Health Care is Expensive because the Government doesn’t pay their Bills in Full

Posted by PITHOCRATES - January 4th, 2014

Week in Review

Health care is expensive.  It’s why we have Obamacare.  To lower the cost of health care.  And give quality health care to everyone.  But why exactly is health care so costly?  And who’s to blame?  Well, let’s take a look at the cost of an appendectomy to get an idea (see Reddit User Posts $55,000 Hospital Bill for Appendectomy by SYDNEY LUPKIN, ABC News, posted 1/1/2014 on Yahoo! News).

When a 20-year-old man got over the pain of having his burst appendix removed in October, he got hit with a hospital bill he wasn’t expecting.

The bill from Sutter General Hospital in Sacramento, Calif., said the total charges were $55,029.31 but that the patient owed only $11,119.23 because his insurance had covered the rest.

Shocked, the patient took to Reddit to post the bill and vent his frustrations.

“I never truly understood how much health care in the U.S. costs until I got appendicitis in October,” he wrote on the social media site. “I’m a 20-year-old guy. Thought other people should see this to get a real idea of how much an unpreventable illness costs in the U.S…”

But the bill was not so unusual, given recent studies that showed how the cost of medical procedures could vary from hospital to hospital, said Timothy McBride, a professor and health policy analyst at Washington University in St. Louis….

Sutter General Hospital spokeswoman Nancy Turner said hospital billing is complicated, and that the hospital has people available to help patients navigate it. She said hospitals often serve many patients who don’t pay at all or don’t pay the actual cost of treatment because they are on Medicare or Medi-Cal, California’s version of Medicaid.

“Sutter Health agrees that an improved billing structure is needed, where published charges are more closely aligned with actual costs,” Turner said. “And a more straightforward pricing system is only possible when reimbursement from government-sponsored patients covers actual costs.”

How much did your television cost?  How much is your cable bill?  How much was your laptop?  Your tablet?  How much was your mobile device?  How much is your cable bill?  How much is your cellular bill?  People know these costs very well.  For they are very discerning shoppers.  And because they are manufacturers and providers bend over backwards to give their customers what they want at the lowest possible price.  This is free market capitalism at work.  Competition for our dollars makes businesses try to give us the highest quality at the lowest price.  But none of this happens in health care.  Because there are no free market forces in health care.

No one knows what their health care costs are.  Because they don’t pay the bill.  So they don’t know.  And they don’t care.  It’s so bad today that most couldn’t shop and pay for the own health care if they tried.  On the rare occasion they pay attention to their bill what do they do?  Blame the hospital for gouging on their bill.  But there is a reason they do this.  And it’s not because they’re greedy.  They do it because it’s the only way they can keep their doors open.  Thanks to the people who don’t pay their bills.  And the government who doesn’t pay all of their bills.  Leaving no choice for health care providers but to over-bill the insurance companies.  Who are the only people paying their bills in full and then some.

Obamacare will only make this worse.  By giving ‘free’ health care to more people.  Health care that the government won’t pay in full.  Which will force the health insurers to raise their premium prices further.  Until it is so expensive that no one will buy it anymore.  The so-called death spiral.  Opening the door for single-payer health care.  And Medicaid-quality health care for everyone.  Well, perhaps not quite Medicaid-quality health care.  With more people in the program wait times and rationing will be greater than they are currently in Medicaid.  So it will be worse than Medicaid.  The worse-quality health care currently available in the United States.

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Medicaid, Medicare and Frivolous Lawsuits make the Best Health Care System in the World more Expensive

Posted by PITHOCRATES - November 23rd, 2013

Week in Review

The American left loves Canada.  In particular their single-payer health care system.  This is what they wanted in the US.  Not Obamacare.  But they settled for Obamacare.  Until they get what Canada has one day.  Because it’s better.  At least, according to a chart.  That shows how wonderful Canadian health care is and how horrible American health care is (see The U.S. Health Care System Is Terrible, In 1 Enraging Chart by Mark Gongloff posted 11/22/2013 on the Huffington Post).

Yes, among this group of big countries, the U.S. spends far and away more on health care than any other. And yet it has among the lowest life expectancies of any developed country. People live longer in pretty much every country in Europe, including Greece, where the economy has been wracked by austerity for years…

Why is our system so terrible? Largely because it is built for profit. Unlike many other countries, the government has no role in either providing care or setting prices, and so prices skyrocket. It’s also too complex, which is one reason the Affordable Care Act, President Obama’s signature reform law, has gotten off to such a bad start.

