Note: Federal, state and local governments spent a total of $783.8 billion on health care in
2006.*
Social Security and Medicare Are
Unsustainable. In 2011, the first group of baby boomers in the United States will reach the age
of 65. When the last of that generation retires in 2032, 77 million of them will have ceased working
and paying taxes and will have at least begun receiving taxpayer-funded health care and pension benefits.
A similar trend is occurring throughout the developed world. In Japan, Europe, and North America, the
number of retirees will double over the next 25 years while the number of taxpayers will grow only
10 percent. The economic consequences of these changes are dire: higher taxes, slower growth,
and lower living standards.
Tax Hikes Could Pay for $36 Trillion
in Medicare Costs, Dems Say. Sens. Jay Rockefeller (D-W.Va.) and Barbara Boxer (D-Calif.) told
Cybercast News Service on Tuesday [7/8/2008] that they would support raising taxes to pay the $36.3 trillion
needed to pay for promised Medicare benefits over the next 75 years.
We Can't Tax
Our Way Out of the Entitlement Crisis. The spending shortfalls in Social Security and Medicare
are large. According to the Congressional Budget Office, Social Security and Medicare spending left
unchecked would, after a generation, consume about 10 percentage points more of GDP than it does today.
Congress Must Pull the Trigger
to Contain Medicare Spending. For years, official Washington has studiously ignored
the warnings of prominent liberal and conservative analysts, as well as the Government Accountability
Office, about the entitlement crisis, particularly the exploding costs of the Medicare program.
As a result, the crisis has deepened, piling up future debt and threatening huge tax increases on
younger workers. … Medicare already has unfunded costs of $34 trillion over the next 75 years
(in net present value terms).
Rethinking Social Insurance:
The single greatest threat to the fiscal health of the United States is the runaway growth of the nation's
major retirement and health care entitlement programs. Social Security and Medicare are projected to
grow from 7.5 percent of GDP today to almost 13 percent of GDP by 2030. Already, the two
programs consume over a third of the federal budget.
The Entitlement
Mess. Congress is spending us into a hole. We hear about the cost of earmarks and the Iraq
war. But what about "entitlements"? That's the government's ironic term for programs that transfer
money from people who earned it to people who didn't. Entitlement? How can you be entitled to
someone else's money? To finance "entitlement" programs, the government threatens force against the
taxpayers who provide the money.
New warnings about entitlements shortfall.
Trustees for the government's two biggest benefit programs warned Tuesday [3/25/2008] that Social Security and
Medicare are facing "enormous challenges," with the threat to Medicare's solvency far more severe. The
trustees, issuing a once-a-year analysis, said the resources in the Social Security trust fund will be depleted
by 2041. The reserves in the Medicare trust fund that pays hospital benefits were projected to be wiped
out by 2019.
Looming
Entitlement Tsunami Threatens America's Health Care Freedom. A quarter of health spending in the
United States, about $420 billion this year, is by the Medicare program established by the government in
1965 to ensure people 65 years old and older have access to health care. Medicare is an entitlement
covering 44 million older Americans (or 14 percent of all Americans) and pays hospitals, doctors,
suppliers, drug plans, and a variety of other providers. Medicare is financed by a mix of premium payments
by beneficiaries, payments directly from federal revenues, and a payroll tax on workers and employers.
Liberal Pyromaniacs:
Liberals behave like a pyromaniac who sets fire to his own house, then is angered because the rest of the family
try to salvage their possessions and escape from the blaze. Like the pyromaniac, liberals feed the destructive
flames of inflation with deficit spending on new welfare programs and the mandated monsters, Social Security and
Medicare. Then they become indignant when rational investors take steps to hedge against liberal-created
inflation.
Adding Passengers to the Titanic.
According to the 2006 report of the Medicare Trustees, the unfunded liability in Medicare over the next
75 years is $11 trillion. This is the gap between the promises that the system makes to
future beneficiaries and the taxes that will be collected under current law to pay for those benefits.
Medicare is the fiscal equivalent of the Titanic, and its unfunded liability is the iceberg that lies
ahead. Proposals to increase government's role in funding health care amount to adding passengers
to the Titanic.
Medicare: The
Monster at Our Door. Unless you're a news junkie, you probably missed Mark McClellan's announcement
that he'll resign in early October, after two grueling years as head of CMS. What's CMS? Well, it's
the Centers for Medicare and Medicaid Services, which spent $515 billion in 2005 — 21 percent
of the federal budget and about $21 billion more than all defense spending.
