Posts tagged with: medicare

Blog author: ehilton
posted by on Friday, March 14, 2014
Todd Wilemon

Todd Wilemon

Admittedly, “stop being poor” sounds a bit like “let them eat cake.” The remark was made by Todd Wilemon, a managing director at NYSE Euronext, when he was asked what people should do if they could not afford health insurance. “Stop being poor,” was his answer.

Callous? Crude? Mean? Not really. Kevin D. Williamson explains how the ineptly-named Affordable Care Act isn’t providing insurance for all who can’t afford it.

Appropriating a certain amount of money and labeling it “health care for the poor” is not the same thing as providing poor people with access to doctors, hospitals, and medicine. It is easy to move money from one pocket to another, which is how we manage to spend a figure approaching a half-trillion dollars per annum on Medicaid with very little to show for it in terms of better health outcomes for poor people. In Tennessee, Medicaid alone spends about $10,000 annually for every poor person in the state, and poor Tennesseans of retirement age or older already have access to Medicare.

We spend the money, but we do not get the health care.

Why not? Because there aren’t enough doctors, there are too many doctors who won’t accept Medicare, and all the subsidies and mandates in the world aren’t going to fix that. The solution? Stop being poor.

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In a recent interview in the Wall Street Journal, billionaire Stan Druckenmiller discusses his recent university tour sounding the alarm on intergenerational theft. The article paraphrases his case:

[W]hile today’s 65-year-olds will receive on average net lifetime benefits of $327,400, children born now will suffer net lifetime losses of $420,600 as they struggle to pay the bills of aging Americans.

It goes on:

When the former money manager visited Stanford University, the audience included older folks as well as students. Some of the oldsters questioned why many of his dire forecasts assume that federal tax collections will stay at their traditional 18.5% of GDP. They asked why taxes should not rise to fulfill the promises already made.

Mr. Druckenmiller’s response: “Oh, so you’ve paid 18.5% for your 40 years and now you want the next generation of workers to pay 30% to finance your largess?” He added that if 18.5% was “so immoral, why don’t you give back some of your ill-gotten gains of the last 40 years?”

He has a similar argument for those on the left who say entitlements can be fixed with an eventual increase in payroll taxes. “Oh, I see,” he says. “So I get to pay a 12% payroll tax now until I’m 65 and then I don’t pay. But the next generation—instead of me paying 15% or having my benefits slightly reduced—they’re going to pay 17% in 2033. That’s why we’re waiting—so we can shift even more to the future than to now?”

In my recent commentary, I examined the recent projections of the Congressional Budget Office: (more…)

If the National Bureau of Economic Research is to be believed, Obamacare stands to cause more than 1 million Americans to shift from work to welfare. Why? America will lose an abundance of low-paying full-time jobs to relieve employers ofoperation-game health-care cost burdens. The Wall Street Journal recently reported:

[A] number of restaurants and other low-wage employers say they are increasing their staffs by hiring more part-time workers to reduce reliance on full-timers before the health-care law takes effect.

“I’d be surprised if the Affordable Care Act didn’t have something to do with” the pickup in part-time hiring, said Paul Dales, senior U.S. economist at Capital Economics. “Companies don’t want to pay for health care unnecessarily if they can avoid it, so they’ll try to avoid it.” However, he said “the effects will be harder to discern in the data.”

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A video surreptitiously filmed during one of Mitt Romney’s private fundraisers was leaked and captured the Republican presidential nominee talking to donors last April in a Florida home (watch below) during a very candid moment.

While Romney states the facts and opinions as he sees them regarding the prevalent public welfare culture in America, he quotes figures that will surely stir animosity from within the Obama administration and his loyal Democratic voters.

Here’s a summary of what Mitt Romney told his campaign donors:

There are 47 percent of the people who will vote for the president no matter what…There are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it. ..They will vote for this president no matter what… And so my job is not to worry about those people. I will never convince them [that] they should take personal responsibility and care for their own lives. What I have to do is convince the five to ten percent in the center, that are independents, that are thoughtful, the look at voting one way or the other…

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Some proponents of limited government understandably yearn to see Mitt Romney’s recently announced running mate, Paul Ryan, as something like the pure intellectual descendent of Friedrich Hayek and Milton Friedman. Some on the left, meanwhile, will be tempted to portray him as a heartless monster who only wants to enrich the 1 percent. Paul Ryan the politician is more complex than either portrait. Far from throwing granny under the bus, his efforts at budget reform are an essential step in saving Social Security and Medicare, along with improving the long-term fiscal health of the nation. On the other hand, and although his American Conservative Union score is a solid 91.69, he did vote for TARP, the bank bailout, and the auto bailout–government intrusions he has said he now partially regrets.

