When it comes to the "Grand Bargain" they're pushing in Washington, the movie posters for The Fly said it best: Be afraid. Be very afraid.
Othe people are using our lives as bargaining chips. Whether it's the so-called Congressional "Super Committee" or the President's push for that grandé-sized deal, they want to look "grand" while we get stuck with the "bargain."
The Capital's misplaced focus on austerity has led to plenty of bad ideas, but one of the worst is raising the Medicare retirement age to 67. It may be the most destructive deal to come out of Washington since the Kansas-Nebraska Act of 1854. It's unfair, short-sighted, and will actually cost the economy more money than we're spending today.
No Democratic President would accept an idea like that, right? Right?
Be afraid. Be very afraid.
Say it ain't so ...
Before negotiations on a debt-ceiling deal broke down, Politico reported that the President and John Boehner had agreed on "gradually increasing the eligibility age from 65 to 67 over about two decades, according to administration and Republican congressional sources."
But that's just one story, and it only cites two sources. Maybe those sources were wrong. Did anybody double-check? As as matter of fact, yes.
"According to five separate sources (emphasis ours) with knowledge of negotiations -- including both Republicans and Democrats -- the president offered an increase in the eligibility age for Medicare, from 65 to 67."
Note the language: "The President offered ..." The Republicans didn't demand it. Reports say that the President offered it.
The Single Worst Idea
When Yale Professor Jacob Hacker called this proposal "the single worst idea for Medicare reform" he was being far too kind. For one thing, it's not reform - it's reduction. It's not Prof. Hacker's fault that this has become the accepted terminology, but we should stop conflating reform with reduction in our public debate.
Secondly, Prof. Hacker's certainly right that it's a terrible idea for Medicare. But he's selling it short. It's also a terrible idea for health care costs, job creation ... in fact, for the entire economy. You could say it's hit the trifecta of bad policy notions. We admire Jacob Hacker, but we'll have to amend his comments: It qualifies as the "single worst idea" in lots of policy areas.
Again, from Politico:
Neera Tanden, chief operating officer at the Center for American Progress and a former Obama administration health reform adviser, said it's "troubling that a progressive president would put forward that proposal."Readers may interpret that comment any number of ways, none of which augur well for future policy decisions or the 2012 election. And now Washington's buzzing with well-sourced backchannel talk that the President will include this change in his big post-Labor Day "jobs" announcement.
Let us count the ways
How bad is this idea? We only have a few hundred words to make our case and about 24 hours to do it, so we'd have to warp the space/time continuum to include all the reasons why it's so misguided. Since we don't have the budget for that, we'll just hit eight of the high points for now:
1. It would save money at the Federal level -- but it would cost more everywhere else.
A Kaiser Foundation study concluded that "raising Medicare's eligibility to 67 in 2014 would generate an estimated $5.7 billion in net savings to the federal government, but also result in an estimated net increase of $3.7 billion in out-of-pocket costs for 65- and 66-year-olds, and $4.5 billion in employer retiree health-care costs."
So it would save $5.7 billion from the Federal budget in the first year, but it would cost everyone else $8.2 billion. That means it would increase health care costs by $2.5 billion. (We do the math so you don't have to.) Who would benefit from a lower Federal deficit? High earners who want to cut spending so they're not pressured to pay more taxes. Who would get hurt? Older Americans, employers, and anybody on an employee benefit plan. That's government of the rich, for the rich, and by the rich.
2. It's brutal on seniors. In fact, it's like a 20% cut in Social Security benefits.
The Kaiser Foundation says that "Among the estimated 5 million affected 65- and 66-year-olds, about two in three would pay an average of $2,200 more for their health care in 2014 than they would have paid if covered under Medicare."
The average Social Security retireee receives about $11,000 per year in benefits. Making this change is like reducing Social Security benefits 20% for 3.3 million people.
The Kaiser study adds: "Nearly one in three, however, are expected to have lower out-of-pocket spending, mainly due to the health reform law's coverage expansions through Medicaid and the premium tax credits available to low- and moderate-income Americans."