The health care law is supposed to help with the cost problem somewhat. But it is built on the existing privatized system, which means it will probably not make a significant difference. A public option, also known as a “single payer” plan, would help. But that still seems like a pipe dream — although maybe Obamacare’s clumsy rollout will bring it closer to reality.

First of all it should be noted that Canada has one of the finest private health care networks in the world.  Outside of their single-payer system.  Which is something they share with all nations that have some form of national health care.  A private health care network for those who want and can pay for it.  And why is Canada’s private health care network the best in the world?  Perhaps you can guess why when you hear the name of it.  The Untied States health care system.  Just south of the border.

That’s right, for those with the means don’t wait in line for less than the best of health care.  They spend their own money to go to the front of the line to get the best health care available.  In the United States.  Often administered by Canadians.  Because the US pays the best doctors and nurses more than they can get in Canada.  So Canadian doctors and nurses, too, travel south across the border.

The US is one of the only countries where their poor suffer from obesity.  Because of generous food assistance programs.  Also, because we are a for-profit nation our food industry has figured out to give us more food for less.  Our beverage sizes have gotten so big giving us so much value for the money that Mayor Bloomberg tried to limit the size of beverages in New York.  And all American restaurants give us free refills.  Because they can.  While some European countries will charge extra for a package of ketchup.  All of this more food for less has led to our obesity problem.  Giving Americans heart disease and diabetes.  Shortening life expectancies.

US doctors are dropping out of Medicaid.  And Medicare.  More so now that the Affordable Care Act (Obamacare) is rolling out.  Why?  Because the government pays for these nonprofit programs.  And they are constantly trying to reduce their reimbursements.  Because the aging population is straining the Medicaid and Medicare programs.  And the government has addressed this problem by ‘discounting’ Medicaid and Medicare billings.  For years doctors and hospitals have tried to recover these shortfalls by charging more.  Especially insurance companies.  Greatly increasing the cost of health care and health insurance.  But the discounting grew so great that many health care providers just dropped these programs.  Because they couldn’t pay their people, their lab costs, their overhead, etc.  Especially since Obamacare has taken money from Medicare.  And ‘forced’ states to expand their Medicaid rolls.  But these discounted reimbursements aren’t the only thing raising health care costs.

While most of Europe has loser-pay laws to curtail frivolous lawsuits the United States doesn’t.  Because of the trial lawyers.  Who get quite wealthy suing doctors, hospitals and pharmaceuticals.  Exploding the cost of malpractice and liability insurance.  Which increase the cost of doctors, hospitals and pharmaceuticals.  Forcing them to raise their prices to recover these costs.  Making American health care more costly.

These are the reasons why the US spends more per capita on health care than all other nations.  Because they have the best health care system in the world.  And the best costs more.  While the government forcing health care providers to work below costs (Medicare and Medicaid) and the cost of frivolous lawsuits raise these costs even more.

The American health-care system is not terrible.  Single-payer systems are.  Because they all have a private health care network.  Which they wouldn’t have if single-payer systems were the best systems.  Just ask the Canadians who use their private network.  The US health care system.  Who will probably be the second greatest losers under the Affordable Care Act.  After the Americans.

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The Medicaid Expansion included in Obamacare may prove to be its Achilles Heel

Posted by PITHOCRATES - July 15th, 2012

Week in Review

Part of Obamacare includes an expansion of Medicaid.  The state’s health care programs for the poor.  As we know health care is very expensive.  Which has been the driving force behind Obamacare.  To cut these high costs.  And they’re going to do this by transferring a lot of these costs to the states.  Which has got them really nervous.  Because health care is very expensive (see Governors divided over Medicaid expansion by Michael A. Memoli posted 7/14/2012 on the Los Angeles Times).

America’s governors have long used their semiannual gatherings to lock arms in opposition to dreaded unfunded federal mandates and emphasize a pragmatic approach to problem-solving in stark contrast to a hyperpartisan, even dysfunctional Washington.

But the makings of a real divide loomed over the summer meeting of the National Governors Assn. here, as state leaders grappled with the fallout of the Supreme Court ruling that granted unexpected leeway with regard to a key component of President Obama’s landmark health law: whether to accept billions of federal dollars in return for expanding coverage for the poor through Medicaid…

But a greater number of governors on both sides approached the unexpected ruling with caution, largely out of concern for the long-term effect on state budgets that had been stretched to the brink by the economic downturn.

