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Ann O'Leary

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The Real Health Care Train Wreck

Posted: 03/30/2012 9:00 am

This week, as opponents of the Affordable Care Act argued before the Supreme Court that key parts were unconstitutional and pundits described the government's defense as a train wreck for the Obama administration, the real health care train wreck was happening across the street -- in the halls of Congress.

Today, in a party-line vote, the House passed the Republican Leadership's 2013 budget that would control health care costs by essentially ending the guarantee to cover all seniors through Medicare and the guarantee to cover qualified low-income Americans -- including low-income children -- through Medicaid. This vote came just one week after the House passed a measure that would eliminate one of the central health care cost control mechanisms in the Affordable Care Act -- the Medicare Independent Payment Advisory Board, an independent panel that would keep cost control decisions out of the hands of special interests.

These measures are blunt instruments aimed at controlling health care costs. But instead of real facts and real debate about possible solutions to the very real problem of rising costs, our politicians seem to be stuck in the usual mode of partisan bickering about who should make cost-control decisions. The debate also panders to seniors, making constructive arguments nearly impossible.

Rising health care costs are affecting all of us, and if we don't control them, health care will consume our family budgets, as well as our government budgets with little left for investing in the next generation.

Consider these facts:

Children and Families. Families are losing the ability to save for a child's college fund or for retirement. In 2010, health care costs rose to more than 21 percent of the household budget from 9 percent in 1969. In the past ten years, alone, premiums for employer-sponsored health insurance doubled. While 42 percent of low-income children and working-age adults had employer-sponsored coverage in 2001, only 24 percent had it in 2011. In some cases, the decline led to personal bankruptcy.

State and Local Governments. Medicaid has now replaced education as the largest state budget expenditure, accounting for about 22 percent of state spending. In the 1980s, elementary and secondary education was the largest share of state spending, followed by higher education. Since 2007, Medicaid has been No. 1. Of course, part of this is good news -- Medicaid has been expanded to cover many more children. But other reasons for the cost increases are more troubling, including soaring health care costs and declining employer coverage.

Federal Government. At the federal level, Medicare, Medicaid and the Children's Health Insurance Program make up 21 percent of the federal budget, with Medicare accounting for two thirds of it. This share of the federal budget is expected to continue to increase, squeezing out funding for other critical investments in the next generation. Just consider the last five years alone: spending on children's health increased by 32 percent at the federal level while spending on education increased only by 7 percent.

It is no wonder that both parties are trying to find ways to cut health care costs.

But the vital question on the table is how we can keep our commitment to providing for the well-being of our most vulnerable -- children and elders -- while making sure we have enough resources for the programs that sustain the country's next generation?

This is not an easy problem to solve, but it is a problem for which all of us should be demanding solutions, not partisan posturing. Too often, Medicare is understood by politicians and the public as a program that only affects seniors and Medicaid is seen as a program that only deals with poverty. In truth, these programs have a greater impact on our government's ability to invest in the next generation than any other.

Here are three things to keep in mind as you follow the debate about health care costs:

First, the Supreme Court's actions are only part of the story. While requiring all Americans to hold health insurance will ultimately increase access and drive down costs, it is not the only cost control mechanism in the Affordable Care Act. As long as the Court doesn't strike down the entire ACA, health care costs can still be constrained through the reforms left standing.

Second, Medicare drives a tremendous amount of federal spending, crowding out our ability to invest in other programs. That is why the Medicare Independent Payment Advisory Board is so critical and why the House vote to eliminate it is so dangerous. As proposed, the board cannot control costs through rationing care, increasing taxes, changing Medicare benefits or eligibility, or increasing premiums. Rather, it would need to be creative, expanding upon delivery system reforms that drive down costs while maintaining the commitment to covering all of America's elderly. It could save the country more than $15 billion over the next ten years.

Third, proposals, such as those offered in the Republican budget that drastically cut Medicare and Medicaid by billions of dollars will necessarily result in rationed care and fewer eligible beneficiaries. To keep our core values focused on covering nearly all of America's kids and seniors, we need to engage in real conversations about reducing the price of health care. Doing so might shrink profits for the health industry, but it will lead to greater quality of care while keeping our commitment to coverage.

No matter what -- Americans should ignore the din of partisan shouting to focus on this crucial problem.

And don't let anyone convince you that Medicare is only a senior issue. It may be the most important children's issue facing our nation.

 
 
 

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