27 May 2011

My answer to "What would YOU do to ensure the survival of Medicare?"

A friend wrote in response to my strong condemnation of Ex-Pres. Clinton's conspiratorial comments to Paul Ryan caught on tape (here), said:
Clinton warned against the Dems thinking the current arrangement is sustainable. 
What are the options for Medicare in the decades of the teens and twenties? Make no changes at all?
[A recent personal medical situation] was very costly, not to me but mainly to Medicare. Cost controls on medical services seem impossible to enact. You can argue the wisdom of making changes, but the cold, hard, fiscal facts are hard to dispute. Medicare, alone, will require a huge percentage of the federal budget in the 2020's when most of you baby boomers are collecting benefits.   There is a fear of a generational fight when Gen X and Gen Y and Gen Zero discover that the oldsters are getting the lion's share of federal largesse and the youger people are left with almost nothing for medical coverage after 2040. 
May I ask, how would you fund Medicare for the years after your 65th birthday? Keeping it as it is is not a viable option.
This was my response:

You and I obviously see things very differently, on fiscal issues in general. Which is fine; discussion of issues and working towards some kind of common ground, even on the level of citizen exchanges of ideas, is how democracy works. So, since you've invited some discussion, I'll try to explain how I see it.

All the countries in Western Europe, even countries like the Czech Republic, plus South Korea, Japan and Taiwan... in other words the 1st World... provide a public health care system at levels of comprehensiveness (although not necessarily exactly what is covered)... far better than Medicare here, for all their citizens. (Read T. R. Reid's Sick Around the World if you don't believe that). Frankly, the concept that controlling medical costs is "impossible to enact," to me, is just an unwarranted acceptance in advance of inevitable political defeat. I just can't accept the concept that America is no longer a 1st World Country, which is what that would entail, as far as I'm concerned. I and people who think like me want to make clear to the pols that eviscerating decent medical care for seniors is going to be 'impossible to enact,' because we will fight to defeat anyone who thinks they can do it, of either party. And we intend to win. We have no intention of giving up without a fight, and a very bruising fight, if need be. So many people are affected by, in particular, Social Security and Medicare, that I think progressive Democrats have a real chance to change the whole direction of political movement in this country. I repeat: we intend to win.

(Social Security is a whole other issue, where there is even less rationale for cuts, but let's leave that be for the moment).

Democrats in politics need to get this and stand for keeping Medicare as a public system which provides an acceptable public single payer insurance system, at least for seniors. I would like to see Medicare, as it evolves, become the template for a universal health care system. This was President Johnson's original intention, and is why the Democratic leaders in the 1960s chose the name Medicare, which they borrowed from Canada's then relatively new universal health care system. They intended to phase in, after 1968, a Medicare for All system. This is historical fact, though not widely discussed. Nixon actually proposed a universal health care system in 1974 which would have been far better than what we got in 2009, but the Democrats in Congress rejected it because they thought they could do better. This was the era of Watergate, after all. As it turns out, that was obviously a historic blunder.

Back to Medicare for seniors. Looking at where we are now, are changes needed? Of course, and those changes can and should be integrated with changes in the for-profit insurance reimbursement system that were just begun under Health Care Reform. I reject the notion that current Republican-thinking-dominated politics are unchangeable or that the rightist agenda that has been in the ascendancy in this country since 1980 (mostly) is the inevitable and unchanging "way things are" forever. This (Republican votes to kill Medicare), in fact, could be the very issue that enables, perhaps over two election cycles, the election of strong Democratic majorities. Killing Medicare is really, really unpopular, even among Republicans in the electorate, but Republicans in both houses are now on record by vast majorities of voting for it. Democrats need to seize on this, hammer on it over and over, and use it to defeat Republicans wherever possible. If they instead say, oh, yes, we do have to make some cuts, let's just be reasonable, they'll lose this advantage, and the Republicans will seize it. They're very, very good at that. Politics is strategy, and they're a lot better at it than we are, but that can change. Which is not to say that Democrats can't do things to make Medicare work better for less. Such as requiring negotiated pricing for drugs, creating a strong enforcement system for fraud, and creating the beginnings of a systematic cost containment system.

If the public, led by smart politics, makes clear that it wants the medical costs problem, and the problem of 48 million uninsured Americans, and the problem of out of control Medicare costs, solved, and not for the benefit of Big Pharma or for the For-Profit Health Insurance or for For-Profit Health Provider industries, it most certainly can be done. To just conclude that it cannot, and accept the general tenor of the Republican plan to destroy Medicare, is defeatism. We have risen to greater challenges many times in our history.

