Renegotiating medicare's exemptions under NAFTA

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Kaspar Hauser
Renegotiating medicare's exemptions under NAFTA

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Kaspar Hauser

Thomas Walkom believes that Medicare is up for grabs in NAFTA renegotiations:

https://www.thestar.com/opinion/commentary/2016/12/12/donald-trumps-naft...

Here's a form letter I prepared that you might want to modify and submit to the PM and the leaders of the NDP and Conservatives:

    justin.trudeau@parl.gc.ca

      rona.ambrose@parl.gc.ca

        thomas.mulcair@parl.gc.ca

          Dear Prime Minister Trudeau:

            My name is __________. I am a Canadian citizen who lives in __________. I am writing to you to express my profound concern over the vulnerability of our Medicare system during the NAFTA renegotiation process.

              NAFTA currently contains exemptions that protect Medicare from encroachment from private insurers and for-profit hospitals. American health insurers likely see Canada as an opportunity for corporate penetration. It is very probable that the United States will exert intense pressure Canada to eliminate these exemptions.

                I would not be able to afford private health insurance, and neither would any of my loved ones or friends. If I lose the protection of Medicare, we will likely face the very real danger of immiseration. The same is undoubtedly true of people across our country. Without Medicare, Canadians would experience a collapsing standard of living that would rival the effects of the termination of NAFTA.

                  I do not want to see an abrupt withdrawal from NAFTA, as I realize that the economic consequences would be dire. They would not, however, be as dire as the exposure of all Canadians to an American-style health care system that would threaten to drive much of our remaining middle class into medical debt and bankruptcy and that would increase our infant mortality rates, shorten our life expectancies, and drive increasing numbers of people to addictions and suicide.

                    The social and economic chaos generated by such a disaster would be enormous. Any party that allowed Medicare to be replaced by a two-tier American health care system would be condemned to the political wilderness for a generation. During this terribly difficult renegotiation, I implore you to ensure that Medicare’s protected status remain inviolate.

                      Thank you for your time and consideration of this grave matter.

                        Yours,

                           

                          Kaspar Hauser
                          quizzical

                          i don't believe Canadians would allow this for minute and attempting it might cause rioting in the streets even.

                          Unionist

                          quizzical wrote:

                          i don't believe Canadians would allow this for minute and attempting it might cause rioting in the streets even.

                          I agree.

                          Trouble is, Canadians might not know it's happening. "Medicare" is different in every province, its funding is mysterious to ordinary folks, what's covered and not covered is fluid and opaque, two-tier health care is growing by leaps and bounds... And none of this has caused rioting yet, because it's incremental and hard to pin down.

                          Sure, if some new trade deal said, "Signatory governments may not provide any funding to health care" - people would be in the streets. My fear is that it won't be as obvious as that, but just as dangerous.

                          Edzell Edzell's picture

                          Unionist wrote:
                          "Medicare" is different in every province, its funding is mysterious to ordinary folks, what's covered and not covered is fluid and opaque, two-tier health care is growing by leaps and bounds... And none of this has caused rioting yet

                          Maybe it's time.

                          But Provincial politics will rule out any medicare that's consistent and transparent across the country. Cry

                          quizzical

                          if it was happening they would soon know and the rioting would start.

                          i believe though it would become well known quickly.

                          the snow birds who come into my salon and who are evangical Harperesque supporters too even keep a close eye on what's going on.

                          they see the financial damages on the people they get to know over the winter and bring the stories back. they would be roaring from the church tops.

                          Kaspar Hauser

                          I hope you're right, and I hope it would do some good.

                          Misfit

                          I think Unionist is right on his one. If inflation is say 5% and the Federal government negotiates say a three percent increase in transfers to the provinces, well guess what? That is a hypothetical 2% cut to our healthcare and the provinces will need to make that up themselves or defund something somewhere. Both the Federal Liberal and Conservative governments have been strangulating our health care system for the last forty years. Eventually it will all be privatized and they will say that it didn't work. You cannot have Conservative party leaders talking about abolishing corporate tax rates entirely without sacrificing health care funding. Even the evangelicals will not want to pay the higher tax dollars to support other people's healthcare when they can pay for their own healthcare through private insurance premiums. Forty years of suffocating our healthcare system. Eventually, it will go.

