National Journal online reports: “According to the Congressional Budget Office, which released its new Budget and Economic Outlook report [last week], a 10-year repeal of the growth-rate formula that froze doctors’ rates [for Medicare reimbursement] at current levels would cost $316 billion, compared with $290 billion when CBO last calculated the rate in November. The […]

The Grand Illusion of Medicare

by | Feb 4, 2012 | medicare, POLITICS

National Journal online reports: “According to the Congressional Budget Office, which released its new Budget and Economic Outlook report [last week], a 10-year repeal of the growth-rate formula that froze doctors’

rates [for Medicare reimbursement] at current levels would cost $316 billion, compared with $290 billion when CBO last calculated the rate in November. The difference may make permanent repeal of the formula — always a long shot — even less palatable to lawmakers. But even with the doc fix on hold, the report projects that spending on health care programs will explode in the coming decade. Assuming that doctors get the [27 percent] pay cut that Congress typically erases, Medicare gross spending is still expected to grow by 90 percent by 2022. The report cites the program’s growth, as more Baby Boomers retire.”

People keep telling me, “Medicare is a popular program. How do you tell people that Medicare is a problem? People like it.”

Well, of course they like it. It provides the illusion of a guarantee.

But it’s still an illusion.

Medicare is a fiscally unsustainable program. The only way it ever could be sustainable would be for money to start growing on trees — in literally infinite amounts.

Think about what these numbers mean. IF doctors get a 27 percent pay cut next month, Medicare will still grow by 90 percent in the next ten years. Keep in mind that these CBO estimates are usually way understated in the billions or trillions.

So what has to happen? A 50 percent pay cut for doctors? Or maybe 100 percent? How is Medicare to survive in this state of surreal bankruptcy?

As I’ve often said, Medicare, to sustain itself, is going to eventually require a 100 percent tax rate on everyone — rich, poor and anyone who works. And this is just for Medicare. What about Social Security, foreign aid, corporate subsidies and bailouts, farm subsidies … not to mention defense? What about the EPA and the federal Department of Education? What about the FDA, the DEA, the FBI and everything else that comprises the federal government? And don’t forget the forthcoming ObamaCare. How are all these programs and agencies to survive when we reach the point, as we eventually will, where Medicare alone is going to command 100 percent of all income produced in the United States? How much debt can we pile up before the fiscal credibility of the United States completely implodes?

The notion of guaranteed medical care is literally a bottomless pit.

Sure, Medicare is popular as long as the pit is perceived as bottomless — or so long as people can evade that there’s even a pit involved at all. But facts, as it has been said, are stubborn things. They go on being true no matter how long people delude themselves.

National Journal online goes on to report: “Medicaid spending is also due to grow — more than doubling in the same period [i.e. to 2022].

That program’s growth is the result of the 2010 health care reform law [ObamaCare], which will expand program eligibility beginning in 2014 …

To put the $26 billion doc fix increase into perspective, lawmakers are struggling to find just $21 billion to cover the cost of a one-year freeze in conference-committee negotiations. Medicare doctors will get a 27 percent pay cut if the lawmakers don’t reach an agreement before March 1.”

In practice, this means that all doctors and hospitals who accept Medicare — the vast majority — are facing a 27 percent pay cut effective the first of next month. No, it might not happen, but the last Band Aid only lasted for two months. Will the next Band Aid extension go for two days? Or two weeks? And if doctors don’t get this unthinkable pay cut, what happens to Medicare’s cost explosion then?

Imagine a private health insurance company that operated this way. The moral condemnation and the legal ramifications would be swift and decisive. Medicare is subject to neither, and actually (by common perception as well as scientific polling) remains a remarkably popular program.

It’s amazing to me how socialism, in the abstract, doesn’t hold much sway with about 70 percent of the American population. Yet a program which affects everyone based on the economic and moral premises of socialism is something no politician dares criticize — otherwise, he’s toast.

This is the best proof I know of that the biggest problem facing America is Americans themselves. Politicians who evade and double talk on the subject of Medicare (as well as other entitlements such as Medicaid and Social Security) are simply mirroring back the evasion, ignorance and willful stupidity of the American people themselves. Not all of them, but most of them. That’s why we have President Obama. That’s why we might get him for a second term. And that’s why nobody who might replace him looks any better, not on this subject.

Grow up, America. Time is running out.

Dr. Michael Hurd is a psychotherapist, columnist and author of "Bad Therapy, Good Therapy (And How to Tell the Difference)" and "Grow Up America!" Visit his website at: www.DrHurd.com.

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