The Medicare Mess is Guaranteed to
Grow. The real problem is that this [Medicare drug] program eventually will replace existing
public and private spending for drugs with new taxpayer financing — at a time when entitlement
costs already are growing much more rapidly than the tax receipts that are supposed pay for them.
Take Our Money,
Please! Medicare's prescription-drug benefit — with its huge costs and labyrinthine
complexities — is already a notorious entitlement program, and it just began operating a couple of
weeks ago, on Jan. 1. Little wonder, then, that its sponsor and "partners" — the federal
government, insurance companies, drug retailers — have launched a slick ad campaign on its behalf.
Letting Medicare "Negotiate" Drug
Prices: Myths vs. Reality. In 2003, Congress and President Bush enacted the "Medicare
Prescription Drug, Improvement and Modernization Act," which established a prescription drug program for
Medicare. That legislation expressly prohibited Medicare from negotiating drug prices with pharmaceutical
companies. Rather, any negotiation that takes place is to be between pharmaceutical companies and the
insurance companies that administer the Medicare prescription drug program.
The Entitlement
Panic. Will America have to declare Chapter 11 because of $80 trillion in unfunded
entitlement promises of Medicare, Medicaid and Social Security? Economist Laurence Kotlikoff
believes the answer is perhaps yes unless we reform our fiscal institutions.
For Some, Medicare Drug Plan Pays
Off. When Lacey P. Green went to his neighborhood pharmacy to pick up five prescriptions, he
thought he heard the pharmacist say he owed $250, but he was wrong. The cost, with his new Medicare
prescription drug card, was just $50.
Bush
Opposes Delay in Medicare Drug Benefit. The administration's rejection of one of the
chief ideas from fiscal conservatives for covering the tab for Katrina marked another example of
how difficult it will be to spend billions of dollars for hurricane relief without increasing
the federal deficit.
Politicians on Drugs: When
[Illinois Congressman Rahm] Emanuel and [Gov. Rod] Blagojevich first proposed I-SaveRx in 2003, the Food
and Drug Administration warned such a program would be an illegal violation of the national ban on importing
prescription drugs. … The ban on importing prescription drugs wasn't something Republicans dreamed up
to punish the poor and senior citizens. It has been the law since 1987. That law was enforced for
eight years by none other than Bill Clinton, Rahm Emanuel's former boss.
Getting rid of
reckless spending. We are less than one generation away from Congress being unable to pay
for anything other than Medicare, Medicaid, Social Security, and interest on the federal
debt — leaving not so much as a penny for defense or homeland security.
Let's get
real about Social Security and Medicare. The Social Security and Medicare
trustees have just issued their annual report on the state of these programs, and the
picture is not pretty. The combined unfunded liability, the shortfall of projected
funds available to meet projected obligations, of the two programs is around
$75 trillion. For perspective, the Gross National Product
is $10 trillion.
Changing
values: The displacement of traditional values with the "do your own
thing" agenda puts perspective on the problems with which we're now wrestling on
Social Security and Medicare. The conventional explanation for today's
Social Security and Medicare problems is demographics. Our population
is "graying" as a result of longer lifespan and fewer babies.
How Big Is the Government's
Debt? As of 2001, the accumulated entitlement obligations owed
to all people (including all current workers) who have earned Social Security
and Medicare benefits is $12.9 trillion for Social Security and $16.9 trillion
for Medicare. When these obligations are combined with the debt held by the public,
the total burden equals $33.1 trillion, or 10 times the official debt measure. This
"total debt" is more than three times the size of the nation's total output in 2001, and amounts
to $116,381 for every man, woman and child in America.
How Will We Pay for Social Security
and Medicare?. Social Security and Medicare are making future promises much
greater than the taxes that will be collected at current rates. Unfortunately,
some policymakers seem to be intent on making the problem worse, not better. Reforms
are needed that create more saving today for retirement and increase the nation's
capital stock.
Reforming Medicare: In a few
years, as medical costs escalate and baby boomers retire, Medicare and Social Security will
place significant burdens on the federal budget. By 2030, about the midpoint of
the baby boomer retirement years, deficits in Social Security and Medicare will
require 37 percent of federal income taxes. This means that within three
decades the federal government will either have to eliminate more than one-third of
all the income-tax-funded services it currently provides or increase the income tax
burden by more than one-third.