Through the Affordable Care Act, the government is set to spend an estimated $1 trillion over the next decade to help states insure Americans who make less than 138% of the poverty line, or about $15,400 annually, through an expansion of Medicaid. The provision was expected to extend coverage to about 17 million people, on top of the approximately 50 million Americans who are currently covered by the program…

But other governors are worried that already struggling states may be left in the lurch in the future.

It’s clear why these governors are wary about this Medicaid expansion.  An increase of Medicaid patients from 50 million to 67 million is an increase of 34%.  States are slashing other spending to cover their Medicaid spending.  As the Medicaid rolls are already overwhelming some states.  And the thought of increasing their Medicaid spending by 34% is making them very nervous.  For anything can happen in Washington.  Including the cutting of federal subsidies.  Which could leave some states with spending obligations they just won’t have the ability to pay.

Could this be part of some grander design?  Well, of course.  The proponents of Obamacare wanted a full-fledged taxpayer-financed national health care system.  Something the people vehemently rejected.  So they introduced a personal and an employer mandate to put the private insurers out of business.  More and more people will drop coverage because the fine will be cheaper to pay thus forcing insurers to raise premiums on the fewer remaining policy holders.  Which will encourage more people to drop their coverage.  And so on until the last private insurers shut their doors.  Leaving the federal government as the health care provider of last resort. 

The expansion of Medicaid will force states to spend more than they can afford to.  Requiring ever more federal assistance.  It will be just a matter of time until the federal government will have to step in and be the health care provider of last resort.  And before you know it they will have their full-fledged taxpayer-financed national health care system.  While the taxpayers stand in shocked disbelief wondering what just happened.  And muttering “government for the people my ass.”  Unless the states refuse this power grab by Washington.  And say ‘no’ to that federal money and not expand their Medicaid programs.  Perhaps making the Medicaid expansion the Achilles Heel of Obamacare.

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CBO Scores Obamacare over 10 Years of Revenue and 9 Years of Implementation and finds it about Twice as Costly

Posted by PITHOCRATES - March 18th, 2012

Week in Review

The news just keep getting worse.  Obamacare is twice as costly.  It will destroy the private health insurance industry. Prolong the Great Recession.  And reduce the quality of our health care.  There’s just nothing good that we can say about it.  Other than, perhaps, it will make President Obama a one-term president.  Like Jimmy Carter.  Who also wreaked  economic destruction on the nation.  Making way for the new president to repeal Obamacare.  And save the nation from this most tragic fate (see ObamaCare: If Possible, The News Is Getting Worse by Grace-Marie Turner posted 3/14/2012 on Forbes).

To mark the law’s two-year anniversary, the House of Representatives is planning a vote to repeal one of the law’s most unpopular provisions — the Independent Payment Advisory Board (IPAB), which many seniors fear will become Medicare’s rationing board…

ObamaCare will cost $1.76 trillion over a decade, according to a new projection released Tuesday by the Congressional Budget Office, rather than the $940 billion forecast when it was signed into law.

The new 10-year projections cover nine years of ObamaCare’s implementation (2013-2022). Original estimates counted only six years of implementation — a budget gimmick to obscure the true cost of the law. At this rate, the conservative estimates of ObamaCare’s cost will be $2 trillion over 10 years, not the $1 trillion that President Obama promised…

Sen. Mike Enzi (R-WY) released a statement saying that the CBO’s estimate also shows that the new health law will dramatically increase Medicaid spending and result in 4 million fewer people getting health insurance through their jobs. So much for being able to keep the coverage you have now “no matter what,” as the president promised.

There will be rationing.  This despite the $2 trillion price tag for the program.  Which when you compare 10 years of revenue to 10 years of implementation the price shoots up from $1 trillion to somewhere closer to $2 trillion.  Which adjusts their previous estimate up 100%.  Talk about a large margin for error.  Which really begs the question do you want the same people who were off 100% in their cost estimates running one-sixth of the U.S. economy?  Or be in charge of rationing life-saving health care services?  And if that wasn’t bad enough (and don’t you think it should be?) it will also end private health insurance like you have now.  Meaning that if you like the plan you have, tough.  You’re going to lose it.

An AP-GfK poll taken early this month shows that only about a third of Americans (35 percent) support the health care law, while nearly half (47 percent) oppose it. That’s about the same split as when it passed.