Unfortunately, that assumes that Medicaid will survive the deep cuts being planned for that program, and that devastated state budgets will be able to assume the extra costs. It also assumes that last year's health bill will survive the attempts to gut it - attempts which now unfortunately include this proposal.
3. It would lead to benefit cuts and create more job discrimination against older workers.
The Kaiser study cites the problems that employee retirement health benefits are having with costs. As a result, these programs are being slashed already and this change would make the situation much worse. It would also increase costs on health plans for active workers, which would lead to even more benefit cuts for working Americans.
And it makes it almost inevitable that job discrimination against older workers will get worse. Employers try to weed them out of the workforce just to keep their health care costs down.
4. Its impace is made even worse by the President's demand that a "health excise tax" on higher-cost plans be included in last year's health bill.
The President reneged on a campaign pledge to oppose taxes on higher-cost health plans, a McCain idea he mocked at the time. He had it right back then. "Luxury health benefits" (which are very rare for non-executives in real life) have very little effect on health plan costs. The age, sex, and location of employees are the real cost drivers. Then, in one of his few direct interventions in the legislative process for the health bill, he demanded that this tax be included in the final product.
Raising the retirement age would make this tax even costlier, multiplying the unfairness of the original health excise tax.
5. The number of uninsured Americans will go up.
This change undercuts one of the stated goals of last year's health bill: reducing the number of uninsured Americans. Private health insurers are allowed to charge much higher premiums to older Americans, but the tax penalty for going without insurance is the same.
That means many older Americans are likely to pay the penalty, since they won't be able to afford the massive premiums they'll face - even after they receive any government subsidies.
6. Health system costs will increase, too.
We already pay far more than any other industrialized nation for health care. Why? Because too much of our health system is run by private insurers who take a profit for themselves and have no real incentive to control costs or improve quality.
Most of our best cost and quality initiatives come from Medicare and Medicaid. The less medical care they manage, the more overall costs are likely to rise.
7. It doesn't address the real cost problem - chronic health conditions.
Data analysis shows that our real cost problem comes from people with intensive and frequently chronic health conditions. Five percent of the population accounts for nearly half of all health care costs, while the lowest-cost 50% only make up 3% of the cost. As you'd expect, older people are much more likely to be in the high-cost group.
Five health conditions account for a great deal of this cost: heart problems, diabetes, cancer, mental disorders, and pulmonary conditions. The best way for Medicare to reduce these costs is by identifying these conditions as quickly as possible and managing them aggressively.
Raising the retirement age will make it more difficult to do that, not less. Even worse, it's another example of our leaders shifting cost onto financially-strapped private citizens rather than addressing the real problem.
8. It's a step in the wrong direction.
We should be expanding Medicare, not downsizing it. Last year the Senate gave some consideration to making Medicare available to anyone over the age of 55, which is an excellent idea. This bill moves us in the other direction, placing the higher-cost needs of 66 and 67-year-old Americans in the hands of underskilled and overly profit-driven private insurers.
Disaster Scenario
Some of us warned that it would be politically disastrous if the government required people to purchase health insurance without offering a low-cost public option. The wise political heads inside and close to the Administration told us that, on the contrary, this bill would be a political winner in 2010. No doubt Sen. Scott Brown chuckles over that from time to time.
This bill doubles down on the political madness that began when the widely-embraced public option was dropped, despite the fact that 70% of all Americans (and 51% of all Republicans) wanted it. It puts the President on record as gutting the most popular program in the country. And it's likely to dramatically harden public sentiment against last year's health bill, as this "reform" gets lumped together with that legislation in the public mind.
Politics aside, this idea is a recipe for economic disaster. And if it's coupled with reductions to Social Security it will become an economic tsunami - that is, if it isn't one already. Even FEMA won't be able to rescue the Administration from an idea like this. The White House must be discouraged from making this recommendation -- now, or anytime.
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Why should those who have always paid into Medicare have to be put on Medicaid? Is it because the benefits are not as good? So once again the higher earner gets better?
Obama once made the remark that he could be hard nosed. He should have said he could be hard hearted.
The media is making a big deal out of Obama and Boehner and the speech Obama was going to make. One night is the republican debate and the other night is an important game. He could move it back or forward. I wouldn't do it on either night, but I hope Obama does and it helps get him primaried.
