by Cato 8/22/14
Consider this graphic closely. Facts are stubborn things for conservatives as well as progressives.
Not what you expected, is it? Non-entitlement spending of all kinds, as a percentage of the US economy, has been dropping steadily since 20010. This is the result of the budget collision resulting in the ‘sequester’ a few years ago. Essentially all of our runaway spending is now located in Medicaid, Medicare and Social Security, the last including rapidly expanding disability roles. And the vast majority of this runaway spending is in Medicare.
Now consider this blurb from a longer post here, a rant referring to senior entitlement rights being on the “chopping block”.
“Under Obama’s budget plan, beginning in 2017, new Medicare beneficiaries who purchase more generous Medi-gap plans would face a surcharge of approximately 15% of the average Medi-gap premium. Many Republicans support this idea and House Budget Chairman Ryan argues that Medi-gap premiums could be overhauled to “encourage efficiency and reduce costs.”
Now consider this affronted comment about that blurb from SS, a very good friend of long standing.
“If I am willing to pay for a more expensive (100%) supplemental Medicare policy, why should I be penalized for it?” SS
Here’s my response to SS. Those of you who deeply believe you have a right to all the over-promised entitlements we’ve lavishly voted ourselves in the last 40 years but have refused to fully pay for are not going to like this at all. Fair warning given.
In August 2012 I wrote a series called “If I Were King” … a series in which I detail a radical plan to balance the federal budget … which included a fix for the deep problem of Medicare. I said in that post that I’d reduce the basic Medicare coverage from 80% to 65% of cost, and limit Medi-gap policies to 20% of cost. I would require the remaining 15% of cost to be paid out of pocket for every medical procedure, up to and including “the final year” costs and hospice. I had written previously, in October 2011 (“Limits“), that I thought Medicare and Medicaid eventually would be merged into a seamless means-tested system, so that if one had no money to cover that 15% the care would be delivered, but under Medicaid, not Medicare.
The 15% in the current Ryan-Murray plan, the 15% in Obama’s 2014 budget, and the 15% in my proposal from almost two years ago arises from the same source. People with 100% coverage, no matter how that total coverage is acquired, tend to access medical care more frequently and for lesser, often trivial, issues. It’s the difference between the way we approach an all-you-can-eat fixed price buffet and an ala carte menu at a restaurant. We will eat more at the buffet to “get our money’s worth”. We are far more price conscious in the ala carte restaurant.
Once we’ve paid the Medicare premium through our Social Security check, and paid the 100% coverage Medi-gap premium, we approach medical care as an all-you-can-eat proposition, because there is little or no additional cost to each additional medical contact. The 15% cash out of pocket in my post, and the 15% Medi-gap surcharge (which is a far less effective method in my view) are intended to reduce the marginal demand for medical services by imputing a direct cost to each individual for each demand.
100% coverage = buffet mentality. SS’s willingness to pay for 100% coverage is not the deep problem. “Skin in the game” = price awareness and a much needed personal restraint regarding trivial medical issues, that is the deep problem. Unrestrained demand is the deep problem.
The Loud Left wants access reduced by bureaucratic review and approval. Individual restraint induced by an irreducible 15% cash out of pocket and seamlessly merging Medicare and Medicaid is a better idea.
The Medicare system is essentially on a death march. 5 years from now you will see demand for services rejected; arbitrary rejection of bureaucratically-determined trivial and unnecessary medicine … and some non-trivial and necessary medicine as well, since bureaucrats are stupid beasts. 10 years from now you will see the system implode completely. That or a system that results in individual self-restraint. Choose your poison.
And if you want a broader view of entitlements, read my blog series “Phoenix World” … a series detailing the rebirth of the US and radical overhaul of 80 years of progressivism. Therein I cover the other half of the evolution of Medicare and of all entitlements for that matter: means-testing for net worth that pushes the cost of all entitlements directly back onto the positive net worth recipient.
This system does not tax Peter’s wealth to pay Paul’s bills. It requires that Peter use his wealth to cover Peter’s entitlements to the extent Peter is able, focusing available money on Paul’s legitimate needs. Essentially all of the over-promised entitlements Peter is due will be paid to him, but with this new approach to means-testing there will be no guarantee Peter will get to keep them.
I recently finished delivering a four week course at Collin College on Phoenix World in which I built the core of my thinking on a phrase I coined:
“the social morality of individual responsibility”
I argued that the ultimate social immorality is unnecessary dependence on the commons, on the state. Social Security and Medicare, for ‘the rich’, are unnecessary. And in this idea lies the seeds of a conservative revolution. Those who can be must be individually responsible. Starting today. Ending never.
Think about the implications of that phrase a bit, in light of the wealthy being means-tested for all of their personal entitlements … in light of the idea that the next few generations WILL NOT submit to becoming entitlement slaves to pay for the over-promises we’ve voted ourselves in the last 40 years, the cost of which we’ve refused to cover by taxing ourselves, the cost of which we’ve shoved forward upon the next few generations … and it’s true meaning, and the politics we need to embrace today, and the nature of Phoenix World as well, becomes clear.
Cato blogs at Cato’s Domain.
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