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Medicare: "Biggest Deficit Driver" or "Solution" to Economic Recovery?

Sunday, 29 May 2011 04:39 By Michele Swenson, Daily Kos | Op-Ed
Medicare Biggest Deficit Driver or Solution to Economic Recovery

Rep. Paul Ryan (R-Wisc.), the ranking Republican on the House Budget Committee, speaks to reporters in Washington on Wednesday, April 1, 2009. (Photo: Stephen Crowley / The New York Times)

Political actors in Washington and corporate media often bounce off each other as though in an echo chamber. So it was no surprise to hear NPR’s national political correspondent Mara Liasson refer to Medicare as the “biggest driver” of the deficit. Never mind that health care in general, at 1/6 of the economy, is the biggest economic cost driver  - a problem that health care reformers failed to address. Controlling the rise of premium and administrative health costs would significantly bend Medicare and Medicaid costs, as would paying for quality instead of quantity care, and permitting negotiation of bulk drug rates.

Health care is one of many concessions by Democrats in the deficit debate. Perhaps their biggest concession to Republicans is that “entitlements” - Medicare, Medicaid and Social Security - have to be cut. “Entitlement” as used by the political right implies payments to the undeserving: Rep. Paul Ryan cautioned that the safety net should “not become a hammock that lulls able-bodied citizens into lives of complacency and dependency.” “Entitlement” more aptly describes the presumption of rightful due of big rewards to Wall St. crooks who are paid handsomely for the practice of bundling derivatives and speculation at the expense of mortgage holders.

Ryan’s budget proposal belies the pretense of reducing the debt, except on the backs of seniors and the poor, as he proposes reducing the top income tax rate to just 25 percent, even as corporate profits soar, wages flatline and unemployment remains intractable.

Dr. Ron Forthofer of Colorado, a retired professor of biostatistics, writes that the Deficit Commission report is narrowly focused, placing sacrifice on the backs of working people. Obviously, it is easier to go after grandma and teachers than “the entrenched financial/corporate power structure.” Among Dr. Forthofer’s alternative proposals for savings: 1) Eliminate at least $200 billion of annual corporate welfare; 2) Reduce military expenditures by 50 percent over five years; 3) Eliminate the rampant fraud and waste in military contracting; 4) Reverse the wasteful privatization of many military and other public jobs; 5) End the counterproductive occupations of Afghanistan and Iraq; 6) Place fees on all speculative trades/activities; 7) Restore Eisenhower-era tax levels; and 8) Enact Medicare for all instead of the Affordable Care Act that does nothing to control health care costs.

 

Democrats have handicapped themselves by starting with compromise in talks regarding the economy and deficit reduction, just as they did with health care reform. Negotiations over Medicare-for-deficit-reduction shake down to Republican Ryan’s plan to eliminate the program, privatizing it with vouchers on the one hand, and Democrats’ agreement to baseline Medicare cuts on the other. The 3 Democrats and 3 Republicans in the “Gang of Six” tasked with deficit reduction, have started with the baseline of Simpson-Bowles Deficit Reduction Plan, which calls for $400 billion in Medicare cuts over a decade (on top of $500 billion in cuts called for in the Affordable Care Act, achieved mostly by ending Medicare Advantage overpayments).

Sen. Tom Coburn (R-Ok)dropped out of the “Gang of Six” after demanding and failing to get “immediate and deep cuts” to current Medicare beneficiaries - an additional $130 billion (totaling $530 billion).

What Simpson and Bowles term “increased cost-sharing...to promote informed consumer health choices and spending” amounts to a greater shift of Medicare costs to seniors. The Commission’s proposed cuts include elimination of “first-dollar coverage in Medigap plans,” establishment of “a universal deductible, a single coinsurance rate, and a catastrophic coverage cap in Medicare.” In short, seniors will pay a lot more out-of-pocket, as Medicare is turned into Republicans’ pretense of “free market” access, their idealized vision of elimination of social insurance: Health care will be available only to those who can afford to pay outright.

By failing to make the best case for health care reform as essential to economic recovery, Democrats have relinquished to Republicans the narrative surrounding the economy and health care.

Much of Democratic self-talk is self-defeating. On a telephone town hall meeting with Rep. Diana DeGette (D-CO) last week, the first question was asked by a nurse who had lived in Great Britain for a period of time. Health care is easily accessible and cost-effective in Great Britain, so why don’t we have something similar here? Rep. DeGette’s quick reply was “There are not the votes in Congress for single payer” - another case of Democrats’s folding to self-fulfilling prophesy before the case is made. Republicans relentlessly hammer a position until they achieve their goal. Democrats concede the debate before it begins. The case for Medicare-for-All was never made, in fact was avoided, preceding passage of the Affordable Care Act. The insurance and Big Pharma had the president’s ear, not the majority of people who favored at the very least a “public option.”