The personal side of Paul Ryan also doesn’t fit neatly into many preconceived categories. His extended family is financially successful, but he lost his father when he was 16, attended a public university, and worked a variety of summer and side jobs during and after college to make ends meet. As a teenager he helped take care of his grandmother who had Alzheimer’s.

He’s a socially conservative Catholic, and a fan of grunge rock, Beethoven, Led Zeppelin, and Hank Williams, Jr. He’s an outdoorsman who bow hunts, does his own skinning and butchering, and kills catfish with his bare hands. And he’s married with three children, with a wife, Janna, who is a stay-at-home mom with degrees from Wellesley and George Washington University.

For more, here is a piece in which Ryan discusses his votes for TARP and the bailouts; here is a breakout of the American Conservative Union’s 91.69 conservative score for Ryan; and here is a short biography.

UPDATE: The Janesville Gazette has just published an Extra that pulls together their local pieces on Ryan and Janesville along with some national stories and policy resources–a nice one stop resource.

Over at National Review Online, Acton Research Director Samuel Gregg looks at a new study which shows a growing wealth gap between the senior set and those under the age of 35. The boomer generation also has the political clout to protect that security:

… another factor that makes older Americans’ economic position even more secure than that of younger generations is the disproportionate sway exerted by older folks on politics, much of which is directed to maintaining the entitlement status quo. From the narrow standpoint of their own economic self-interest, why should older people vote for the type of entitlement reform that is indispensible if America is to get its public-debt problem under control? Many of this quite numerous demographic will ask, why should they have to scrimp after having paid into Social Security all their working lives?

Members of the supercommittee charged with finding $1.2 trillion to cut from the deficit surely know that proposals such as raising the retirement age are bound to encounter enormous opposition from AARP-like groups — especially the ones dominated by those baby boomers who are now retiring and whose entire lives have reflected an après moi, le déluge mentality. Supercommittee members are also no doubt conscious that older people — many of whom are already very unhappy about Obamacare’s forthcoming changes to Medicare — have an alarming habit of turning out to vote in far greater numbers than their children and grandchildren.

Read Samuel Gregg’s “America’s Gerontocracy” on NRO.

Also see PowerBlog postings on “intergenerational justice” by Jordan Ballor, executive editor of the Journal of Markets & Morality.

Yesterday Senator Harry Reid finally proposed a budget plan – one week before the United States is set to default. It is about time that Senate Democrats joined President Obama and House Republicans in offering a concrete budget proposal; however, their budget plan passes the buck onto future generations.

The government cannot continue to leave budget woes to future generations, and this is exactly what Senator Reid is trying to do. In fact, after viewing a video found on his website, he seems rather proud of the fact that his budget proposal doesn’t touch the three largest entitlements—Social Security, Medicare, and Medicaid—which alone consist of 40 percent of federal spending in 2010 (entitlement spending makes up 57 percent of federal spending). Instead of making the tough call, proposing reforms and cuts to spare future generations from the large financial burden these programs bring, the Senate Democrats are deciding to continue with things as they are. Judging by the current financial state of the U.S. this is rather problematic.

The Senate Democrats’ budget proposal disregards the principles of stewardship. By not cutting or reforming entitlements they are not looking long term to ensure the creation of a strong and stable economy for our children and grandchildren.  Jordan Ballor in his commentary “Do Less with Less: What the History of Federal Debt and Tax Leverages Teaches” offers a pretty common sense solution for Senator Reid:

Raising taxes without such assurances, even for such a critical cause as the public debt crisis, is pure folly. To really address the structural deficits at the heart of the federal budget, particularly with respect to entitlement programs like Social Security, Medicare, and Medicaid (which together accounted for 40 percent of federal spending in 2010), the government simply needs to find ways to do less with less.

Entitlements have greatly contributed to our deficit problem, and a sound budget solution will recognize their contribution to the deficit and look to rectify the situation.

As Samuel Gregg articulates in “Deficit Denial, American-Style” the U.S. must pay off its debt if it hopes to economically grow and flourish:

After examining data on 44 countries over approximately 200 years, two economists recently found evidence suggesting that developed nations with gross public debt levels exceeding 90 percent of GDP (i.e., America) find that their medium-growth rates fall by one percent, while average growth declines by an even greater proportion.

