Sunday, October 18, 2009

"Medicare for All"

The Arkansas Times is running with Mike Ross' passing comments, likely stemming from frustrations about the increasingly complex beast of a health care meddling bill they are brewing, about simply having "Medicare for all".

Max Brantley writes that "the simple clarity and good sense of Medicare for all overtakes me."

Statists from both the left and the right live in a dream world, where someone else pays for all the "good sense" they dream up. The main reason we grownups have for telling you liberal kiddies "no" to Medicare for all is the same reason we use to tell the kiddies on the right "no" to America policing the world and occupying over 100 countries in order to "make us safe". We can't afford it. It doesn't matter if you think its a good idea, or a bad idea. We don't have the money. All we can do with these unsustainable polices is put the bills for them on the national credit card until the Chinese tell us we are over limit. Grow up kids, I'm begging you.

As a matter of fact, we don't even have the money to continue paying for Medicare for the narrow slice of the population which is now receiving it.

Medicare part A is currently all but insolvent. By that I mean that amount of money spent on part A exceeds the amount collected in payroll taxes. A few years ago, before baby boomers started retiring, the amount collected exceeded the amount spent, so there was a "trust fund" accumulation called the Medicare HI trust fund.

There is no money in this fund, it was all spent for other stuff and the only "assets" in the fund is a bunch of IOU's from the Federal government. They now have to pay back those IOU's by borrowing from someone else, but even if all of the money was really there, the HI fund will be depleted in ten years. In 2019 the HI fund is projected to be exhausted and collections will only amount to 78% of expenditures. From there it gets worse.

That is part A, but what about parts B (doctor's visits) and D (prescription drug coverage)? Those are funded by a combination of premiums and general revenues. Did you realize that much of Medicare is funded by general revenues, or did you think that your payroll deduction covered it? Sorry Charlie, those payroll taxes are not even close to covering it. General revenues currently pay for about half of Medicare spending, and it is projected to get worse.

A few years ago, about one of every six Federal revenue dollars went to Medicare. In forty years, assuming federal taxes stay proportional, it will consume one of every two dollars! That does not even count Social Security, which is a model of stability by comparison.

The reason Medicare looks so good compared to private insurance is that private insurance is run by grown-ups who are responsible enough to make sure the services they provide are sustainable. The insurance companies may not be ethical, but they are honest. They exercise the brutal honesty that the laws of economics demand.

Medicare on the other hand, is run by egotistical politicians who have flattered and indulged people in order to betray them. They are neither ethical nor honest. They don't care about the bottom line, or the economic realities. They look only to the next election, not the next generation.

They see their job as redistribution of wealth, plundering group X to get the votes and cheers from group Y. And whose wealth is easier to plunder than that of the next generation? They are not around to complain or vote against the pillaging of their future income. The unborn are easy victims of our political class, hence the massive use of debt to pay for outlandish political promises.

Private insurance companies ration services right now, so they are the bad guy. At some point, when the Chinese communists tire of loaning our government money, government will start rationing all the health care it pays for. Unfortunately it is easier to change insurance companies than it is to change governments.

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