Posted on 03/02/2017 8:59:36 PM PST by TBP
The United States is going to become another Greece, and it’s largely because of poorly designed entitlement programs. As the old saying goes, demography is destiny.
Let’s look at just one piece of that puzzle. James Capretta of the American Enterprise Institute has a very sobering summary of how Medicaid has metastasized into one of the largest and fastest-growing entitlement programs.
You should read the entire article, but if you’re pressed for time, I’m going to share two grim charts that tell you what you need to know.
Medicaid Spending
First, we have a look at how the burden of Medicaid spending, measured as a share of national output, has increased over time.
What makes this chart particularly depressing is that Medicaid was never supposed to become a massive entitlement program.
It was basically created so the crowd in Washington could buy a few votes. Yet the moment politicians decided that the federal government had a role in subsidizing health care for the indigent, it was just a matter of time before the program was expanded to new groups of potential voters.
And every time the program was expanded, that increased the burden of spending and further undermined market forces in the health sector.
This is why entitlement programs are so injurious to a nation.
Cultural Effect
But Medicaid isn’t just a problem because of its adverse fiscal and economic impact.
The program also is exacerbating the redistribution culture in the United States as more and more people get trapped in the web of dependency.
Which brings us to our second chart from Capretta’s article. Here’s a look at the share of the population being subsidized by Medicaid.
As a fiscal wonk, I realize I should care more about the budget numbers, but I actually find this second graph more depressing. In my lifetime, we’ve gone from a nation where the federal government had no role in the provision of low-income healthcare, and now nearly one out of every five Americans is on the federal teat.
Even though we’re far richer than we were in the mid-1960s when the program was created, which presumably should have meant less supposed need for federal subsidies.
For further background on the issue, here’s a video I narrated for the Center for Freedom and Prosperity.
I urge you to pay close attention to the discussion that starts at 1:48. I explain that programs with both federal and state spending create perverse incentives for even more spending. This is mostly because politicians in either Washington or state capitals can expand eligibility and take full credit for new handouts while only being responsible for a portion of the costs. But it also happens because the federal match gives states big incentives to manipulate the system to get more transfers.
P.S. All of which explains why I think Medicaid reform should be the first priority when looking at how to fix the entitlements mess, even before Medicare reform and Social Security reform.
P.P.S. I’m not overflowing with optimism that Trump will tackle the issue, but there is a feasible scenario for him fixing the program.
P.P.P.S. Regardless, one would hope all politicians would agree that it’s time to tackle rampant Medicaid fraud.
The problem is most people still believe in the free lunch. They really think government should pay for whatever it is they want and need. Socialism always fails, but the lure of having somebody else pay your bills is too great to resist.
“Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.” ~ Bastiat
Let’s face it:
Obamacare is unaffordable and for most people, Medicaid is the only health plan that will keep their heads above water.
What good is health insurance when its fake health insurance?
I rest my case.
“The United States is going to become another Greece, and it’s largely because of” legal plunder.
Socialism Is Legal Plunder - “The Law”; Frederic Bastiat.
DEFUND(ACA)/DISMANTLE(ACA)/DESTROY (as necessary) socialist collectives, foreign and domestic.
It’s easy to...
live - free - republic.
The USA has a big advantage - the US Dollar is still the world's reserve currency and world trade in oil and many commodities is made in dollars. It means everybody must use Dollars, and hold them. So unlike Greece and Venezuela, our government and central bank can create huge amounts of debt, and monetize it with electronic money, and it flows out to the world. Its kind of like a tax the whole world has to pay to the USA.
Like the Romans, the expensive and vast military/intelligence apparatus maintains the global structure, and the USA's dominance of the global structure helps keep us on top and competitors at bay, which in turns means our currency remains the world reserve currency.
yes, you do have to pick your way thru the system, and you may not get the doc you want...
but pills...tests...therapies....all paid for...well, somebody's is paying...
Free Lunch? Where’s my Free Breakfast? Kobe Steak Dinner?
All you have to do is vote for the right politicians, and they will be happy to declare that you have a right to a free steak dinner and promise that they will see to it that you get it.
Of course, you will end up with Hamburger Helper and the politicians will get the steak.
An obesity epidemic and a lot of po’ fatties that have $$ for tattoos.
How long do you think the rest of the world will continue subsidizing American socialism? How long can they afford to -- while maintaining their own socialism?
It’s all based on an assumption that the best way to have a healthy population is unrestricted access to medical treatment. That’s not sustainable. The ideal should be a population that stays healthy and when health care is necessary, it’s minimal.
When you give out something that is free it is now an “entitlement and a human right” and you can never take it back
What very few know about medicaid is it’s basically a reverse mortgage on the patients entire estate. As soon as the patient dies, medicaid moves in to recoup the entire estate up to the amount owed/used.
Actually, at least in NYS, that’s a myth. Which is why so many Medicaid recipients use the ER as a doctor’s office. The docs they want don’t take Medicaid patients. There may be a long wait for appointments. They can’t gdt the tests they want. And the easiest way for a Medicaid patient to get opioids is though an ER visit. Medicaid delivers poor quality healthcare for skyrocketing prices. NYS cost shares its Medicaid with its counties. And many of Upstate’s counties are going under trying to pay for it.
What Medicaid changed was the cultural and moral consensus that, if you paid less, you got less.
I was part of the last generation to train in a true county hospital - a hospital for the poor. The hospital did not send bills. In fact, nine years after Medicaid was enacted, there was still no billing department. There were (relatively speaking) tons of Medicaid cash to be gotten, and no one knew how to get it.
The hospital and its employees, interns and residents included, was a line item in the city budget. There was X amount to spend by December 31, and when it was gone, it was gone. We had no GI endoscopy for GI bleeders because our one scope was broken and Olympus wouldn’t fix it for free.
This is all gone now. Medicaid pays about $0.17 per dollar of cost, the other patients pay the remaining $0.83 plus their own charges, but G-d help you if a Medicaid or no-pay patient doesn’t get EXACTLY what a paying patient gets - you have committed multiple Federal felonies AND medical malpractice to boot.
So, yes, hospitals and other providers are at war with their states and Congress to get more out of Medicaid, because they have to deliver more.
Bottom line is, if people who pay $0.17/$!.00 of cost, or who pay nothing, are to get the same package of services that people who pay for their care get, by law and by custom, then the system is going to be nationalized or it is going to collapse.
Which do you prefer?
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