Obama reminds me of a teenager who wants to impress his friends, the hell with mom and dad and the school teachers. You know, the hell with those who were on his side and wanting the best for him.
State Senator Mark Leno has a bill (SB810) which would bring single-payer health care to California. Single-payer health care passed last term but Gov. Schwarzenegger vetoed it. Why hasn't it passed again with Gov. Jerry Brown? Call your Democratic state legislators. It's stuck in a State Senate Committee.
http://www.healthcareforall.org/documents/SB%20810%20Fact%20Sheet%203_14_11.pdf
Short of that, the group Consumer Watchdog, which brought us Proposition 103 in 1988, will have an initiative on the California ballot to put a robust, open-to-everyone, public health insurance option on the state's coming health insurance exchange.
http://www.consumerwatchdog.org/story/health-care-measure-seeks-public-option-rollbacks
1/9th of the country could at least get a public option if this passes next year. So please get involved with your state government politics at least half as much as your federal government politics, because goodness knows the insurance industry lobbyists are.
People in the United States say they wouldn't mind paying "more" in Medicare/Medicaid taxes for universal coverage don't know. Ask anyone in the UK, France, Germany and so forth about what is taken out of their pay plus VAT and numerous other taxes paid to fund government provided healthcare.
The second part is once you start going down the road of having a single payer system, the one who is doing the paying or much of it (that would be the government) holds great sway as to what will or won't be covered. So far the liberals are thrilled as the current administration has mandated birth control coverage and other services long favourites for the democrats; however sooner or later another party will be in control and things may swing the other way.
Currently this country spends more via Medicare/Medicaid in covering those in the last part of their lives than infants and children. That would have to change as you cannot expect young persons to pay into a system where they receive little or nothing out of it.
Yes, in the EU and UK and elsewhere with "universal" medical coverage outcomes for certain diseases and proceedures are better than the United States,but that comes from placing estrictions upon certain treatments and or demographics.
While the US has an appaling rate of infant mortality and new mother deaths, on average early pre-term infants have a higher rate of survival here than elsewhere.
For most types of cancer here again the United States has better survival rates for both men and women than the UK and EU. It does vary of course by region and type of cancer, but still.
There is a reason why many Europeans and others including royalty seek treatment at American hospitals for major diseases.
There is also the fact in almost every single "universal" healthcare country private insurance plans and hospitals exist for those who choose to augment coverage and or avoid the public health system all together.
We have a group in the US that determines what benefit you will get right now - the insurance companies - and they make the decision based on how much money you have. Most everyone will be better off when that decision making is move to a government office.
The augment coverage folks via insurance approach hurts no one - the rich ignore the option, but employers like to give such "Golden" plans to executives so they will feel special in the private room while their staff is forced to share a room.
http://www.consumerwatchdog.org/story/health-care-measure-seeks-public-option-rollbacks
If you are not in California, you can support a similar effort in your home state.
and i have been beating the drum for a long time that if the age was lowered it would be a huge jobs
program. lots of people only hold onto their jobs for the insurance. thousands of workers would retire or quit opening up jobs everywhere. a lot of older people who have pre-existing conditions handled quite well by drugs would start business and create more jobs, if they had insurance.
My wife and I have no health insurance. I like to believe that one of us will get a job that has health benefits instead of the contract we are both doing. She, on the other hand, keeps saying, "Once you loose your health insurance you might as well die; because that's the cheapest option for our nation." I hope she isn't right.
A low-cost public option clearly is necessary, but raising the age of full retirement is only logical. There won't be a "tsunami" or a "disaster." Most of us, these days, plan to work well past 65 in any case, because we feel young, strong, and able!
There are significant problems with the Medicare for all idea. Medicare underpays doctors already. Many doctors simply refuse to see or take new patients that are on Medicare. The ones that do often times bill their other customers more. How do they do that when every patient is on Medicare? The claims that Medicare is efficient are fraudulent. They count money spent on fraudulent claims, which are estimated at over $100 billlion per year, as if they were for legitimate claims. This while they deny twice as many claims as private insurers. The status quo has its problems, but Medicare does also and it is part of that status quo.