The reality, proven by careful studies by people like tax expert David Cay Johnston, is that the present overall medical system in the United States is costing far more than it should, and not just Medicare. He calculated that adoption of a single payer system with cost controls comparable to what are in place in France and Germany (and even Switzerland, which had one of the most American-like systems in Europe until recently), would virtually eliminate the deficit over time, by itself. In truth, this probably means that the medical profit system that has grown up in America, like a many-headed Hydra, has to go. But it should never have been allowed to develop in the first place, and represents an inherent conflict of interest. So, yes, of course, it's going to be hard to make these changes. But that's where leadership comes in: honest, unbought political leaders have to get the message across that we just can't afford to spend 17% of our GDP on medicine, but that medicine is not a luxury; it's something we as a nation need to ensure for our people, as the birthright of the citizens of an advanced civilized nation. We should not accept less. I believe if framed right this could indeed be a winning political issue in the not-too-distant future.

Also, in terms of how to pay for it, I imagine you would agree that at least for incomes over some level the Bush tax cuts have got to go. Doing that now, (with a cutoff of ~$125,000) would remove nearly 1/3 of the projected debt by 2019 all by itself. We do not have a spending problem, primarily, in this country (where we do is primarily in overseas military expenditures and unwarranted subsidy programs). We have
revenue and efficiency problems. (We also have to restore production and good American jobs to rebuild a revenue base, but again, that's a whole other issue; although, of course, everything is interconnected).

The idea that America needs to rein in spending on essential programs, shrink its commitment to its people, reduce its standards, accept the disappearance of the middle class and a production economy (a whole other issue, obviously)...I and progressives like me reject out of hand. We intend to continue plugging away at reform of our politics and economy to make our nation more functional for its people, not for elite corporate and wealthy interests. This is the essential progressive ethos. You don't read this in Time, the Washington Post, or the Economist, because the establishment media in America (and to some extent in Britain as well), is deeply beholden to the current finance-dominated political/economic regime, and profoundly biased towards a sort of permanent Thatcher-Reagan economic paradigm. But, just as these paradigms have changed before, they can be forced to change again. The repercussions of the economic meltdown have not yet run their course. I would have liked to have seen the Obama administration adopt a much more aggressive stance, but the fact is that the economy of the U.S. was profoundly changed, long term, and not to the advantage of the middle class. The electorate is angry, and will remain so until things change. That anger, properly channeled, can fuel a political sea change, and I don't believe this has yet played out.

To answer your specific question about how I would fund Medicare when I reach 65, which is only 7 years from now: Medicare then will probably be much as it is now. But you're essentially asking me what I would do, to ensure the survival of a viable medical insurance program for seniors going forward. I would, by 2018, when I will turn 65, have started the phase-in of Single Payer for All, with strongly regulated cost controls, which will also begin to bring down Medicare costs. I would eliminate Medicare Advantage overpayments... any private plan that wants to take what Medicare pays could operate, but nothing over what Medicare would otherwise pay (this was a Republican idea that was supposed to save money, but it didn't, of course, and has cost a bundle). (As in Britain, the rich can become "private patients" if that's what they want; what we're talking about here is what the commonweal will provide). And, although no one likes to talk about it, that does indeed mean some level of rationing will be inevitable. There will be rationing one way or the other: the question is whether rationing will be on the basis of ability to pay or on the basis of consensus view of medical necessity.

To pay for this and other essentials, in an ideal policy world, I would eliminate the Bush tax cuts completely, and impose new, substantially higher taxes on the highest income levels (including extremely high taxes on incomes over $1 million and elimination of the low taxes on capital gains above a certain income level (in other words, go part way to restoring the kind of tax system we had before the late 70s). I would impose a modest transaction tax on financial transactions. I would impose higher taxes on oil importation, and require cars sold in America to use less gasoline (a revenue measure as well as an environmental and national security one). Also, I would favor elimination of many deductions, such as the mortgage deduction above a certain level or on more than one property. I would eliminate oil and agribusiness subsidies and enact laws to prevent the offshoring of corporate profits to evade taxes in the United States. I would eliminate income caps on FICA and Medicare taxes.

With these combinations of cost constraints and, call 'em what they are, tax increases, we can easily afford a decent public health system for seniors, and a lot of other things. But even some combination of some of these changes, and not necessarily as early as 2018, would make Medicare viable for a good long while.

So there you have it. That's how I would ensure a decent public health system for seniors (at least), and I truly believe that we, as responsible citizens, owe it to the future generations to fight for nothing less. 


And now we read where McConnell is threatening to hold the entire economic security of the nation hostage by refusing to vote to raise the debt limit, unless a Republican plan to cut Medicare is adopted. If actually allowed to occur, most analysts agree, allowing the U.S. to default on its debt obligations for the first time in history would likely result in worldwide economic collapse. Terrific.

Right off a cliff. I say again, this issue has the potential to be a major turning point. Even if they succeed in the short term, we will use this against them, and hammer it home. They voted to kill Medicare. They voted to risk the economic security of our country, and the value of the savings of every working person in this country, to force their own way against overwhelming popular opinion. 

Dems: get some spine. Call their bluff. 

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