The Daily Whim

The Daily Whim

Thu. May 26, 2011

Medicare: Last Hired, First Fired

Kevin Drum asks “Why Not Let the Dead Pay for Medicare?” The plan he suggests would set Republicans to screaming “death tax!”

But if the idea is to offer a way to cut Medicare costs without going to the extreme of Paul Ryan’s plan to end Medicare as we know it, well, I can play, too (note, Ryan’s plan died in the Senate)

In tough times, businesses have to make tough decisions about cutbacks. And if it comes time to layoff some employees, the general rule often followed is “last hired, first fired.”

So, what was the last change made to Medicare that increased its overall costs? Medicare Part D, the prescription drug plan passed without any offsetting budget cuts or revenue increases. It was sold to us as a plan that might cost about $400 billion over ten years, but it turns out that’s about half the actual cost (“Projected net expenditures from 2009 through 2018 are estimated to be $727.3 billion”).

Three quarters of a trillion dollars spent on a program that was never paid for in any way. Just added onto the deficit.

Of course, that law was passed by a Republican Congress and signed by a Republican president … with no funding whatsoever! Today, it is suggested that we can’t even provide emergency funds for tornado victims because, well, you’ve got to make more budget cuts to pay for that!

And let’s remember just how Medicare Part D was passed: “A 15-minute vote was scheduled, and at the end of 15 minutes, the Democrats had won. The Republican leadership froze the clock for three hours while they desperately whipped defectors. This had never been done before.”

So let’s remove the last unfunded mandate associated with Medicare, and see if that, associated with other changes included in the Affordable Care Act, can save Medicare as we know it, before we end it as we know it.

Peanut Gallery

1  larry p wrote:

The thing I don’t understand in all this is why Medicare is even on the table. Sure, Medicare, as currently constituted, will cause some deficit problems at some ill-defined time in the future, perhaps 10 or 20 years. But the current deficit has absolutely nothing to do with Medicare (or Social Security for that matter). We should be fixing the current causes first, and worry about the future ones once the current causes are resolved. Of course, no one but a few weird hippie types, like me, want to resolve the current cause, which is the Regan/Bush unfunded defense/war expenditures.

2  Reid wrote:

Why is it on the table? The majority of the budget is contained in three items: social security, medicare/medicaid, and defense. If you are serious about balancing the budget, those are the areas you have to address. Social Security, as I understand it, is solvent and unlikely to run into trouble over the next 15 years or so. It’s not a cause or symptom of our current woes.

But health care costs are rapidly rising, every year, for everyone. And if we’re going to keep Medicare “as is” rather than convert to the Ryan Voucher system, we’ve got to moderate the cost increases, or offset them with cuts/revenue increases. Cutting 3/4 of a trillion dollars in an unfunded program seems a fair and/or reasonable way to do that.

But defense cuts are going to have to happen as well. Structural cuts in manpower, and therefore, deployments. Europe, Japan, and Korea have strong economies that may have put a touch more into their own defense, so that we might greatly reduce our deployments in those areas.

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