Whatever his leadership style, President Obama has failed to use the bully pulpit where it counts most - on economic and health care reform. He caved on extending Bush tax cuts at a time when a large majority opposed them. At the same time, he jeopardized the future of Social Security by agreeing to Social Security payroll tax cuts. Subsequently, the president was portrayed on Saturday Night Live totally submissive to his Republican hostage takers, suffering from Stockholm Syndrome. Cartoonist Mike Lukovich illustrated “Obama Poker Tips” - showing his cards and cheerfully giving the shirt off his back.

Meanwhile, Republican efforts to eliminate/gut health care in general, and Medicare specifically, exacerbates the deficit about which all profess concern. Republican-designed Medicare Part D is highly inflationary and contributes greatly to the deficit. It denies negotiation of bulk drug rates, while granting billions in taxpayer-funded insurance subsidies for programs like private Medicare Advantage that cost 11% more than traditional Medicare, with no added services. Negotiation of bulk drug rates could have been, but was not added as a feature of the Affordable Care Act.

Done right, Medicare-for-All would significantly reverse the U.S. economic crisis. Former Labor Secretary Robert Reich writes, "Medicare Isn’t the Problem, It’s the Solution" to economic recovery.
     ?    By expanding the risk pool to include both the healthy young and the sick elderly, Medicare-for-All would save $58-400 billion annually, much of the savings from streamlined administrative costs.
     ?    More Americans would get quality health care, and Medicare-for-All would significantly ease our economic crisis and sharply reduce the long-term budget crisis.
     ?    Medicare & Medicaid should be permitted to use their bargaining power to negotiate lower rates with hospitals, doctors and pharmaceutical companies.
     ?    Reforming payment to reward quality care, not quantity, will also save.

If Democrats are to reclaim the role of leadership, they must define issues in terms of a moral imperative to create true economic justice and recovery for the benefit of working people, instead of capitulating to corporate power and serving the economic bottom line of the wealthy elite.


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Medicare: "Biggest Deficit Driver" or "Solution" to Economic Recovery?

Sunday, 29 May 2011 04:39 By Michele Swenson, Daily Kos | Op-Ed
Medicare Biggest Deficit Driver or Solution to Economic Recovery

Rep. Paul Ryan (R-Wisc.), the ranking Republican on the House Budget Committee, speaks to reporters in Washington on Wednesday, April 1, 2009. (Photo: Stephen Crowley / The New York Times)

Political actors in Washington and corporate media often bounce off each other as though in an echo chamber. So it was no surprise to hear NPR’s national political correspondent Mara Liasson refer to Medicare as the “biggest driver” of the deficit. Never mind that health care in general, at 1/6 of the economy, is the biggest economic cost driver  - a problem that health care reformers failed to address. Controlling the rise of premium and administrative health costs would significantly bend Medicare and Medicaid costs, as would paying for quality instead of quantity care, and permitting negotiation of bulk drug rates.

Health care is one of many concessions by Democrats in the deficit debate. Perhaps their biggest concession to Republicans is that “entitlements” - Medicare, Medicaid and Social Security - have to be cut. “Entitlement” as used by the political right implies payments to the undeserving: Rep. Paul Ryan cautioned that the safety net should “not become a hammock that lulls able-bodied citizens into lives of complacency and dependency.” “Entitlement” more aptly describes the presumption of rightful due of big rewards to Wall St. crooks who are paid handsomely for the practice of bundling derivatives and speculation at the expense of mortgage holders.

Ryan’s budget proposal belies the pretense of reducing the debt, except on the backs of seniors and the poor, as he proposes reducing the top income tax rate to just 25 percent, even as corporate profits soar, wages flatline and unemployment remains intractable.

Dr. Ron Forthofer of Colorado, a retired professor of biostatistics, writes that the Deficit Commission report is narrowly focused, placing sacrifice on the backs of working people. Obviously, it is easier to go after grandma and teachers than “the entrenched financial/corporate power structure.” Among Dr. Forthofer’s alternative proposals for savings: 1) Eliminate at least $200 billion of annual corporate welfare; 2) Reduce military expenditures by 50 percent over five years; 3) Eliminate the rampant fraud and waste in military contracting; 4) Reverse the wasteful privatization of many military and other public jobs; 5) End the counterproductive occupations of Afghanistan and Iraq; 6) Place fees on all speculative trades/activities; 7) Restore Eisenhower-era tax levels; and 8) Enact Medicare for all instead of the Affordable Care Act that does nothing to control health care costs.