The United States can begin down the path of prosperity by shrinking government and doing less with less and fostering an economic climate that is strong and vibrant for future generations.

Also see the Acton Institute’s  Principles for Budget Reform which can be viewed by clicking here.

 

 

 

Blog author: jmeszaros
posted by on Wednesday, July 20, 2011

John Boehner recently stated, in the debt-ceiling talks, that “We’re going to continue and renew our efforts for a smaller, less costly and more accountable government,” which most Americans agree with in principle.  However, citizens say that keeping benefits the same for the three big programs, Social Security, Medicare, and Medicaid, is more important than taking steps to reduce the budget deficit by a margin of 60 percent compared to 32 percent for Social Security, 61 compared to 31 percent for Medicare, and 58 compared to 37 percent for Medicaid.

So Americans purportedly want thriftier government, but still want benefits? What gives?  Part of the problem, according to James Kwak, is “the idea that there is one thing called ‘government’–and that you can measure it by looking at total spending–makes no sense.”

What Kwak means is that total expenditure is a misleading measure of the “size” of government. He presents this example:

The number of dollars collected and spent by the government doesn’t tell you how big the government is in any meaningful sense. Most government policies can be accomplished at least three different ways: spending, tax credits, and regulation. For example, let’s say we want to help low-income people afford rental housing. We can pay for housing vouchers; we can provide tax credits to developers to build affordable housing; or we can have a regulation saying that some percentage of new units must be affordably priced. The first increases the amount of cash flowing in and out of the government; the second decreases it; and the third leaves it the same. Yet all increase government’s impact on society.”

So increased spending (or decreasing it) does not necessarily mean the “size” of government has grown (or shrunk). Think how regulation is synonymous with big government, but it does not involve a tax or direct spending of any kind.

In fact, “big” government is often viewed through the lens of regulation, rather than cost. For instance, Kwak explains:

When people say government is too big, they often have in mind something like the Consumer Financial Protection Bureau–a regulatory agency that tells businesses what they can and can’t do…the CFPA’s budget is about $300 million, or less than one-hundredth of one percent of federal government spending.”

Again the divergence between cost and “bigness” is seen.  The CFPA may be viewed as “big,” intrusive, and unnecessary but it is not large in terms of cost like Social Security and Defense spending.

Kwak states, “popular antipathy toward the regulatory state has been translated into an attack on popular entitlement programs.”  Many people dislike certain government regulations and, due to the budget debate, dislike of regulation, the amount of government spending, and specific government programs may have become accidentally intertwined.

As mentioned before, Americans view Social Security, Medicare, and Medicaid as important and worth preserving.  Kwak elaborates: “Rationally speaking, your opinion about Social Security or about Medicare should be based on how much you put in and how much you get out–not on the gross size of the program, and not on how big the rest of the federal budget is. Yet instead the total size of the budget has become the driving force behind potential structural changes in Social Security and Medicare.”

Kwak suggests that “we should make decisions on a program-by-program basis, just like a business is supposed to do.”  His advice is: “If there’s a program that the American people, through our democratic system, agree will provide benefits greater than its costs, we should do it, independently of the existing spending level. And if there’s a program that isn’t covering its costs, we should kill it.”

Instead of focusing on a generality, “government size”, our elected officials should evaluate programs on a cost-benefit level.  Then government agencies that are viewed as too costly or intrusive (the CFPA) could be eliminated and government programs that are viewed as beneficial (SS, Medicare), but need reform, can be focused on in an unbiased way and not be harmed by the “too big” generality.

Jordan Ballor, in a blog post for Acton, wrote: “All government spending, including entitlements, defense, and other programs, must be subjected to rigorous and principled analysis.”  Indeed, although the American people think Social Security, Medicare, and Medicaid are beneficial, 52 percent think Social Security needs significant reform, 54 percent think Medicare needs reform, and 54 percent, likewise, for Medicaid.  However, without having a clear definition of what “too big” means, successful retooling will be difficult to achieve.

Ballor added: “This means that the fundamental role of government in the provision of various services must likewise be explored. This requires a return to basics, the first principles of good governance, that does justice to the varieties of governmental entities (local, regional, state, federal) and institutions of civil society (including families, churches, charities, and businesses).”  True reform requires not simply legal and budgetary change, but a reevaluation of what entities perform certain services, as Ballor suggested.

The Acton Institute is committed to real budget reform, and, to make sure that programs, like Social Security, are evaluated fairly and reformed properly, the United States should make sure it clearly defines the costs and benefits of individual programs before taking drastic action.

