The Health Care Bubble?
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?Mr. Ponzi would be proud of our scheme.? |
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The fiscal cliff debate brought up some critical issues that are much more important than the tax rate argument. We cannot afford the spending path we are on. It is that simple. Someone will get less in the future. For Medicare, the biggest entitlement we have; providers, future seniors, and insurers will get less.
The idea that we keep the program as it is currently run, is financial folly. Democrats like to insist that no changes to Medicare can be made that take from recipients. We somehow should find that money from rich people or providers. That is a pipe dream. Providers will only cut so much before they cut services and adjust to lower reimbursement. Rich people cannot fund the rising cost of an aging population, no matter how high you tax them.
We can wait until we bankrupt Medicare or make modest adjustments now. We are living longer so why does Medicare have to start at 65? Maybe we make it 67 for those under 50 now. Maybe it means test it so wealthy people pay more in fees. Maybe we cap the number of tests and procedures doctors order. As long as we let seniors get every test and procedure a doctor can think of, we cannot control costs.
Now let?s pose the ethical question that is responsible for massive costs, that being end of life spending. Should we all pay for extending the life of a 90 year old by a few weeks? I know when it is our father or mother laying there, we want to extend life. The issue though is we are asking taxpayers who cannot afford it to fund that last gasp of life. That $250,000 we spend on that last few weeks needs to be weighed against preventing disease for a hundred younger people. Is that extra week of life for the 90 year old worth the trade off?
Politicians hate to deny juicy benefits to their constituents. Medicare is such a juicy program. President Obama is the only one who can make these tough recommendations. He knows the reality of the financial basis of Medicare. He is not running again and therefore can lead in making sensible cuts. I would willingly pay more in taxes if I thought we really addressed this looming health care bubble. The time is right for all the smart health care policy wonks to do what is needed.
My children are being forced to pay for benefits they will likely never receive. Frankly, current seniors deserve fair treatment, but that does not mean stealing from the younger generation. Just because the program has a stated level of benefits does not mean the senior generation should be immune from cuts. They will still get decent health care but our goal should be shared sacrifice, not dumping it on our kids or the few rich people who cannot possibly be taxed enough to fund future Medicare.
I have friends in their late 60?s who are spending more than $100,000 a year on their chronic care funded by Medicare. They get every test covered and take advantage of everything Medicare will reimburse. These are relatively healthy people. What happens when they really get sick? Where does this magic money come from? We borrow it and stick the future generation with the bill. The greatest generation of the depression and WWII is dying out, and the post war baby boomers are entering Medicare. Mr. Ponzi would be proud of our scheme. One day, and it is soon, the phony pot of gold will be empty. Medicare will turn into a government rationing program, a shell of what it was. It can still be a workable program but time to change it is passing us by. Which is worse? Pretending everyone will get Medicare as it is until it implodes, or making it less generous and more sustainable? I hope Mr. Obama creates a legacy of saving Medicare, rather than dumping the problem on the next President.
Bob Ehrlich, Chairman
DTC Perspectives, Inc.
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