Opposition remains strongest among seniors, many of whom object to Medicare cuts that were used to help finance coverage for younger uninsured people…

A new study of employers conducted by Willis Human Capital Practice found that employers expect higher health costs for both employers and employees as a result of ObamaCare, and many expect to shift employees into taxpayer-paid coverage once the option is available. That shift would certainly exacerbate the exploding costs of the law.

Last year, health costs rose 9 percent for employers, triple the rate of the year before ObamaCare’s provisions began to be implemented. Employers expect costs to only go higher…

Uncertainty about the future of the health sector is also drying up investor capital — and threatening tomorrow’s medical innovations. The share of venture dollars flowing to seed and early-stage investments in biotechnology and medical devices has plummeted since 2007, when investors pumped $3.6 billion into 332 deals in which a price was disclosed, according to data compiled for Kaiser Health News by FactSet Research Systems. Overall venture investing declined by nearly one-third as the economic recession set in.

Obamacare is unpopular.  It will gut Medicare.  Kill the private health insurance industry.  And when it does all those people covered under plans they got at work will be dumped into Obamacare.  Absolutely exploding costs.  And forcing more rationing to spread limited resources over more patients.

The economy is mired in recession.  The Great Recession lingers on.  With unemployment at 14.9% (the more realistic U-6 rate that counts everyone who can’t find full time work as opposed to the U-3 rate that doesn’t count everyone who can’t find full-time employment).  And because of the costs of Obamacare employers aren’t hiring.  So the economy isn’t going to improve anytime soon.

With the fall in medical investment you can add in a further decline in quality to the high costs and rationing of health care.  While the economy sinks further into recession.  Unless the next president repeals Obamacare.  Or the Supreme Court strikes it down first.  For if we don’t repeal it the country may never recover from the economic fallout that Obamacare wreaks.

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LESSONS LEARNED #58: “Presidents with aggressive domestic agendas tend to have inept and naïve foreign policy.” -Old Pithy

Posted by PITHOCRATES - March 24th, 2011

Social Security:  A Fiscal Disaster just Waiting to Happen

FDR’s New Deal programs were an abject failure.  Nothing he tried ended the Great Depression.  Proof positive that Keynesian Economics doesn’t work.  But this Britain infatuated the world.  Many still cling to the teachings of Keynes.  Because he empowered Big Government.  And people in government love that.  But government is pretty inefficient.  And not very good at doing things.  Take Social Security, for example. 

It started as a payroll tax of 1%.  They argued it was a paltry price to pay to help the disabled and retired.  Of course, the actuaries never saw birth control and abortion coming.  So as the population aged, the birthrate declined.  With the boomers starting to retire, the great pyramid inverted.  More people are collecting than paying in.  Today the tax rate is 6.2%.  That’s 6.2 times the FDR rate.  Which is an increase of 520%.  The federal government has increased the rate 20 times to save the program from bankruptcy.  And, guess what?  It’s STILL going bankrupt.  It’s one fifth of the federal budget.  And it keeps getting bigger.  And it’s such a political third-rail that no one will touch it.  Taxpayers will have to pay so much in taxes that they will have to live a very austere life to pay for people they don’t even know who are collecting far more than they ever paid in.  Because, according to the actuaries, people were just living too long.  That’s another thing they never saw coming. 

In 1937, the average lifespan was 60 years.  The retirement age was 65.  So, in other words, the average social security beneficiary would be dead for approximately 5 years before they were eligible to collect Social Security.  Now that’s how you keep a program solvent.  Make sure that most of the people paying into it die before they have a chance to receive benefits.  Today the average lifespan is about 78 years.  The retirement age is 67.  So the average retiree will collect benefits for approximately 11 years BEFORE he or she dies.  The actuaries NEVER envisioned this.  Damn the American health care system and their miracle drugs.  We’ve never lived longer.  Or burdened the government more.

FDR was a domestic policy disaster.  He ruined this country.  Any objective analyst would agree.  But we still love him for getting us through the dark years of World War II.  Of course, much of the world doesn’t for his gift of the Cold War to these oppressed people.

FDR loved Joe Stalin, Joe Stalin walked all over FDR

In the 1930s, there was some serious government tinkering going on with economies.  FDR in the USA.  Hitler in Germany.  Mussolini in Italy.  And Joseph Stalin in the Soviet Union.  FDR was on the same page, especially with Mussolini and his beloved Joseph Stalin.  He loved these guys.  Until they went rogue.  FDR had no problem hating Germany.  He was never a fan of the country.  But when Germany and the Soviet Union entered into a nonaggression pact to divide and conquer Poland, thus launching World War II, it broke his heart.  He and all his New Dealers were devastated.  Uncle Joe was the model they wanted to copy.  They loved this man.  And what he was doing in the Soviet Union.  Acting bold without a pesky Congress hindering him.  They loved him so much that they didn’t try all that hard to hunt down the Soviet spies within the FDR administration.  And there were plenty of them to hunt down.