                          Sean in Ottawa

                          Misfit wrote:
                          I think Unionist is right on his one. If inflation is say 5% and the Federal government negotiates say a three percent increase in transfers to the provinces, well guess what? That is a hypothetical 2% cut to our healthcare and the provinces will need to make that up themselves or defund something somewhere. Both the Federal Liberal and Conservative governments have been strangulating our health care system for the last forty years. Eventually it will all be privatized and they will say that it didn't work. You cannot have Conservative party leaders talking about abolishing corporate tax rates entirely without sacrificing health care funding. Even the evangelicals will not want to pay the higher tax dollars to support other people's healthcare when they can pay for their own healthcare through private insurance premiums. Forty years of suffocating our healthcare system. Eventually, it will go.

                          I think the math on inflation is much less clear that you suggest. The problem is that economy wide inflation has many influences. cheap imports affect overall rates. Health care is labour rather than foreign goods intensive, additional treatments cost more rather than less -- even if they offer more hope and better lives. Greater demand is created becuase people want all that modern health science can offer and the fact is it offers more all the time. So if inflation is at 2%, health costs will increase by more. Holding the increase to an inflationary average is an effective reduction. This is the thing people do not understand.

                          Tying health care costs to GDP is stupid -- these are unrelated.

                          Healthcare costs ought to be tied to need, opportunity for benefits from science and national value instead of GDP and inflation. These markers set the system up to fail.

                          Mr. Magoo

                          Quote:
                          I think the math on inflation is much less clear that you suggest.

                          OK, but let's imagine bargaining over a new contract.  The employer offers a 3% wage increase, but inflation is pegged at 5% over the same terms.  Would anyone suggest that the employer is, in fact, offering a loss of wages, in real money terms?

                          Sean in Ottawa

                          Mr. Magoo wrote:

                          Quote:
                          I think the math on inflation is much less clear that you suggest.

                          OK, but let's imagine bargaining over a new contract.  The employer offers a 3% wage increase, but inflation is pegged at 5% over the same terms.  Would anyone suggest that the employer is, in fact, offering a loss of wages, in real money terms?

                          A completely bogus comparison.

                          An employer offering a raise to an employee pegged at inflation or more when the employee is facing costs relative to inflation is not comparable to comparing an inflation based number based against a basket of goods increasing at a different rate.

                          Let me make a better comparison: Say your fictitious employer is offering employees in Toronto a 2% raise becuase Canada has a national 1% inflation rate but the inflation in Toronto is really 5%. In this case people would say that employees would take a loss in real terms.

                          Your problem is the inflation of costs in the health sector is not the same as it is in the general population.

                          Now that is just one of the problems with your comparison. Here is the other:

                          The inflation numbers are based on inflation faced by each person (per capita) costs. However, health care funding is not based on a fixed population but a growing population, particularly growing in demographics where there is need. So let's look at this again-- Assume inflation grew by 2% and the population also grew by 2%. Then the real costs (if inflation in the health sector were the same as in the economy generally) would be x + 2% (for inflation) + 2% for population increase.

                          These inflation figures do not take account of population growth increases -- you need to consider both.

                          As I also explained GDP figures are irrelevant (even though they do take account of population size as well as economy size).

                          Both figures are a faulty basis. Every premier -- just about -- in the country is trying to explain that to the federal government.

                          Mr. Magoo

                          Quote:

                          A completely bogus comparison.

                          An employer offering a raise to an employee pegged at inflation or more when the employee is facing costs relative to inflation is not comparable to comparing an inflation based number based against a basket of goods increasing at a different rate.

                          Perhaps you didn't follow what I was suggesting.  Not an employer offering a raise "pegged at inflation or more", but a raise pegged at inflation or less.