Government Spending on the
Elderly: Social Security and Medicare. When today's 18-year-olds reach
retirement age, Social Security spending will equal 21.7 percent of
payroll — more than twice the current burden. When Medicare and
other elderly health programs are included, spending in 2050 will equal 54.4 percent
of taxable payroll. If this projection proves true, we have already pledged more
than half the incomes of future workers just to cover benefits for the elderly already
included under current law. This burden will be even greater if Congress tacks on
a new Medicare prescription drug benefit or a long-term care benefit.
Are Medicare and Social Security
really worth it? The 2004 Medicare and Social Security Trustees Reports
show that programs for the elderly are on an unsustainable course. The expenditures
exceed the revenues to be collected, and the funding gap is projected to grow through
time. Obligations to the elderly are more than six times the size of the economy and
18 times the size of the outstanding federal debt.
Thwart Hillarycare
2006. [Lately] there has been unrelenting negative press about the Medicare drug
benefit. The persistent whine of hysteria (to quote Joan Didion) goes something like
this: People are too confused, too scared, too ignorant to make the right choice
among a "bewildering" array of plans. And if you think making Medicare choices on your own is
scary, just try using health-savings accounts. In other words, there is agreement among mostly
liberal policymakers, journalists and advocacy types that people are too stupid to make complex
health-care decisions. (Except abortion.)
Howard Dean's Abortion
Contortions: A 1994-1995 AGI survey of abortion patients found that in states where Medicaid pays for
abortions, women covered by Medicaid have an abortion rate 3.9 times that of women who are not covered, while in
states that do not permit Medicaid funding for abortions, Medicaid recipients are only 1.6 times as likely as
nonrecipients to have abortions. A more recent study by Dr. Michael New of the University of Alabama found:
"State laws restricting the use of Medicaid funds in paying for abortions reduced the abortion rate by 29.66" abortions
per 1,000 women of childbearing age.
Another
commission? The second reason why Bush's call for an entitlement commission is laughable
is because he is largely responsible for the growing crisis of entitlement spending. That is because
he rammed a vast expansion of Medicare through a Republican Congress in 2003 that increased the unfunded
liability of that program by almost 40 percent. According to Medicare's trustees, the unfunded
liability of Medicare is $68.1 trillion. Of that, $18.2 trillion is accounted for just by
the new drug benefit.
Anatomy
of the Coming Collapse, and Solutions: The
Treasury Department takes a snapshot of Social Security and Medicare.
Medicare-for-all Plan
Headed for Congress: This is much more than an expansion of Medicare. It's
a Socialist manifesto. It's also a sure-fire recipe for disaster. It encourages unlimited
demand for health care services while severely limiting the ability of physicians to
provide them.
Medicaid: Waste, Fraud and
Abuse. A 2001 GAO report on Medicaid stated, "The magnitude of improper payments throughout
Medicaid is unknown. … An even more difficult portion of improper payments to identify are those
attributable to intentional fraud. … There are no reliable estimates of the extent of improper
payments throughout the Medicaid program."
Medicare's
muddled meddling. What if Medicare threw a really lavish party and nobody showed
up? Last week, as Medicare cheerleaders valiantly attempted to persuade, bribe or threaten
seniors to sign-up for one of dozens of different prescription drug plans, there were numerous
reports of people being so totally befuddled they might just take a pass.
Fraud and Waste
Infect New York Medicaid. The extent of Medicaid fraud in New York State
was highlighted in July by extensive news coverage in The New York Times and other
publications. A dentist operating out of a small Brooklyn storefront billed Medicaid
for 991 procedures in one day in 2003. Similarly, in a single day a school in Buffalo
received funds for referring 4,434 students to speech therapy — without actually
talking to them or reviewing their records. Over a period of about three years, a
physician prescribed $11.5 million worth of a synthetic hormone popular with
bodybuilders.
Medicaid-paid births on the rise.
Nearly half of all births in Wisconsin were paid for by the state's Medicaid program in 2005, rising 26% since
2000. In 2005, the most recent year for which figures are available, five of the top 10 hospitals that
delivered babies paid for by Medicaid were in Milwaukee.
Feeding the 800-Pound Gorilla:
Medicaid — the nation's program to reimburse hospitals and physicians for health care provided to
the poor — has become an 800-pound gorilla sitting on the back of state budgets. In 2004 it
consumed nearly a quarter of states' budgets, and its cost is expected to rise 12 percent this year.
