When is Washington going to get real and cut medicare?

[jogger08152]

The 2004 US Federal budget deficit was 412 billion dollars. The 2005 deficit is projected to be 331 billion.

If you are a conservative/republican, I'd love to hear your thinking about why your party is so vocal about the need to reduce spending on programs that may run into shortfalls in 15-20 years, yet are -silent- when the president and congress you elected, run a deficit of a billion dollars a day NOW?

Please, 'splain.

[lastchance]

Because this can't get better. It only gets worse. There will be more old people and less young people. People live longer. That means the ratio of people on Medicare to people working gets smaller. This trend is not going to reverse itself.

And so, we have to pay huge amounts of money to keep this program, which is impossible to pay for. A billion dollar spending debt is fine if you make it a very specific crisis-related spending. A long term debt buildup over time due to a government program that will only get more expensive over time is absolutely terrible.

Medicare needs to be cut, because you simply can't pay for it. You can pay off a billion dollar spending debt at one point in time.

[lastchance]

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grants and govt programs for alternative energy, revamping of the public education system, more programs for retraining laid off employees in dying industries.

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Good stuff right there. Definitely like those ideas.

[whiskeytown]

I'd rather see it go to Americans who produce less then Iraqi's who produce nothing or corporations who already make billions in profits.

a single payer healthcare system can work, but as it stands, letting the market raise rates to the maximum...that won't happen.

I predict medicine is going to be coming forth in a more socialized version pretty soon. Hell, let's face it - with companies like Walmart not giving health benefits anyways, it makes more sense to have a public health care system with fixed costs cause we're paying for it either way - better to pay for it at cost then at an increased markup for private HMO's and hospitals, most of whom can't provide decent care anyways.

So in one sense, I think your poll is moot - I think our health care system will be undergoing some radical changes to a more federal program. As it stands, it's getting out of control, but the answer isn't to cut medicare.

RB

[frizzfreeling]

Whether you cut medicare or not, those people will still need medical care. If they cant afford to pay their bill, the hospital will be stuck with it. This then raises the price YOU have to pay when you go to the hospital. So you are still paying for that person's care. Hospitals cannot turn people away for lack of payment ability. They just increase the price across the board and those that can pay make up for those that cant. You are screwed either way and just trying to fool yourself by reducing medicare.

First, Wal-mart does provide health insurance coverage for its employees, and over 90% elect to have it according to them.

Second, I agree that the Medicare system is going to collapse soon, and that cutting benefits and raising taxes cannot possibly save it. Major reform is needed, and quickly.

However, when facing a problem such as this, why does your gut reaction tell you that bigger and larger government is the solution?

My gut reaction tells me that the efficiency and productivity of the private sector is the solution to the impending collapse of Medicare.

There is a key economic principle you have to understand here - welfare loss. When the government taxes me $100 out of my paycheck, that does not become $100 in Medicare benefits for a retiree - it becomes more like $50 after the original $100 is run through the bureaucratic gauntlet, being syphoned off left and right.

My gut reaction tells me of a solution where if I had a private health account from which I could purchase private health insurance (which results in far greater benefits than Medicare), $100 in assessed taxes enters my private account and actually grows greatly beyond $100 in the decades leading up to my retirement (through secure investments by a highly capable firm, we're not talking me personally gambling on the stock market), and it would allow for the ability to choose from several options - Medical Savings Accounts, private insurers such as an HMO - encouraging price competition which will encourage market efficiency and keep premiums lower.

That is, at least, my gut reaction. Choice and control over my own life.

[cdxx]

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There is a key economic principle you have to understand here - welfare loss. When the government taxes me $100 out of my paycheck, that does not become $100 in Medicare benefits for a retiree - it becomes more like $50 after the original $100 is run through the bureaucratic gauntlet, being syphoned off left and right.

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medicare is insurance, not a private savings account that you can use when you fall sick. think of your tax as the insurance premium. if you were paying $100 to a private insurer, you would be getting close to $50 in actual benefits, due to administrative costs. the reason why medical insurance enterprise is so profitable is because their adminitrative costs are very high.

in fact, since medicare tax is pre-income tax, $100 in medicare payments, and getting $50 back is not bad, and much better than private insurance premiums which may be post-income tax (at least partly).

the problem with medicare is not that it's inefficient. the problem is that your tax payment is not an insurance premium, as it is used to cover current benefits. so everyone who pays into medicare is not actually insuring themselves.

running a national insurer like medicare would be very good if it were run as actual insurance.

My point is that the $100 in tax does not translate into a $100 premium payment. Given a private health account, $100 in tax would result in around $250 premium payment at a meager but completely safe 2% yield in a private account by the time I retire. Thats a large part of the problem as well, that $100 taxed now is spent immediately (after the government gauntlet), rather than $100 being invested over 40 years and then spent.

And again I ask, why run a national insurer when there are a host of private insurers that can compete?

[cdxx]

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My point is that the $100 in tax does not translate into a $100 premium payment. Given a private health account, $100 in tax would result in around $250 premium payment at a meager but completely safe 2% yield in a private account by the time I retire. Thats a large part of the problem as well, that $100 taxed now is spent immediately (after the government gauntlet), rather than $100 being invested over 40 years and then spent.

And again I ask, why run a national insurer when there are a host of private insurers that can compete?

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you are describing a savings account, which is not what medicare provides. instituting such a system can work, but not instead of medicare. you have 40 years to build up the account, but what about people who only have 5, 10, or even 15 years?

despite the common misconception, private insurers don't actually compete. it's a very closed market. the reason is that there's no plan available everywhere. it's separated by state, city, and even county. moreover, for many people the options are limited to what the employer chooses. many companies do not offer more than one as they are not required to. moreover, there's substantial cost associated with switching plans, because it requires employer participation. either the employer has to drop an insurer and add a new one, or the employer does not let employees switch plans more often than 6-12 months apart.

a national plan that anyone can use using their pretax dollars is a good idea, because then every insurer will have to beat that.

i am not defending medicare. i think it is failing. i think it requires reform. i think it should function as an insurer, not as a pension benefit. i also think that abolishing it is a horrible idea. you may think that paying taxes into is unfair to the young generation, and it is, but it would be infitely more unfair to those who are on medicare right now.

my point was that a tax system where it's going into a national insurer is not a great disadvantage to private insurance, even when you are talking purely in terms of efficiency.

We are lost somewhere in translation because I essentially don't disagree with that you wrote. There would obviously have to be a large degree of transition to assist the people who are currently retired or close to retirement. A national level private insurer, or simply removing certain restrictions to current private insurers, in order to foster competition which would drive down prices would certainly be the best route. The largest reason for skyrocketing prices is that doctors and hospitals have no incentives to control costs, since insurers simply pay the bills regardless. This would be greatly reformed with the national use of MSA's, though.

Anything government run that can otherwise be privately run in a market, however, will suffer from a great disadvantage in both pricing and efficiency.

I'm clearly not an expert but my overall point was that my gut reaction to solving a problem stems away from turning to a larger, more powerful government.