                          Quote:
                          However, health care funding is not based on a fixed population but a growing population, particularly growing in demographics where there is need.

                          OK, but inflation in the health care sector also means a syringe that cost $1.00 in 2014 costing $1.09 today.

                          Sean in Ottawa

                          Mr. Magoo wrote:

                          Quote:

                          A completely bogus comparison.

                          An employer offering a raise to an employee pegged at inflation or more when the employee is facing costs relative to inflation is not comparable to comparing an inflation based number based against a basket of goods increasing at a different rate.

                          Perhaps you didn't follow what I was suggesting.  Not an employer offering a raise "pegged at inflation or more", but a raise pegged at inflation or less.

                          Quote:
                          However, health care funding is not based on a fixed population but a growing population, particularly growing in demographics where there is need.

                          OK, but inflation in the health care sector also means a syringe that cost $1.00 in 2014 costing $1.09 today.

                          I did get your point -- I also explained why it is irrelevant -- or did you read to the end of my post?

                          Health care funding is not a gift to the provinces for them to use how they want -- it is reimbursement of a share of a real cost. The bottom line to the provinces is contribuition of feds minus cost of delivery. If the result of that is an increasingly greater negative number then yes they are getting less -- no matter what other irrelevant math the feds want to throw at the situation,

                          Also, that cost changes not just by inflation (specific to a particular sector not nation-wide) but by volume (population). And the model using GDP is even worse with no relationship at all to the issue.

                          Now please comment on the issue of inflation not being the whole story but volume being relavant as well (population growth and demographic change). and you still have not connected how a national rate of inflation can be used failry in a sector-specific case.

                          At least try to acknowledge one of my two major points -- then we can work on the other one. Ignoring both does not leave us with any progress at all.

                           

                          ETA: Imagine I am sharing the cost of rent with you. Rent was 1000 per month. It is going up to $1200 per month. You were paying $500 (half) and now you want to pay $510. Do you think I should be happy? Do you think I have gained anything in real dollar terms on this shared cost venture?

                          Misfit

                          Thank you Sean, and I am glad that I posted what I wrote, but I just used inflation as an overly simplistic example to point across to someone how the Federal government has been slowly suffocating our national health care system down the drain for forty years without spurring riots on the streets. You also forgot to mention the aging baby-boom generation as a growing cost factor.

                          KenS

                          Speaking of math- not that this has much to do with the discussion. But the core of the babyboomers are now 55-70.... in 10 years we  will be 65-80, with only a modest drop in numbers from mortality. But this is not news, and not necessarily a basis for the alarmist predictions about helath care costs it often accompanies.

                          I suspect that the advances in expensive life saving technology and hyper-expensive cancer drugs, are probably bigger drivers of increasing health care costs than increasing numbers and proportions of old folks. (Not to mention increases in highly preventable diseases like diabetes.)

                          End of tangent.

                          Misfit

                          And a national federally financed drug plan could help offset some of those drastically rising drug costs.

                          Misfit

                          There is a YouTube video called "Tommy Douglas on the Future of Medicare (1983)". I cannot link it up with my device, but it is just as much relevant to watch today as it was 34 years ago.

                          Misfit

                          Ken, I am not blaming or singling out any demographic group for increases in government spending for healthcare, but as with CPP and other federally regulated programs like healthcare, there needs to be a serious proactive approach for forseeing future needs and then projecting federal spending to appropriately tackle those needs as they arise. Both Liberals and Conservatives have proven that they have an aversion to long term forecasting. Maude Barlow talked about the CPP bubble as far back as the late 80s and early 90s that the government needs to start increasing CPP deductions then to be able to meet the baby boom retirement drain on the CPP pool, and the Federal governments of both parties sat back and did absolutely nothing. This is partially what Tommy Douglas means when he says "death by strangulation".