State legislators are scrambling to find a way to slow the program's cost spiral. Reform measures include
cutting benefits and managing the use of expensive prescription drugs. While these options deserve attention,
they do not address the loophole in eligibility rules that is really draining money out of the system.
Medicare Prescription
Drug Benefit: What Difference Would It Make?. That
seniors lack access to prescription drugs is offered as a rationale for
supporting a new Medicare prescription drug benefit. If many of them do in fact
lack access, spending $400 billion in general tax revenues during the next 10 years for
the benefit would increase seniors' use of drugs. The questions then are: What fraction
of the Medicare population lacks prescription drug coverage, and how much more would they
spend if they had coverage?
The Bankruptcy of
Medicare: At the end of last year George W. Bush signed the Medicare Modernization
Act of 2003 into law in the name of "honoring the commitments of Medicare to all our seniors." The
bulk of the law provided prescription drug subsidies for the elderly, at an estimated cost of between
$400 billion and more than $1 trillion over the next decade. Less than four months
later, the Medicare's Board of Trustees issued a report citing Bush's subsidy as a major reason that
the program would go bankrupt by 2019, seven years earlier than the board predicted last year.
White
House Raises Prescription Drug Cost Estimate — Again. The
Bush administration on February 8 [2005] estimated that a new federal program to
provide prescription drug coverage to Medicare recipients would cost $724 billion
over the next 10 years.
Explaining the Growth of Medicare: Utilization of
medical care has risen dramatically since Medicare began in 1965. That year, health expenditures accounted
for 5.7 percent of the nation's output. By 2000, the size of the health care sector had risen to
13.2 percent. This dramatic rise has been hastened by Medicare's growth. In 1970, Medicare
accounted for 11 percent of all health care expenditures in the United States; but by 2000, its share
stood at 17 percent. As health care spending has grown faster than the economy as a whole, so
Medicare expenditures have grown even faster than health care expenditures in general.
Prescription Drugs for
Seniors: Despite its political popularity, Medicare violates almost all principles
of sound insurance. It pays too many small bills the elderly could easily afford
themselves, while leaving them exposed to thousands of dollars of potential
out-of-pocket expenses, including their drug costs. For instance, each
year about 750,000 Medicare beneficiaries spend more than $5,000 out-of-pocket.
We should not covet Canada's
prescription drugs. The primary value that we obtain from the higher prices we pay for our
prescription drugs is research and the development of new prescription drugs, which benefit not only us but
also people throughout the World. If it were not for the United States, we simply would not have new
prescription drugs and vaccines to combat diseases such as cancer, AIDS, and diabetes.
Greedy or
ignorant? Myth: Skyrocketing prescription drugs are driving health-care
spending up. Fact: According to the Bureau of Labor Statistics, as a whole, Americans
spend about 1 percent of their income on drugs. Seniors spend about 3 percent on
drugs, less than the amount they spend on entertainment. Spending on drugs, as a percent of
total health-care spending, was 10 percent in 1960. It's roughly the same today.
Compromising
Quality: The High Cost of Government Drug Purchasing. Recently
revised estimates of the projected cost of the new Medicare prescription drug benefit
have re-ignited congressional debate about the merits and design of the recently enacted
Medicare legislation. One particular argument that has received renewed attention,
both in and out of Congress, is the contention that the new drug benefit will be unnecessarily
costly because the legislation does not allow the government to use the "enormous market
clout" of 41 million Medicare beneficiaries to drive down the cost of drugs.
The FEHBP as a
Model for Medicare Reform: In deciding the future of Medicare, Congress must
choose between consumer choice or legislative and bureaucratic control of benefit design,
prices, and operational decisions. A successful example of the consumer choice model
already exists: The Federal Employees Health Benefits Program meets the health
care needs of 9 million federal employees, retirees, and family members,
and should be the model for Medicare reform.
Congress Approves Huge Expansion of
Medicare: Congress approved [06/27/2003] the biggest expansion of Medicare since its creation
nearly four decades ago. Seen as a political victory for President Bush and breaking six years of
political gridlock, the Senate and House passed competing legislation to provide prescription drug benefits to
elders and give private health plans a much larger role in the program.
Uh oh, Ted Kennedy loves the
Medicare bill. Republicans in Congress seem to have convinced themselves that they have to have
a drug subsidy bill to keep control. And the Bush administration has irresponsibly signaled that it will
sign any bill, no matter how bad.