But then God answered FDR’s prayers.  Hitler launched Operation Barbarossa, a massive invasion of the Soviet Union.  This part of the war became hell on earth.  The Eastern Front.  There cruelty knew no bounds.  Scorched earth policies.  And genocide.  Hitler’s SS did most of these acts of barbarism.  And the dreaded Einsatzgruppen took systematic murder to new heights.  The Eastern Front saw the worst cruelty of man.  But there was a bright spot.  For FDR.  He could welcome Uncle Joe back into the fold.  And did. 

Roosevelt was a master diplomat.  He could charm the pants off of anyone.  He had a gift.  And it filled him with great pomposity and reckless arrogance.  People warned him about Stalin.  And Soviet Communism.  But FDR poo pooed them.  He said he could talk to Uncle Joe.  Reason with him.  Give a lot and ask for nothing.  And he did.  FDR thought Stalin would then ask for nothing more and work with him in establishing world peace.  Just like a typical progressive/liberal.  And how did that work out?  Not only did the Red Army NOT pull out of occupied countries, they tried to occupy more.  Soviet Communism took Eastern Europe, tried to take Turkey and Greece and pushed into Iran.  We pushed some of these pushes back.  But the Cold War was on.  FDR had given so much that the Soviets had control over huge populations, condemning them to the misery of life behind the Iron Curtain.  And suffer they would for 44 long years.

Despite the fiscal carnage and world misery FDR left in his wake, he is still loved and adored by those on the Left.  People as pompous, arrogant and naïve as he.  Who still want to do things the Roosevelt way.  Despite the unmitigated disaster the FDR way turned out to be. 

Mismanaging Medicare/Medicaid and the Vietnam War

We can best describe LBJ‘s Great Society as doubling down on FDR’s New Deal.  And it was as big a disaster as the New Deal was.  LBJ was going to end poverty and racial injustice.  And pour federal money into education to make it better.  He failed.  Based on the Left’s attacks on the Right, we’re still beset by poverty and racial injustice.  (Even though we elected a black president.  Go figure.)  And that the teacher unions are constantly going on strike to get more money.  For the kids, of course.  And if we still have these problems it can only mean one thing.  The Great Society failed.

Included in the Great Society were Medicare and Medicaid.  Health insurance for the elderly and the poor, respectfully.  Currently, this is another 1/5 of the total federal budget.  And it has the same problems as Social Security has.  A declining birthrate and a growing elderly population that is living longer.  The actuaries crunched their numbers before the explosion of birth control and abortion.  So their projections are just as bad as FDR’s were.  The tax rate went from 0.35% to 1.45%, and increase of 314%.  Unlike Social Security, the death rate never ran in the black for Medicare/Medicaid.  From the get-go people were living 3 years beyond the average retirement age, consuming health care benefits.  Now the average American is living 11 years into retirement.  And a lot of them aren’t doing that by a healthy diet and exercise.  They’re doing it by consuming vast amounts of health care benefits.   LBJ took the problems of the New Deal and multiplied them by ten.  The cumulative effect of these two programs crashed the economy into stagflation and misery in the 1970s.  And if that wasn’t bad enough, he pushed the nation close to civil war by his mismanagement of the Vietnam War.

JFK got us into Vietnam.  But Johnson expanded our involvement.  And tried to manage it from Washington.  With the Whiz Kids left over from JFK.  A bunch of poindexters who tried to run a war by looking at numbers in columns.  Body counts.  And restrictions on the rules of engagement.  It was a horrible way to run a war.  It just prolonged it.  Created more American casualties.  And empowered our enemy.  Can’t bomb the North.  Can’t bomb their supply routes (i.e., the Ho Chi Minh Trail).  We did everything we could to help the enemy by giving them safe sanctuaries up the ying-yang.  And when we had a chance to deliver a knockout punch after the failed Tet Offensive, we did NOTHING.  Partly because Walter Cronkite said the war was lost.  Partly because of the hippies protesting on our college campuses.  And, of course, the race riots.  LBJ couldn’t understand it.  He had given so much with his Great Society and yet people didn’t love him.  All because of that damn war in Vietnam.  JFK’s war.  How he wished they never went there.  It was a distraction to his beloved Great Society.  And it was a bitch to pay for. 