                          Sean in Ottawa

                          Misfit wrote:
                          Thank you Sean, and I am glad that I posted what I wrote, but I just used inflation as an overly simplistic example to point across to someone how the Federal government has been slowly suffocating our national health care system down the drain for forty years without spurring riots on the streets. You also forgot to mention the aging baby-boom generation as a growing cost factor.

                          I did not forget -- I perhaps should have been clear -- this is what I meant by demographic change. Growth has been in the population generally and more particularly in the demographics that need greater health support. As well demand for newer technologies and treatments are naturally driving health costs. This is not a bad thing -- at reasonable cost we can improve lives more -- but we should expect that this cost must be paid for and will increase the cost of the health envelope.

                          I definitely agree with your drawing attention to pharmacare. This is a no-brainer as it would add tremednous value while supporting the healthcare system. The cost of pharamcare has been shown to reduce other costs in the system, socially and economically. There is no net cost to pharmacare when you consider all benefits it brings.

                          Sean in Ottawa

                          It is important to note that the aging population is not the scary thing many thought it was either. The reason is that healthy life has also been extended. The bulk of health costs are shortly before end of life. Misfit you are right, a proper pharmacare program (and better primary care) can support a longer low cost life. With technology and differeing health the range at which people become ill (and frail) now varies more than ever serving to spread out this aging burdon more than the statistics may first suggest.

                          It is also important to note the value of better longer contributions from more experienced workers to the economy. People learn a great deal in their worklife. An aging population with people healthier longer means that there is a greater benefit the economy can draw from these people. When they retire if they have economic ability to do so they also represent the core of our volunteer community. We must not minimize the benefits of an aging, more experienced population. Better policies for mentorship are being examined across all sectors in recognition of these values.

                          Misfit

                          Sean, I always find you informative and refreshing, and I am very pleased that you have contributed to this thread. If I offended any baby boomers I am truly sorry. That was not my intention. Government funded programs can be set up to work for perpetuity or they can be set up to gradually fail with the excuse that they were not sustainable and that privately funded delivery is more efficient, cheaper and better. It is a bull shit battle that has been going on for decades and I find it rather tiresome.

                          Unionist

                          Misfit wrote:
                          Government funded programs can be set up to work for perpetuity or they can be set up to gradually fail with the excuse that they were not sustainable and that privately funded delivery is more efficient, cheaper and better.

                          Exactly.

                          The math tells the story. These numbers are for 2015:

                          Life expectancy (combined genders)

                          U.S.: 79.3

                          Canada: 82.2

                          Infant mortality (rate per 1000 live births, up to age 5):

                          U.S.: 6.5

                          Canada: 4.9

                          Health care spending (all sources) per capita, in USD:

                          U.S.: $9,451

                          Canada: $4,608.

                          [First two stats are WHO, last is OECD.]

                          Sean in Ottawa

                          Unionist wrote:

                          Misfit wrote:
                          Government funded programs can be set up to work for perpetuity or they can be set up to gradually fail with the excuse that they were not sustainable and that privately funded delivery is more efficient, cheaper and better.

                          Exactly.

                          The math tells the story. These numbers are for 2015:

                          Life expectancy (combined genders)

                          U.S.: 79.3

                          Canada: 82.2

                          Infant mortality (rate per 1000 live births, up to age 5):

                          U.S.: 6.5

                          Canada: 4.9

                          Health care spending (all sources) per capita, in USD:

                          U.S.: $9,451

                          Canada: $4,608.

                          [First two stats are WHO, last is OECD.]

                          Good summary.

                          Certainly there are challenges to the health care system and real reasons budgets must grow but the notion that it is not sustainable is false. Indeed doing without such a system is unsustainable.

                          The other thing that threatens the system is its limitaions. It started as a hospital and Dr system and did not grow as needed. Pharmacae, eyecare, dentistry etc are all needed extension which serve to solidify the system making it more comprehensive and stronger.

                          Sean in Ottawa

                          Misfit wrote:
                          Sean, I always find you informative and refreshing, and I am very pleased that you have contributed to this thread. If I offended any baby boomers I am truly sorry. That was not my intention. Government funded programs can be set up to work for perpetuity or they can be set up to gradually fail with the excuse that they were not sustainable and that privately funded delivery is more efficient, cheaper and better. It is a bull shit battle that has been going on for decades and I find it rather tiresome.