Taxpayer Group Seeks to Save Feds $12.6
Million: The National Taxpayers Union requests that the Bush administration immediately terminate
the planned $12.6 million ad campaign on behalf of the forthcoming Medicare prescription drug benefit.
Short-Term Candy: The new
Medicare legislation does include a step toward greater freedom by allowing people to set aside money in
tax-free medical savings accounts. Good idea. But it also communizes the entire prescription
drug industry for seniors. Since we tend to get sick the most when we are older, the law pretty much
communizes the whole prescription drug industry. The cost will eventually be trillions.
Blimp is Right. The bureaucrats
probably didn't realize what they were doing when they shelled out $600,000 this year to send a Medicare blimp
touring around the country. I don't mean just the money. The blimp money is just part of the $30 million
that Medicare spends annually to let Medicare recipients know they're on Medicare.
Medicare fraud: Reforming our
way to bankruptcy. The essence of the Medicare bill is a reckless expansion of a program that was
bound for bankruptcy even before the Republicans decided to steal an issue from the Democrats by pushing a huge
new prescription drug entitlement. The official price tag for the law is $400 billion over
10 years, but it will ultimately cost far more.
Compassionate
tyranny: No thought is given to the American taxpayer, who is
looked upon as a magic purse that never runs out of gold. House Republicans
have been working through all-night sessions to burden the federal taxpayer
with $350 billion to subsidize prescription medicines for the elderly. These
open-ended commitments make no sense financially or in terms of health care.
The
Real Cost of the Medicare Modernization Act: There is more than
a $100 billion discrepancy in estimates for the cost of the new prescription
drug benefit.
Socialized Medicine at the Back Door:
For patients, single-payer means less care, and lower-quality care. After being assigned to
a physician (no, you can't choose), getting in to see that physician may not be easy — just ask
patients enrolled in Medicare or Medicaid.
Drugs and politics:
In the midst of a bipartisan stampede toward "prescription drug benefits for the elderly," someone needs to ask
the question: Why should seniors be singled out to be subsidized by the taxpayers, except that their votes
are being sought by both parties?
Washington spending going wild:
[President Bush] supported the prescription-drug plan — even if it was quite a bit richer than he proposed.
And he has pretty much set the agenda for Congress' spending — since the Democrat majority has not seen fit
to formulate an actual budget. It's just been runaway, ad hoc spending — something
for everyone.
Counting the Cost of Prescription Drug Price
Controls: Many politicians are calling for government price controls as a way to keep prescription
drugs affordable for senior citizens. But price controls in Canada and other countries where they have been
tried have only resulted in rationing and higher prices for life-saving drugs. A better solution is to
expand the use of tax-free Medical Savings Accounts so more seniors can pay for the drugs they need.
Reforming Medicaid: Medicaid
is enormously expensive. For the second year in a row, spending on Medicaid (for
the poor) will exceed spending on Medicare (for the elderly). At $280 billion
this year, Medicaid costs almost $1,000 for every man, woman and child in the
country — or $4,000 for a family of four. Indeed, it is likely that
many taxpayers are paying more in taxes to fund health insurance for the poor than they
pay for private health insurance for themselves and their own families.
Medicare Reform and Prescription
Drugs: Ten Principles. In an election-year rush to satisfy impatient
voters, politicians of both parties are endorsing ill-considered schemes to add a
prescription drug benefit to Medicare. While the problems with the program are
bad, most of the proposed solutions are worse. Medicare deserves thoughtful
reform — reform that can greatly reduce seniors' exposure to catastrophic
prescription drug costs, improve overall health care quality and control taxpayer costs.
Medicaid
in critical shape: Across the nation, state governments spend nearly
as much money on health insurance for the poor as they do on public schools — more
than on welfare, prisons and roads combined. And the tab keeps rising, fast.
Health Care is Not a Right. Our only
rights … are the rights to life, liberty, property, and the pursuit of happiness. That's all.
According to the Founding Fathers, we are not born with a right to a trip to Disneyland, or a meal at
Mcdonald's, or a kidney dialysis (nor with the 18th-century equivalent of these things). We have
certain specific rights — and only these. Why only these? Observe that all legitimate
rights have one thing in common: they are rights to action, not to rewards from other
people. The American rights impose no obligations on other people, merely the negative
obligation to leave you alone.
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