Paul Krugman must have been reading Trollope’s The Fixed Period, at least the part about avoiding the decrepitude and expenses of old age:
RUTH MARCUS, WASHINGTON POST: Right now, 75 percent of people believe you could balance the budget without touching Medicare or Social Security; 75 percent of people believe that you can balance the budget without raising taxes. Well, you could, but it would be extraordinarily painful.
People need to get a little bit of reality therapy. There’s going to be another dose coming on Wednesday when another group is going to submit their recommendations, very concrete recommendations about how to do it. That’s the conversation we need to have before we start picking apart solutions.
PAUL KRUGMAN, NEW YORK TIMES: If they were going to do reality therapy, they should have said, OK, look, Medicare is going to have to decide what it’s going to pay for. And at least for starters, it’s going to have to decide which medical procedures are not effective at all and should not be paid for at all. In other words, it should have endorsed the panel that was part of the health care reform.
If it’s not even — if the commission isn’t even brave enough to take on the death panels people, then it’s doing no good at all. It’s not educating the public. It’s not telling people about the kinds of choices that need to be made.
A few minutes later:
CHRISTIANE AMANPOUR, HOST: But what is going to happen? I mean, are you clear on where a compromise is going to be? It’s got to be discussed before the end of the year, no?
KRUGMAN: No. Some years down the pike, we’re going to get the real solution, which is going to be a combination of death panels and sales taxes. It’s going to be that we’re actually going to take Medicare under control, and we’re going to have to get some additional revenue, probably from a VAT. But it’s not going to happen now.
Death and taxes: the progressive answer to every problem?23833
Just received from the Mercatus Center at George Mason University,
The chart illustrates long-term projections of Medicare revenues from premiums and payroll taxes combined with projected federal government transfers into Medicare and projected deficits in Medicare’s Hospital Insurance Fund.
What does it mean? It means that
As a percentage of GDP, these general revenue transfers are projected to increase from 1.3% in 2010 to 3.6% in 2050. In addition, growing deficits in the Hospital Insurance Trust Fund will need to be proactively addressed by new legislation to avoid a future interruption of service. Medicare funding must be cut; these cuts must be deliberate, not due to a legislative loophole.
In other words, it’s a Medicare time bomb.
Click on the graph for detail.
House Democrats are looking at re-branding the public health insurance option as Medicare, an established government healthcare program that is better known than the public option.
The strategy could benefit Democrats struggling to bridge the gap between liberals in their party, who want the public option, and centrists, who are worried it would drive private insurers out of business.
While much of the public is foggy on what a public option actually is, people understand Medicare. It also would place the new public option within the rubric of a familiar system rather than something new and unknown.
The plan, called the “robust” option or “Medicare Plus 5” in the jargon that has emerged on Capitol Hill, ties provider reimbursement rates to Medicare, adding 5 percent. Leaders are planning to roll the bill out next week, and are hoping to vote the first week in November.
Those of us with elderly parents who have had to deal with Medicare are not as thrilled as the Dems. Medicare is broke, and it is yet one more reason why the public option is no option at all to us. Neither is Obamacare.
And a question for you,
If the public option is such a good idea, why resort to re-branding and red herrings?
The nation’s governors, Democrats as well as Republicans, voiced deep concern Sunday about the shape of the health care plan emerging from Congress, fearing that Washington was about to hand them expensive new Medicaid obligations without money to pay for them.
That’s definitely a cause for concern. The Obama administration constantly repeats that they’ll save money on healthcare through “More savings from Medicare and Medicaid.”
Now, think on that for a moment:
The “savings” can be reached through:
1. Reducing benefits to one of the largest voter blocks in the country – the elderly. That would entail cutting down on services covered, reducing payments to providers who already don’t cover their expenses with Medicare/Medicaid’s payments. increasing Medicare/Medicaid deductibles, or raising the age one becomes eligible for Medicare.
2. Passing the buck to the states through unfunded mandates. Which, by the way, the federal government is already doing; only that now the proposed new “free healthcare” proposed will do it in a much bigger way:
Although many governors said significant change in how the nation handles health care was needed, they said their deep-seated fiscal troubles made it a terrible time to shift costs to the states. With the recession draining states of tax revenues even as their Medicaid rolls are surging, the National Governors Association projects that states will face aggregate deficits of $200 billion over the next three years.
Each of several health care bills coursing through Congress relies on a large increase in eligibility for Medicaid, the state and federal insurance program for the poor, as one means of moving toward universal coverage.
Because the states and the federal government share the cost, any increase in eligibility levels, benefits or payments to doctors would impose new burdens on the states unless Washington absorbs them. In at least one of several bills circulating in Congress, the states would eventually pick up a share of the new costs, and the governors fear they cannot count on provisions in other bills that they will not bear costs.
This would be ruinous to the states in the best of economic circumstances. Doing it during a recession is downright suicidal:
But the sentiment among those who were could not have been more consistent, regardless of political party. The governors said in interviews and public sessions that the bills being drafted in Congress would not do enough to curb the growth in health spending. And they said they were convinced that a major expansion of Medicaid would leave them with heavy costs.
They are already anticipating large gaps in Medicaid financing after 2010, when stimulus money dries up. And they pointed out that Medicaid already suffered from low payment rates to health care providers, discouraging some doctors and hospitals from accepting beneficiaries. If Medicaid is expanded, states will almost surely have to increase payments to doctors to encourage more of them to participate.
Gov. Phil Bredesen of Tennessee, a Democrat, said he feared Congress was about to bestow “the mother of all unfunded mandates.”
“Medicaid is a poor vehicle for expanding coverage,” added Mr. Bredesen, a former health care executive. “It’s a 45-year-old system originally designed for poor women and their children. It’s not health care reform to dump more money into Medicaid.”
The states would have to get deeper into debt:
One of the proposals being considered by the Finance Committee would encourage states to issue bonds to cover the costs of expanding Medicaid. Governors in both parties revolted, trumpeting their opposition in a conference call last week with Senator Max Baucus, the Montana Democrat who leads the committee.
“There is strong bipartisan opposition to the idea of the states’ issuing bonds to pay for operational expenses,” said Gov. Haley Barbour of Mississippi, chairman of the Republican Governors Association. “One governor said it would be like taking out a mortgage to pay the grocery bill.”
This means the states would be forced to raise taxes, which Obama promised not to raise.
Some of us have been saying that federal programs — not the uninsured — are driving up the price of health care. Uninsured people do not drive up demand. Insured people do. And those insured by Medicaid and Medicare have the smallest premiums (if any), the smallest co-payments (if any) and the smallest deductibles (if any).
On top of that, the government cheats.
It does not pay the cost of services rendered. Those costs are then passed on to the other consumers.
This is done because 45 years ago, when Medicaid and Medicare were being shaped up, a Democratic president and a Democratic Congress low-balled the prices.
One reason states are in dire straits is that they pay 27% to 50% of the cost of Medicaid (the program for the poor) which the states administer. The states are no angels, having milked and artificially expanded Medicaid over the years.
But now about 20% of a state’s budget is tied up in this entitlement.
It’s going to get worse.