Saturday, December 15, 2012

"Preserving Medicare Benefits by Controlling Health Care Costs"

From Campaign for America's Future:

The Challenge:
To "fix the debt," we should focus on fixing the economy. Investment in jobs and growth will a) reduce the costs of high unemployment, b) raise more revenue, and b) reduce the debt burden. Instead, a small but well-funded and loud group of "deficit hawks" is demanding to "cut entitlements," including Medicare. Now, as President Obama seems to be on the verge of forcing Republicans to accept tax increases on the wealthy, conservatives are demanding a large payoff in return: cuts to Medicare benefits that would raise costs for seniors now and undermine the program for future retirees.

The trade-off is morally offensive: Why should fairer taxes from the rich be allowed only if accompanied by less health care for the old or vulnerable?

Their cuts are aimed at the wrong target. We don't have an "entitlements" problem; we have a broken health care system. The rising costs of publicly funded health care programs like Medicare will consume a larger portion of the budget in the future if nothing is done. But the real problem is runaway health care costs generally, driven by the entrenched corporate interests – the drug and insurance companies and the private hospital complexes – that have made our health care the most expensive in the world.

Make the Case:

Voters overwhelmingly rejected the right's plan to turn Medicare into a "voucher" in the 2012 elections. Now conservatives have another strategy to weaken Medicare: raise the age of eligibility; that is, eliminate benefits for 65- and 66-year-olds. (Republican leaders in Congress don't want to admit that publicly, so they propose $600 billion in Medicare and Medicaid cuts without any explanation of how they arrived at that number or which specific policies they have in mind to reach that number.)

Denying Medicare to 65- and 66-year-olds will actually cost more money than it saves. The best estimate is that $5.7 billion in projected federal savings in Medicare will end up forcing individuals, states and employers to pay an additional $11.4 billion for health care...

There are also reports that House Republicans want to increase Medicare costs for people with higher incomes. But three out of four people with Medicare have incomes under $40,000, and the very small number of seniors with incomes over $80,000 already pay considerably more for Medicare.

If the overall U.S. health care system controlled costs as well as most European countries, both Medicare and overall health care costs would be fully affordable. To do that, you have to take on the drug companies, insurance companies and hospital complexes that drive up costs. Cutting benefits - or eliminating them for 65- and 66-year-olds - doesn't control costs. It simply shifts the costs from the public budget to individual seniors or their families.  (Economist Dean Baker of the Center for Economic and Policy Research documents this.)