Guest Post: Latest from Cato…
Guest post by Michael Halasy
Latest from Cato…
Kaiser Health News carries an article from Michael Cannon from Cato Institute on the benefits of Ryan’s proposal on Medicare.
Cannon is wrong.
First, he begins by advocating for repeal by comparing the roughly 500 billion in cost of the program to the overall debt and deficit, never mentioning that the 500 billion is actually over 10 years. Next he proceeds to Medicare savings, and concludes that there were no mechanisms to constrain Medicare savings…and he’s right here.
However, then he states: “Even if they were, ObamaCare just spends the presumed savings elsewhere”. Which comes across snippy, and a little arrogant. Then he talks about vouchers, and the proposal by Congressman Paul Ryan.
Here’s what he says:
Second, the budget should restrain Medicare spending by giving enrollees fixed vouchers they can use to purchase any private health plan of their choice. Poor and sick enrollees should get larger vouchers, but the average voucher amount should grow only at the overall rate of inflation. Because vouchers enable seniors to keep the savings, they will do what ObamaCare won’t: reduce the wasteful spending that permeates Medicare. Seniors will choose more economical health plans and put downward pressure on prices across the board. Indeed, vouchers are the only way to contain Medicare spending while protecting seniors from government rationing. Skeptics worry that seniors will make bad decisions with their vouchers. They should keep in mind that, according to Obama’s Council of Economic Advisers, “nearly 30 percent of Medicare’s costs could be saved without adverse health consequences.” In other words, vouchers come with a huge built-in margin of safety: seniors could consume one-third less care without harming their health.
There are some big problems with this, which Mr. Cannon never addresses, or even acknowledges.
To start with, many seniors are living on constricted, fixed incomes. Even with “larger” vouchers, as he suggests, keeping them tied to inflation without addressing the reason for healthcare cost escalation is the same as cutting them out of healthcare altogether…at least the effect will be the same over time. Healthcare has grown at a rate far above inflation for years (6.2% average over the past 10 years). What this will do is to force low income seniors to skip medications, avoid physician visits, and avoid preventative care. This will end up being more costly down the road.
The second problem, is that Mr. Cannon is misrepresenting what the Council of Economic Advisors said about Medicare spending. That 30% represents waste within the system, not necessarily (although likely a small percentage is) over treatment of Medicare patients. It’s a dangerous statement to make.
Finally, the block grant idea has some merit, but let’s be honest. That’s not cost savings…..that’s cost shifting. By removing a percentage of federal funding for this patient population, you are forcing the state to pay for it, which is a problem for many cash strapped states already. Mr. Cannon knows all of this, however, he is trying to put a rosy face on an ugly dog.
The last sentence above tells the tail, so to speak. In todays world, where a great many seniors live, having their nest eggs destroyed, at least those that had them, now having to rely on SS as their main source of income, these idiots, my view, are trying to justify their position. They are not seniors, haven’t the foggiest idea what takes place in the mindset of a senior, have their own costs either given to them or get them through employment. Face it, all these people have taken advantage of the system today that was built on the backs of those that came before. P.R., B.S., lies if you may, are what the plutocracy in this country are trying to enact. Pick on the those that don’t have the means to fight back. This is worse than any so called foreign terrorists could dream of inflicting on the U.S.
“First, he begins by advocating for repeal by comparing the roughly 500 billion in cost of the program to the overall debt and deficit, never mentioning that the 500 billion is actually over 10 years.”
Yes, I noticed a couple of years ago that gov’t expenses are inconsistently reported, some with regard to one year, some with regard to ten years. I think that the media should be consistent. Reference things to a single year, even if that means taking an average, so that people can make meaningful comparisons.
“However, then he states: “Even if they were, ObamaCare just spends the presumed savings elsewhere”. Which comes across snippy, and a little arrogant.”
It is not just that. Everyone, and I mean everyone, agrees that health care costs are what threatens future Federal budgets. To assume that health care savings, if they actually materialize, will be spent elsewhere is to say that Congress is not serious about reining in the growth of future budgets. (Presidents have term limits, Congress does not.)
Historically, the evidence indicates that Congress is not serious about reining in the growth of future budgets. But if we admit that, then we can save a lot of trouble by not squabbling about future budgets now. 🙂
Min, I think this is an overstatement: “Everyone, and I mean everyone, agrees that health care costs are what threatens future Federal budgets.” Medicare and Medicaid, a subset of healthcare costs, threaten the federal budget.
I suggest tossing all of the elderly and the poor, and, best of all, the poor elderly out into the street. Screw them if they didn’t take the time to stay healthy or earn a million bucks and welch on the tax man. Screw them all. Tides up, man over board, all systems go and full speed ahead. Those who can’t do don’t deserve what they have. Those that have don’t owe the suckers a thing. Damn bleeding heart conservatives and communists need to get with the program. Shoot first and take prisoners later. Tippecanoe and Tyler too, 54.40 or Fight, FfityFour Forty or Fight and Remember the Maine.
Once we force all the leeches to use the ERs all aroound the country we’ll finally gain control over the health care costs in this country. That way state and local governments will have to bear the costs of their own poor and over the hill crowd. All the rest of us have to do is to set up one state with no poor and no elderly.
Or they could be ground up and turned into tasty snack crackers ala this week’s This Modern World. http://www.dailykos.com/story/2011/04/11/965457/-Language-is-a-Virus
That does not contradict what I said. 🙂
Come on. He’s from Cato for Christ’s sake. Why are we talking about this like it was real work?
Just trying to add some precision. After the SS thread and the semantic arguments, it seems appropriate
Unless this reduces the cost of individual treatments, I don’t see how it can work. If seniors select more economic health plans but the cost of individual treatments is unchanged, then the lower cost must be due to getting less treatment. This is contrary to what has been emphasized repeatedly for the past few decades: that people need more and better treatment early in the progression of their illness to help reduce the need for large expenditures later.
Min,
All the CBO projections I see and MG points to show that the plan is to keep spending over $600B in constant 2005 dollars for war, which compared to Clinton’s DoD is about twice.
Yes, the “savings” from privatizing Medicare by using “for profit” commercial medicare providers is going to pay for the “for profit” arsenals’ good returns to their shareholders.
Check the cost overruns of late systems which fail to shoot down easy test targets, and imagine how well privatized “for profit” medicare is going to take care of the mission of caring for senior citizens.
Wait, like the MIC the issue is profits not results
No worries, brush the dust off a DVD of Soylent Green and enjoy. Roth was an old guy…………………..
Climate disaster may be not be such a bad thing.
RT,
BINGO…this is exactly the issue.
“If seniors select more economic health plans but the cost of individual treatments is unchanged, then the lower cost must be due to getting less treatment.”
So? What’s the problem with less health care for old sick people? More health care starting at an early point in an illness will only increase the need for yet additional health care if the treatment proves to be successful. More old sick people living a longer time is a serious strain on the budget. Can’t they simply die and save us all a heck of a lot of money? If we can save enough now by reducing accesss to quality treatment maybe we’ll be able to improve health care services enough so that when I’m old and sick and maybe too poor to pay for my health care we can restore Medicare and Medicaid to its old expensive levels.