Bad Domestic Agendas, Bad Foreign Policy

Unlike FDR, LBJ could not win his war.  Of course, FDR didn’t have hippies who hated their country protesting against him.  Just a bunch of communists in his administration who were simpatico with his Big Government view.  Because of Vietnam, though, the Left would never have the same fond feelings for LBJ as they do for FDR. 

Their foreign policy has made the world a less safe place.  FDR gave us 44 years of Cold War.  And LBJ weakened the United States by his failure in Vietnam.  Made us a paper tiger.  Made our enemies not fear us anymore.  They started taking chances.   Doubting our will to respond to their aggression.  Or, if we did, they figured we would just cut and run after a few casualties.  And that has been their strategy since.  Not to win.  But to make us quit.  By making us bleed.

Following World War II we had great prosperity.  Peace.  And happiness.  The 1950s.  Following Vietnam, we had stagflation and misery.  High crime rates.  Drug infestation and abject poverty in our big cities.  Abortion and birth control.  The 1970s.  All this despite the programs of LBJ’s Great Society that were to end all those woes.  And with the declining birthrate, the fiscal problems would only get worse.

Their domestic programs are pushing the nation ever closer to bankruptcy.  There appears to be no solution to the damage they’ve done.  Or will do.  Social Security and Medicare/Medicaid will either bankrupt the country.  Or ignite civil unrest as benefits are slashed.  Neither will be good for the country.  But this is what we get from presidents with aggressive domestic agendas.  Fiscal crises.  Domestic unrest.  And an unsafe world.

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Partnering with the Grim Reaper: Saving Medicare, Medicaid and Obamacare

Posted by PITHOCRATES - December 29th, 2010

Taxing the Young to Save Medicare for the Old

Medicare and Social Security make up the lion’s share of the federal budget.  The government is setting records for both deficits and debt.  And everyone is projecting both of these programs to go bankrupt.  A dim picture for anyone hoping to rely on either for their retirement.  And they’re worried (see AP-GfK Poll: Baby boomers fear outliving Medicare by Jennifer Agiesta and Ricardo Alonso-Zaldivar posted 12/29/2010 on the Associated Press).

A new Associated Press-GfK poll finds that baby boomers believe by a ratio of 2-to-1 they won’t be able to rely on the giant health insurance plan throughout their retirement.

The boomers took a running dive into adolescence and went on to redefine work and family, but getting old is making them nervous.

Now, forty-three percent say they don’t expect to be able to depend on Medicare forever, while only 20 percent think their Medicare is secure. The rest have mixed feelings.

The problem with both Medicare and Social Security is that they are both Ponzi schemes.  Scams by the government to make generations dependent on government.  And to funnel a lot of cash to Washington.  But the Baby Boomers mucked up the works.  Their free love in the 60s and use of birth control and abortion left their family tree a barren one.  The boomer generation of families with maybe 2-3 kids will support in retirement their parent’s generation of families with 10+kids.  There’ll be more people entering retirement than entering the workforce to pay for those retirees.

Here’s the math: when the last of the boomers reaches age 65 in about two decades, Medicare will be covering more than 80 million people. At the same time, the ratio of workers paying taxes to support the program will have plunged from 3.5 for each person receiving benefits currently, to 2.3.

And the numbers are worse.  Because Social Security will be covering those same people.  We’re approaching one working person supporting one person in retirement (Medicare and Social Security benefits combined).  Even Bernie Madoff’s great Ponzi scheme had a better ratio when his pyramid imploded.  It just isn’t sustainable anymore.  Something’s gotta give.  And by something I mean benefits paid out to people.

The government can’t balance its books without dealing with health care costs, and Medicare is in the middle. Some leading Republicans and a few Democrats have called for phasing out the program and instead giving each retiree a fixed payment — or voucher —to help them buy private medical insurance of their choice. The poll found doubts about the idea, and a generational debate.

Overall, a narrow majority (51 percent) of Americans opposed the voucher plan. But those born after 1980 favored it by 47 percent to 41 percent, while seniors opposed it 4-to-1. A majority of boomers were also opposed, with 43 percent strongly objecting.

