The Washington Post is correct on Medicare reform
January 11, 2013 at 12:52 pm in News by Dustin Siggins 3 Comments
Over the last few months, The Washington Post has pushed hard for Medicare reform in several in-house editorials. First, it was an editorial claiming President Obama sounded like a man who was ready to step up to the plate and reform the program. A few weeks later, the Post slammed the President for not leading on Medicare reform. Now, the editorial page is offering its own solutions.
It is not the intent of this post to necessarily analyze the editorial’s policy specifics, per se. Instead, let’s focus on three other important things the Post wrote.
First, the editorial simultaneously points out the obvious truth about Medicare, and calls out the President for his dishonest campaign rhetoric regarding Medicare reform:
ON NEW YEAR’S DAY, President Obama looked ahead to the post-“fiscal cliff” deficit-reduction battles and declared: “I agree with Democrats and Republicans that the aging population and the rising cost of health care . . . [make] Medicare the biggest contributor to our deficit. I believe we’ve got to find ways to reform that program without hurting seniors who count on it to survive.” The question — a tricky one for a president who won reelection in part by defending “Medicare as we know it” — is how to accomplish this feat. Medicare as we know it is not sustainable.
Second, the editorial made it clear that the costs are rising far more quickly than many will admit:
Medicare cost $555 billion in 2012, according to the Congressional Budget Office. The CBO has projected that this number, already 15 percent of non-interest federal spending, will nearly double by 2022.
Most importantly, the editorial states the unfortunate truth about Washington – neither party is going to push real, lasting Medicare reform:
We’re loath to let Washington off the hook for a more permanent, fundamental Medicare fix. But given the uncertainties, political and economic, of that endeavor, pursuing specific incremental reforms is a plausible second-best solution. It won’t be painless, but neither is inaction.
In the long run, Medicare is projected to be the major problem with the federal budget, along with interest payments. While the Post’s solutions won’t prevent this, they will give Washington more time to come up with a real, substantive solution. Is this a distant second-best to real reform? Absolutely. But at least the Post is coming up with something. Congress should take note.
The idea behind Medicare was to let the trust fund investments grow over time so it could cover future expenses of beneficiaries, just like Social Security. Not a bad idea. However, when the funds are spent, and demographics shift, Medicare becomes insolvent. Consider this: If an individual had a tax-exempt personal health account of $50,000 by age 18, earned just 5% in real terms on this investment, and didn’t touch the fund until age 65, he would have no need for Medicare, EVER. For just a few years of typical Medicare spending per beneficiary (e.g., $12,000 per year), such an investment would eliminate the need for Medicare altogether. Privatize health care investment accounts. Allow unspent assets in these accounts to pass tax free into similar accounts owned by heirs.
Medicare was created in 1965 because only half the population over the age of 65 possessed health insurance. The other half could not afford it or were deemed non-insurable by the insurance companies. In a free market, the insurance companies cannot or should not insure the oldest and sickest people because it is bad business and lowers profits.
So when we finally get rid of Medicare, Medi-Cal and ObamaCare, the gov’t must pass a law stating hospitals and doctors can refuse medical treatment for people who cannot pay for it. I know we live in a civilized society, but we cannot bankrupt the country. Get in a bad accident with no health insurance, and you are on your own! People need to take responsibility for themselves.
There are several ways a market is controlled.
One is through competition, this is of limited use in medicine as there is only one person talking to one doctor at a time, considering one illness.
The other is through cost, if it requires a certain amount to perform a surgery, and I can’t afford it, Either said surgery is postponed until I can, or the physician, realizing that the 1%ers are mighty nice to bill, there really aren’t that many and he may try to figure out how to sell his services at a price the wee folk can afford
. A rather delayed form of competition.
Insurance was a great idea, until the likes of John Edwards figured out that looting insurances was a very profitable business and our judges failed to adjudicate.