Blog author: jmeszaros
posted by on Wednesday, July 6, 2011

Many politicians have talked of repealing the Patient Protection and Affordable Care Act (“Obamacare”).  Mitt Romney has said nullifying the healthcare law would be one of his first actions if he was elected president.  However, rather than just repealing the law and going back to the status-quo, with minor changes, the American people should demand true reform.

In 2001, Milton Friedman, the famed, Nobel-prize winning economist, published an article titled “How to Cure Health Care.” (Although worthy of serious consideration, Friedman’s analysis does not contain any explicit moral message, and is simply a policy analysis on healthcare.  For a more in-depth look at the moral dimension of healthcare reform, visit Acton’s special section on healthcare)

In his essay, Friedman stated that, “The United States spends a mind-boggling percentage of its GDP on a health care system that virtually everyone agrees is a disaster,” and that was in 2001.  Spending has only increased over the past decade.  In fact, according to the Department of Health and Human Services Center for Medicare and Medicaid Services, the United States spent 17.6 percent of its GDP on healthcare in 2009, and this figure is expected to grow over time.

In addition to out of control spending, studies in the United States and Europe at the time were showing “…public dissatisfaction with the increasingly impersonal character of medical care.”  Recently, a 2010 Gallup poll showed a majority of Americans are satisfied with the quality of healthcare they receive (62 percent rated quality as excellent or good), but only 39 percent rated the availability of coverage as excellent or good.

How did this happen? How has massively increased spending led to unsatisfactory coverage?

In four words: the government got over-involved.

Friedman explained, “In other technological revolutions, the initiative, financing, production, and distribution were primarily private, though government sometimes played a supporting or regulatory role.”  However, in healthcare, the government decided to intervene and regulate extensively.

It all started at the onset of World War II when, due to wage and price controls enacted during the war, “firms competing to acquire labor at government-controlled wages started to offer medical care as a fringe benefit,” which was not recorded as part of their salary due to the wage-controls.  As a result, employees came to expect healthcare from employers as part of their compensation.

The IRS eventually wised up to this and, wanting more revenue, started to tax the contribution.  Workers raised an uproar so Congress passed a law, The Revenue Act of 1942 (Section 127 specifically), allowing, in Friedman’s words, “… medical care expenditures to be exempt from the income tax, if, and only if, medical care is provided by the employer.”  This system, according to Dr. Donald P. Condit in his Acton Institute commentary “Should Business Be Responsible for Employee Health Care?”, “effectively punishes taxpaying citizens who are paying for health care benefits with after-tax dollars.”

Thus, if an employee paid directly for healthcare, this was added to their taxable income, but, if they went through their employer, it was not, setting up a large incentive to get insurance coverage from one’s employer.  Condit states “medical spending has increased with this ‘tragedy of the commons’ scenario, wherein resources [health care dollars] are overconsumed with the perception that someone else [the company, the government] is paying.”

Friedman similarly demonstrated the result of this and other policies dealing with healthcare with a simple example: “In 1946, seven times as much was spent on food, beverages, and tobacco as on medical care; in 1996, more was spent on medical care than on food, beverages, and tobacco.”  In 50 years, healthcare went from a minor expenditure to the major expenditure of most people, and, during this period, spending by individuals and government on healthcare approximately quadrupled.

Friedman explained, “On the evidence to date, it is hard to see that we have gotten much for quadrupling the share of the nation’s income spent on medical care other than bureaucratization and widespread dissatisfaction with the economic organization of medical care.”

What can be done?

For starters, Friedman said: “If the tax exemption were removed, employees could bargain with their employers for higher take-home pay in lieu of medical care and provide for their own medical care either by dealing directly with medical care providers or by purchasing medical insurance.”  This would make families more responsible for their own healthcare and they could adjust accordingly, either spending less/more on healthcare or taking more/less in wages.  (It seems that most would probably spend less on healthcare and take more income in light of this National Journal article).

This kind of reform would help by “reprivatizing medical care by eliminating most third-party payment, and restoring the role of insurance to providing protection against major medical catastrophes,” rather than using insurance to pay “for regular medical examinations and prescriptions.”

This sounds great, in theory, but how would such a drastic change actually be accomplished?

Friedman advocated for medical savings accounts. He stated: “A medical savings account enables individuals to deposit tax-free funds in an account usable only for medical expense, provided they have a high-deductible insurance policy that limits the maximum out-of-pocket expense.”  This way, employees, not employers, would be responsible for their own healthcare spending, hopefully eliminating the third-party problem, while allowing the wages contributed to still be tax free.

