for less than $15 retail, consumers could purchase the same amount of testosterone as is in AndroGel®—if it were not for FDA over-regulation.
Even though transdermal testosterone delivery technology has been known for decades, and the patent for bioidentical testosterone expired a long time ago, the FDA only allows a chosen few pharmaceutical companies to sell it. When a compounding pharmacy tries to develop more efficient ways to make testosterone creams, FDA inspectors use existing regulations to stop them. The regulations mandate that individually compounded drugs be made from scratch. If a pharmacy tries to produce larger quantities in bulk, it is no longer classified as “compounded” according to FDA regulations and is therefore illegal.37
In this Orwellian tragedy, the annual cost of regulated AndroGel® comes to $4,176 whereas the same amount of topical testosterone in an unregulated environment would drop to only $180 a year.
Regulated testosterone thus costs 23 times more than free- market testosterone. And look who pays for it! If you have health insurance, you will likely face a $25-50 co-pay each month, while your insurance company is fleeced for the balance. If you are a low income individual and don’t have insurance, there are government programs (like Medicaid) that will pay the full retail price of AndroGel®. If you are not indigent and have no insurance, then you are stuck with the entire tab. Be you a taxpayer, co-payor, or out-of-pocket payer your finances are being eaten away by these absurd regulations. Is it any wonder why medical insurance premiums are increasing so sharply?
Consumers have to band together to demand Congress introduce emergency legislation that repeals the absurd over-regulation of medicine that exists today.
I have written a new book titled Pharmocracy that details how egregious pharmaceutical company profits are protected by regulations, and how these vested interests will go to any corrupt length to ensure these regulations are perpetuated no matter how inane they are.38,39
How Regulated Costs Add Up
Institutionalized corruption artificially inflates the cost of virtually every health care service.
Going back to the AndroGel® example, we estimate that more than 80 million American men could benefit by restoring their testosterone levels to youthful ranges.40 If these men are forced to use only FDA-approved testosterone drugs, the excess cost to the United States will be $319 billion each year for this one drug.
It used to be just a few years ago that when the entire federal deficit reached $300 billion, the public and some politicians complained. Yet the overpayment Americans are stuck with for this one class of drug (AndroGel® and others) because of FDA over-regulation may exceed previous federal deficits unless the law is amended.
When one considers there are thousands of medically related products and services that are artificially inflated by senseless regulations, it becomes clear that radical change is required to avoid an economic meltdown.