And here’s the problem.  Those who don’t pay payroll taxes anymore (retirees) are all for raising taxes to pay for their current level of benefits.  No matter how much it bankrupts future generations.  And these people vote.  More than anyone else.  So for good reason they call Social Security the third rail of politics.  You touch it at your own peril.  Those with a lifetime of paying taxes ahead of them, on the other hand, would rather raise a family than support an individual in retirement.  Not only do they want to touch the third rail, they want to short it out.  But they don’t have the numbers.  Yet.

States to Make Steep Cuts in Medicaid to Stave off Bankruptcy

And we even haven’t talked about Medicaid yet.  This program is bankrupting the states.  It’s their biggest budget item.  And they can’t sustain it any longer (see Medicaid Pushes U.S. States Off ‘Cliff’ as Governors Seek Cuts by Christopher Palmeri and Pat Wechsler posted 12/22/2010 on Bloomberg).

Governors nationwide are taking a scalpel to Medicaid, the jointly run state and federal health-care program for 48 million poor Americans, half of whom are children. The single biggest expense for states, Medicaid consumes about 22 percent of their total $1.6 trillion in expenditures, more than what is allocated to elementary and secondary education, according to a National Governors Association report.

Talk about being stuck between a rock and a hard place.  You know that states aren’t going to cut education.  The unions won’t let them.  So they have to address the 800 pound gorilla in the room.  And cut Medicaid.

Governors are slashing Medicaid to close as much as $140 billion in budget deficits for the 12 months starting in July 2012, after eliminating $130 billion in gaps this year, according to the Center on Budget and Policy Priorities, a Washington-based research group. Spending is being cut even though state revenues rose for the three quarters ended Sept. 30, as the U.S. recovered from the longest recession since the Great Depression, the Nelson A. Rockefeller Institute of Government in Albany, New York, said in a Nov. 30 report.

“I don’t think most states want to sentence people to death,” said Judy Solomon, co-director of health policy at the Center on Budget and Policy. “But what we see is a pretty bleak picture of tough cuts made this year, and next year’s numbers look worse.”

The sad truth is that sick people are costly.  Dead people aren’t.  So you can see where this is going.  Rationing.

Spending on Medicaid nationwide rose 8.8 percent last year, the most since 2002, according to Kaiser. Nearly every state issued at least one new policy to cut program costs in the past two years, including benefit reductions, increased copays and lower reimbursements to health-care providers.

Cost cutting and reductions in benefits.  Rationing.  And you know where that will lead to.  More dead people.  Which is the only thing that will save Medicaid.  That, or federal contributions.

Every state has a unique formula for calculating the federal contribution for Medicaid. The 12 with the highest personal income, including California, New York, New Jersey, Connecticut and Colorado, typically depend on the U.S. government for about half their expenditures.

Lucky for the states that the federal government has money to spare.  Wait a tic, they don’t.  They’re setting record deficits and debt.  They don’t have the money.  Especially now that they’ve thrown Obamacare into the mix.  And the cost for this behemoth will dwarf Medicare and Medicaid.

States face the prospect of enrolling 16 million more people in Medicaid beginning in 2014 under the Patient Protection and Affordable Care Act, the health-care law Obama signed in March. It expands coverage to include certain childless adults under 65, according to Foley & Lardner LLP, a law firm in Milwaukee. The federal government will pay 100 percent of the increased expense for the first three years.

Well, perhaps not.  They’ll be sticking the states with some of those costs.  Poor states.  These unfunded federal mandates are killing them.  But they won’t be the only ones dying.  In three years time, when those federal subsidies expire, some of the current Medicaid patients may lose their heath care benefits.  And die.

Death Panels to Decide Life and Death

The problem with healthcare is that the raison d’être of healthcare is the very thing bankrupting it.  Providing healthcare to sick and dying people.  If the sick and dying would just hurry up and die these healthcare programs (Medicare, Medicaid and Obamacare) would be just fine.  If only there was some mechanism to encourage people to take a pill to manage pain instead of consuming expensive healthcare services.  I mean, they are only delaying the inevitable.  They should just suck it up.  And do the right thing.  After receiving something like, oh, I don’t know, let’s call it end of life counseling (see WSJ Opinion Death Panels Revisited posted 12/29/2010 on The Wall Street Journal).

On Sunday, Robert Pear reported in the New York Times that Medicare will now pay for voluntary end-of-life counseling as part of seniors’ annual physicals. A similar provision was originally included in ObamaCare, but Democrats stripped it out amid the death panel furor. Now Medicare will enact the same policy through regulation.