Several companies, including Forbes, Quaker Oats, and the Golden Rule Insurance Company, tried out medical savings accounts instead of employer provided insurance and found that healthcare costs were lower and both management and employees were more satisfied than under the old employer provided system.

Friedman stated, “Families would once again have an incentive to monitor the providers of medical care and to establish the kind of personal relations with them that were once customary.”

This puts responsibility back on the individual to care for his or her family and brings to mind the words of 2 Thessalonians 3:10: “If a man will not work, he shall not eat.”  Modern healthcare is obviously not comparable to biblical food, but the concept of individual responsibility has largely been lost with employer provided healthcare. This reminds all that a family is better served caring for itself rather than relying on someone else to make choices, including healthcare, for them.  Condit, in his essay, says as much: “Employer, or any third party, involvement in providing health care can interfere with an employee’s ability to make his or her own decisions and distort individual responsibility.”

Also, allowing families to manage their own healthcare costs would allow for greater efficiency by means of more efficient spending.  For instance, instead of using insurance to pay for a doctor visit due to a cold or a small prescription, one could pay out of pocket.  If most people paid out-of-pocket, the cost would likely go down because what individual would pay $80 (like my insurance company does) for a 20 minute doctor visit?  By putting people in control and not insurance or government bureaucracies, one could expect people to “shop around” for quality doctors.  Then, doctors’ offices would likely offer better care to compete for patients, instead of expecting an $80 to $100 payout from the insurance company or the government.

In addition, Friedman advocated for the abolishment of Medicare and Medicaid, which sounds rather radical.  However, he said the government should “…replace them by providing every family in the United States with catastrophic insurance (i.e. a major medical policy with a high deductible).”

That way “the family would be relieved of one of its major concerns – the possibility of being impoverished by a major medical catastrophe – and most could readily finance the remaining medical costs.”

This should satisfy the concern that impoverished citizens would not get adequate coverage.  Even if a small portion of the population is chronically ill or unable to pay their medical bills, these people would be covered by a government catastrophic care policy.

It is a citizen’s duty to care for those individuals in their communities who simply cannot help themselves.  Condit states, “Christians, and others, are expected to fulfill a service obligation, with a preferential consideration for the poor and underserved.”  This corresponds to the principles of subsidiarity and sacrifice seen throughout Catholic and Christian teaching.

In Luke 3:11, John the Baptist states: “The man with two tunics should share with him who has none, and the one who has food should do the same.”  Jesus himself said, in Luke 14:13, “when you give a banquet, invite the poor, the crippled, the lame, and the blind.”  Again, in Jesus’ and John’s teaching, the focus is on “you”, the individual, caring for ones neighbor, rather than an entity such as the government (or a corporation).  The government, naturally being more impersonal and disconnected, could provide support in the severest cases, when communities and individuals could not support their own.

Rather than harming the less-fortunate and marginalized, this kind of health reform could free up time and hospital beds (many families would spend much less time and money on care) to help those chronically ill individuals who truly need the best care and doctors available. Friedman’s approach does not solve all the problems of healthcare (how do I know this doctor/hospital is reputable or provides good care since there is no rating service, what about those that refuse to or cannot pay out of pocket, etc.) and this is only a basic analysis, but it does offer a seldom discussed approach to improve care, allow for greater individual independence, and decrease costs.

 

The Detroit News published Dr. Don Condit’s Acton commentary on Accountable Care Organizations (ACOs) in today’s paper. The ACOs are designed to manage costs under the Patient Protection and Affordable Care Act, better known as Obamacare.

Medicare beneficiaries will be “assigned” to 5,000 patient-minimum organizations to coordinate their care. While HHS Secretary Kathleen Sebelius talks about improvement in care, the politically poisonous truth is that Medicare is going broke and ACOs are designed to save money.

The words “rationing” or “treatment denial” or “withholding care” are not part of her press release, but reading the regulations reveals intentions to “share savings” with those who fulfill, or “penalize” others who fall short of, the administration’s objectives. The administration’s talking points include politically palatable words that emphasize quality improvement and care enhancement when the real objective is cost control by a utilitarian calculus.

Physicians and other health care providers will find themselves in conflict with the traditional ethos of duty to patient within ACOs. Doctors will face agency conflicts between the time honored primary duty to patient. Medical care providers will receive incentives for controlling spending, and penalties if they do not. “No one can serve two masters” (Matthew 6:24); not even physicians.

Read “Obamacare rules belie compassion, care” on the Detroit News website.