                          Very kind of you.

                          I don't know if anyone was offended. I am on the cusp to gen x - not really a boomer but I did not see anything wrong with what you said. I responded becuase many people have false impressions of what aging means to healthcare. -- On the one side denial that it makes any difference which is false and on the other panic that it is a looming disaster. Neither is true.

                          As has been said before Canadian medicare is as sustainable as we want it to be. The aging population ought to be planned for but it is not the threat to medicare that it is made out to be.

                          kropotkin1951 kropotkin1951's picture

                          In BC we have a facade of health care services. Emergency care is still in place but any kind of community health services that are there on paper are almost impossible to access. Some of our Doctors will be demanding to be at the table to help dismantle our somewhat universal system and make it completely two tiered. Don't forget it was the Doctor's who were front and centre as the main opposition in Sask when it was first introduced. The American insurance industry aided and abetted in the Doctors fight back campaign. Expect the same unholy alliance to reappear on our landscape.

                          sherpa-finn

                          Two quick points:

                          Here is the link to the Tommy DOuglas speech from 1983 that Misfit referenced above: https://www.youtube.com/watch?v=C2oUInTUlAM

                          And just to affirm Unionist's point above "Sure, if some new trade deal said, "Signatory governments may not provide any funding to health care" - people would be in the streets. My fear is that it won't be as obvious as that, but just as dangerous."

                          We already have two trade deals on the table (CETA and TPP) that contain explicit provisions to increase patent protection / affirm the monopoly rights of patent owners. This could possibly have YUGE consequences on drug costs, but I have seen little of this percolate into public discourse on the trade deals, beyond the usual suspects.

                          Sean in Ottawa

                          sherpa-finn wrote:

                          Two quick points:

                          Here is the link to the Tommy DOuglas speech from 1983 that Misfit referenced above: https://www.youtube.com/watch?v=C2oUInTUlAM

                          And just to affirm Unionist's point above "Sure, if some new trade deal said, "Signatory governments may not provide any funding to health care" - people would be in the streets. My fear is that it won't be as obvious as that, but just as dangerous."

                          We already have two trade deals on the table (CETA and TPP) that contain explicit provisions to increase patent protection / affirm the monopoly rights of patent owners. This could possibly have YUGE consequences on drug costs, but I have seen little of this percolate into public discourse on the trade deals, beyond the usual suspects.

                          Of course things will never be as simple.

                          Reductions in medicare will be seen as ways to make it sustainable (even though it already is). Medicare will be accused of holding back the economy when it is held up as the obstacle.

                          With the recent success of fake news and noise, we can expect the whole new era of propaganda to be employed right across the spectrum of policies and programs.

                          People will barely understand what they are demonstrating for or against when the rhetoric of one side is used to confuse by the other.

                          As it works there will be those on both sides who accept that this is the new normal and they will effectively normalize this kind of post-truth approach such that it will be said that both sides employ the tactic. It will not matter if it is a false equivalent or if one side uses it a lot more.

                          When we speak of previous authoritarian styles of apporach, we have to understand why the modern version looks different. In the past there were large media and state media organizations. Propaganda would be a tool to link media to the state interest. Now organizing social media with its perception of independence into propaganda armies with organized connections including false inciting accounts provides a more effective connection. The medi channels that have more accountability through public ownership and reputation can be discredited to allow more shadowy sources to take over with no responsibility for truth and no scandal when falsehoods are discovered. The freedom of speech of an individual has a different standard than the responsibility we expect from a news organization. Individuals, rather than than news organizations can defend intentions to lie as basic freedoms. All this is an important context to the medicare debates as what little accountability for impressions being created about public health care is now completely removed. People will make up numbers without there being any sustained demand or even responsibility to provide a source. Can medicare survive this? Of course medicare is not the only target.