 

Democrats have handicapped themselves by starting with compromise in talks regarding the economy and deficit reduction, just as they did with health care reform. Negotiations over Medicare-for-deficit-reduction shake down to Republican Ryan’s plan to eliminate the program, privatizing it with vouchers on the one hand, and Democrats’ agreement to baseline Medicare cuts on the other. The 3 Democrats and 3 Republicans in the “Gang of Six” tasked with deficit reduction, have started with the baseline of Simpson-Bowles Deficit Reduction Plan, which calls for $400 billion in Medicare cuts over a decade (on top of $500 billion in cuts called for in the Affordable Care Act, achieved mostly by ending Medicare Advantage overpayments).

Sen. Tom Coburn (R-Ok)dropped out of the “Gang of Six” after demanding and failing to get “immediate and deep cuts” to current Medicare beneficiaries - an additional $130 billion (totaling $530 billion).

What Simpson and Bowles term “increased cost-sharing...to promote informed consumer health choices and spending” amounts to a greater shift of Medicare costs to seniors. The Commission’s proposed cuts include elimination of “first-dollar coverage in Medigap plans,” establishment of “a universal deductible, a single coinsurance rate, and a catastrophic coverage cap in Medicare.” In short, seniors will pay a lot more out-of-pocket, as Medicare is turned into Republicans’ pretense of “free market” access, their idealized vision of elimination of social insurance: Health care will be available only to those who can afford to pay outright.

By failing to make the best case for health care reform as essential to economic recovery, Democrats have relinquished to Republicans the narrative surrounding the economy and health care.

Much of Democratic self-talk is self-defeating. On a telephone town hall meeting with Rep. Diana DeGette (D-CO) last week, the first question was asked by a nurse who had lived in Great Britain for a period of time. Health care is easily accessible and cost-effective in Great Britain, so why don’t we have something similar here? Rep. DeGette’s quick reply was “There are not the votes in Congress for single payer” - another case of Democrats’s folding to self-fulfilling prophesy before the case is made. Republicans relentlessly hammer a position until they achieve their goal. Democrats concede the debate before it begins. The case for Medicare-for-All was never made, in fact was avoided, preceding passage of the Affordable Care Act. The insurance and Big Pharma had the president’s ear, not the majority of people who favored at the very least a “public option.”

Whatever his leadership style, President Obama has failed to use the bully pulpit where it counts most - on economic and health care reform. He caved on extending Bush tax cuts at a time when a large majority opposed them. At the same time, he jeopardized the future of Social Security by agreeing to Social Security payroll tax cuts. Subsequently, the president was portrayed on Saturday Night Live totally submissive to his Republican hostage takers, suffering from Stockholm Syndrome. Cartoonist Mike Lukovich illustrated “Obama Poker Tips” - showing his cards and cheerfully giving the shirt off his back.

Meanwhile, Republican efforts to eliminate/gut health care in general, and Medicare specifically, exacerbates the deficit about which all profess concern. Republican-designed Medicare Part D is highly inflationary and contributes greatly to the deficit. It denies negotiation of bulk drug rates, while granting billions in taxpayer-funded insurance subsidies for programs like private Medicare Advantage that cost 11% more than traditional Medicare, with no added services. Negotiation of bulk drug rates could have been, but was not added as a feature of the Affordable Care Act.

Done right, Medicare-for-All would significantly reverse the U.S. economic crisis. Former Labor Secretary Robert Reich writes, "Medicare Isn’t the Problem, It’s the Solution" to economic recovery.
     ?    By expanding the risk pool to include both the healthy young and the sick elderly, Medicare-for-All would save $58-400 billion annually, much of the savings from streamlined administrative costs.
     ?    More Americans would get quality health care, and Medicare-for-All would significantly ease our economic crisis and sharply reduce the long-term budget crisis.
     ?    Medicare & Medicaid should be permitted to use their bargaining power to negotiate lower rates with hospitals, doctors and pharmaceutical companies.
     ?    Reforming payment to reward quality care, not quantity, will also save.

If Democrats are to reclaim the role of leadership, they must define issues in terms of a moral imperative to create true economic justice and recovery for the benefit of working people, instead of capitulating to corporate power and serving the economic bottom line of the wealthy elite.


Hide Comments

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