We hadn’t heard about this development until Mr. Pear’s story, but evidently Medicare tried to prevent the change from becoming public knowledge. The provision is buried in thousands of Federal Register pages setting Medicare’s hospital and physician price controls for 2011 and concludes that such consultations count as a form of preventative care.

No wonder they hid it.  Encouraging people to hurry up and die.  That’s something that doesn’t win you points at the PTA.  The law as written isn’t all that bad, though.  The panels are voluntary.  So far.  But everything Big Government has done started small.  They are, after all, the master of incrementalism.  And with out of control healthcare spending bankrupting Medicare and Medicaid, what do you think these panels will evolve into?

The regulatory process isn’t supposed to be a black-ops exercise, but expect many more such nontransparent improvisations under the vast powers ObamaCare handed the executive branch. In July, the White House bypassed the Senate to recess appoint Dr. Berwick, who has since testified before Congress for all of two hours, and now he promulgates by fiat a reimbursement policy that Congress explicitly rejected, all while scheming with his political patrons to duck any public scrutiny.

If there was nothing to hide they wouldn’t have hidden this provision so deep in the federal register.  But when you hide things, there are reasons you hide them.  So much for transparency.  And the most ethical Congress ever (of course an ethical Congress is a moot point when the executive rules by fiat).

Under highly centralized national health care, the government inevitably makes cost-minded judgments about what types of care are “best” for society at large, and the standardized treatments it prescribes inevitably steal life-saving options from individual patients. This is precisely why many liberals like former White House budget director Peter Orszag support government-run health care to control costs: Technocrats in government can then decide who gets Avastin for cancer, say, and who doesn’t.

When a government bureaucrat decides who gets life-saving medication and who doesn’t, that sounds like a death panel to me.  Because that decision has the power of life and death.  They can be as nontransparent as they want but the truth is pretty clear.  To control the out of control spending of Medicare and Medicaid (and, in time, Obamacare), they will be partnering with the Grim Reaper.  Because dead people don’t consume health care benefits.  And that is their biggest problem.  Consumers of benefits.

The Swedish National Health Care System Rations Care

So what about the social utopias of European Socialism?  Those advanced nations that have national healthcare?  Are they having these problems?  Of course they are.  In fact, their future is ours.  Here’s a small sampling of what to expect (see Man’s penis amputated following misdiagnosis posted 12/29/2010 in Science and Technology on The Local).

A Swedish man was forced to have his penis amputated after waiting more than a year to learn he had cancer.

The man, who is in his sixties, first visited a local clinic in Blekinge in southern Sweden in September 2009 for treatment of a urinary tract infection, the local Blekinge Läns Tidning (BLT) reported.

When he returned in March 2010 complaining of foreskin irritation, the doctor on duty at the time diagnosed the problem as a simple case of inflammation.

After three weeks passed without the prescribed treatment alleviating the man’s condition, he was instructed to seek further treatment at Blekinge Hospital.

But it took five months before he was able to schedule an appointment at the hospital.

When he finally met with doctors at the hospital, the man was informed he had cancer and his penis would have to be removed.

It remains unclear if the man would have been able to keep his penis had the cancer been detected sooner.

The matter has now been reported to the National Board of Health and Welfare (Socialstyrelsen) under Sweden’s Lex Maria laws, the informal name used to refer to regulations governing the reporting of injuries or incidents in the Swedish health care system.

Misdiagnosis.  And long waits.  National healthcare.  Where government bureaucrats cut costs and make doctors work long hours.  Not a very attractive offer for all those years of medical school.  So there’s a doctor shortage.  And, consequently, long waits.  In this case, 6 months to be advised he needed to go someplace else.  Then another 5 to get an appointment someplace else.  In the mean time the cancer spread.  This is what happens when you ration health care.

Is this the future you want?  It’s not the future I want.

The Third Rail of Politics is a Generational Thing

It’s a generational battle.  The young want to cut taxes (and benefits).  Because they’re paying those taxes.  And not consuming the benefits.  The old want to raise taxes and maintain benefits.  Because they’re not paying those taxes.  But are consuming the benefits.  Right now there are more old than young.  So you can guess who will win this struggle.  Bankrupting the future will help the politicians stay in office today.  So the old will win.

But there is a little irony in all of this.  To save these programs (Medicare, Medicaid and Obamacare), they need old people to die.  But once they do, the politicians will lose their political support.  The younger generation (whose future the politicians mortgaged) will then broom them out of office.  And they will be all too glad to short out that third rail once and for all.

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