It’s Choosing Time On Medicare and Medicaid

By Yashwanth Manjunath

We are on the cusp of the biggest fight over Medicare and Medicaid that we have ever seen in the history of the programs. Paul Ryan’s 2012 budget is the most serious and bold attempt on the part of Republicans to destroy the programs once and for all, and with the capitulator-in-chief in the White House, anything is possible. But Barack Obama can’t play the same game with the 2012 budget that he did with the Bush tax cuts, because this time the stakes are too high.

While Ryan’s Medicare and Medicaid “reforms” reduce the debt to GDP ratio to 10% by 2050,  by 2030 Seniors would be spending $20,000 a year out of their own pockets on health care costs. Meanwhile their entire Social Security benefits at the time would be $21,000. Further down the road, the staggering costs of private insurance would absorb both the Medicare “premium support payment” and the entirety of Social Security benefits! The private wealth of the entire elderly middle class would evaporate under Ryan’s proposal.

Given that the United States currently spends more money on health care per capita and as a percentage of GDP than every other country in the world, the focus cannot just be what plan saves the federal government the most money by just shifting the costs onto the patients. Much more important is what plan actually cuts down on total health care expenditures.

In January of 2009 the conservative Lewin Group, affiliated with large health insurance company UnitedHealth Group, studied the impact that several proposed health care reform bills would have on federal health care spending, total number of uninsured remaining, and total health care expenditure savings. What they found was that Pete Stark’s new single-payer Americare proposal covered the greatest number of uninsured, and was the only plan to actually cut total health care expenditures in doing so (certainly not a result the Lewin Group was hoping for given their understandable opposition to single-payer).

While Americare would have increased federal government health care expenditures by $188.5 billion for 2010, it would have insured 48.9 million people (everyone), and cut total health care costs by $58.1 billion. Of course, those savings alone are not enough to fully rein in exploding health care costs, but Americare would also give the government increased leverage to set rates and regulate price-gouging on the part of health care providers. Not to mention that as a system of health insurance, it is inarguable that a single-payer plan is the best option for both covering everyone, and saving money.

Without Medicare and Medicaid, millions of the elderly and the poor would lose health insurance coverage entirely. As Bernie Sanders recently pointed out on MSNBC, with 45,000 Americans dying each year due to lack of health insurance, this is literally a life and death issue.

So what will it be? Will Obama allow Paul Ryan to crush the most vulnerable people in the country by joining hands with him in dismantling Medicare and Medicaid? Or will he finally fight back and present the only alternative for protecting the retirement, health, and lives of the American people, a new single-payer system to supplement Medicare and Medicaid?

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