March 24, 2004
More Warnings About Medicare: Insolvency Likely by 2019
And the economic news just keeps getting worse and worse, under the stewardship of Bush Jr. Seems the new Medicare law will not cure all senior health care ills as the Republicans would have us believe. And with each passing day the law once hailed as the savior of seniors and the disabled, is nothing more then a prescription for disaster, one which might leave the Medicare trust fund drained of reserves by 2019, some seven years earlier then expected.
Health and Human Services Secretary Tommy Thompson and in his annual report on the Medicare Trust Fund stated that increased health care cost—which has to include prescription drugs—and decreasing revenues (tax cuts), are the primary motivators behind the revised forecast. He went on to predict that changes to the program called for under the new Medicare law will help slow the growth in spending, however, this predicated on seniors enrolling in managed-care programs.
Thompson stated
"When you use the opportunity to allow the free-market system to work, it has the tendency to drive down costs."
Am I missing something or haven’t health care costs risen exponentially over the last 20 years under the free-market system? The free-market has not held down the cost of health care thus far, quite the contrary, as Thompson points out in his own report, health care cost continue to rise at an alarming rate. What makes him, or anyone else think that as seniors and the disabled enroll in private managed-care programs, the cost of health care will even out and eventually decline? What indicators are there in today’s economy that this happy circumstance will come to pass?
Vocal opponents (democrats, independents and other people with common sense) of the newly enacted Medicare law state that there is little evidence the changes called for under the law will slow the growth in health-care costs. It is more likely they contend, that little will change and that as is the trend today, managed care companies will make it more difficult—not less—for seniors and the disabled to see specialists, and continue to line their pockets with the resulting profits.
The Medicare trustees report blamed last years “higher spending” and “lower tax revenues” as primarily responsible for shortening by two years the estimated insolvency date of the trust fund. Wasn’t it Vice President Dick Cheney who said—irresponsibly—that budget deficits were nothing to worry about? Seems they are indeed something to worry about.
The report went on the state that from 1998 to 2002, health care costs spiked 35 percent. By 2002, the last year for which figures are available, such costs accounted for nearly 15 percent of the nation's gross national product, and more than likely accounts for a higher percentage of GNP today. Last year, employer-sponsored health insurance premiums rose by 14 percent the report said. And this year my health insurance premiums rose some 12 percent over last year, and the price I pay for prescription drugs increased again for the fourth straight year. Yes, the free-market is really helping me lower my health care, and prescription drug costs.
Still think the Bush economic plan of tax-rebates and spending is good for the overall fiscal health of the nation? I go on record as saying that the Medicare Law needs to be repealed, and redone right, better still Bush and the Republicans need to go before the U.S. has to declare bankruptcy.
Posted by V. Edward Martin at March 24, 2004 10:50 AM(1) it is a rather insidious fallacy that the free market has done a bad job on medicine because health care costs are going up. These costs are going up because health is getting so good, so complicated, so impressive at prolonging the life of every American that we now have people living longer and longer- every year. Every single indicator in America for every economic, racial and social class is towards longer life, better standards in terms of health ect. (There is no life expectancy difference between rich and poor Americans, either). You can thank the free market for that, but you can also be assured that if people are now living longer, surviving with the same exact deceases that used to kill them, healthcare costs are gonna go up- its simple logic. It is the highest of high ironies that the overall cost of medicine, which reflects how much longer we are living and how many more medicines are available to us, is pointed to as a PROBLEM. If the quality of healthcare, medicines remained the same, the price of health care going up would be a problem- there is no evidence that this is the case.
(2) It is even more ironic that one could say that Democrats could provide a solution to the sink-hole problem that is Medicare. Its not the details of bush’s plan that is causing these problems, nor is it his tax cuts, it’s the unaffordable notion that the tax payers must provide perception drug coverage- this is an idea that dems have been pushing
(3) make no mistake, if this was a plan by the democrats, they would be sticking by it. I think it’s a terrible plan, for the same reason I think all these schemes that try to throw more and more money into this inefficient scheme, are terrible plans. The government needs to get out of the Medicare business, and stop taking people’s money and throwing them into this program which is going to go bankrupt soon.
(4) Nor are you going to be able to “fix” Medicare, because politicians are running it and they are belong to special interest groups like the AARP. Currently, there is no way we can afford prescription drug coverage- any economist worth his salt would tell you that. Yet the democrats keep pushing for more and more Medicare, despite the fact that its already too expensive (under Bush, the republicans seem to be going the same way). If you were really concerned about Medicare being sustainable long-term, you would want it to be a moderate program, one which could be support under the current tax structure, economy ect. But having given in to the semi-socialist notion that every person, regardless of anything else, somehow “deserves” prescription drugs created by private companies, the agenda has pushed Medicare, social security ect- as a system which is determined by NEED rather than by the resources available- the height of none-sense and a prescription for disaster (no pun intended). So, democrats, keep pushing to increase this system- it will just collapse, and collapse even quicker under the Dem’s plan than under Bush’s. And social security will suffer the same fait. Meanwhile, you will have created a generation of detrimental reliance on these unsustainable pyramid scheme programs, where they could have invest this tax money into a system that wouldn’t collapse- the market. Such is the left’s vision of “compassionate” government, it’s a shame that Bush has bought into it as well- how progressive.
It is even more ironic that one could say that Democrats could provide a solution to the sink-hole problem that is Medicare.
Here’s a Democratic plan to fix Medicare:
That should do the trick.
1. The more people in a program, the cheaper it is for the individual and the system becomes better funded. We can make it affordable for individuals (tax credits, maybe?) and stop requiring businesses pay for it.
2. Constrain costs by allowing drug companies to make a reasonable profit (including R&D costs) on a drug, then let other companies compete to make it cheaper, use technology to streamline non-medical health care costs (paperwork, advertising, bill paying, etc.), and reducing the number of unnecessary procedures.
3. Require health care providers to report performance data and staffing levels, and crack down on the quacks (only 5% of doctors are responsible for more than 50% of malpractice suit payouts), to lower insurance costs.
My source is James Carville’s book, “Had Enough?” and the plan has been proposed and refined by Democrats for many years now.
