Trustees Report Warns Medicare Finances Worsening and Bernie Sanders is So Adamant in Medicare for All as the Answer to All Our Problems

 

22141171_1319583611504628_6195948361907076306_nPeter Sullivan reported that House Democratic Leader Nancy Pelosi(Calif.) said Thursday that “Medicare for All” proposals should be “evaluated” if Democrats win back the House this year, adding “it’s all on the table.”

Pelosi has long backed a public option for health insurance, but has not supported going further — as many Democrats want — and setting up government-run, universal health insurance.

The Democratic leader did not explicitly endorse the idea of Medicare for All during a press conference Wednesday, but she also did not rule out the proposal.

“I’ve always been for a public option so I’m always eager to talk about that,” Pelosi said when asked if Democrats would advance a public option or Medicare for All legislation if they win the House.

“Some of the other issues that have been proposed have to be evaluated in terms of the access that they give, the affordability of it and how we would pay for it, but again it’s all on the table,” she added.

Last year, Pelosi pushed back on the idea of Medicare for All, saying, “the comfort level with a broader base of the American people is not there yet.”

Medicare for All has been gaining traction among Democrats in recent years. The idea, championed by Sen. Bernie Sanders (I-Vt.), is now favored by many potential 2020 Democratic presidential contenders.

Many Democratic House candidates in battleground districts support the idea as well, which Republicans think will be a liability for them.

“When they come to Congress, any of those subjects can be on the table,” Pelosi said.

She defended the current Affordable Care Act as well.

“We believe in the Affordable Care Act, that it has the structure to take us forward in many different ways,” she said.

On CNN Thursday night, Chris Cuomo and Sen. Bernie Sanders (I-Vt.) spent a good 15 minutes talking health-care policy, but Cuomo started off with politics, noting that President Trump’s poll numbers are improving. “Don’t you think that President Trump deservedly gets credit for this strong economy, that it’s not just a byproduct of what’s going on globally?” Cuomo asked.

Sanders did not agree, saying Trump has to explain why Germany, Japan, Mexico, and the U.K. also have historically low unemployment. “Our economy is doing well in terms of unemployment,” he said. “But we are not doing well in terms of raising wages for working families,” and policy-wise, Trump “is going to war against working people. He is a tool of the wealthiest people in this country, and I think the American people understand that.”

Cuomo walked over to a whiteboard, saying he had done his homework and Sanders had to explain three things about his Medicare-for-all plan, starting with the idea that “socialized medicine,” and thus socialism, “smacks of the end of capitalism.” Sanders said Cuomo “is going to have to do some more homework,” pointing out that every other capitalist society has single-payer health care, and Americans love Medicare.

Cuomo noted that Americans hate change, and one in nine Americans works in healthcare, so Sanders’ plan endangers their jobs. “We will create more jobs under a rational Medicare-for-all system than currently exists,” Sanders replied. “There will be a transition, just in the same way, Chris, as we have to transform our energy system away from fossil fuel. We create more jobs, but there will be pain and you gotta deal with that pain.” “Right, but dealing with pain is not something that is done well in politics,” Cuomo noted, and they sparred about the political viability of raising taxes versus eliminating private health insurance costs — and also, more personally, family dynasties.

I couldn’t stand listening to Sanders anymore because he is such a Socialist and really doesn’t have a handle on the finances. Basically, he is an idiot and there are people who think that he has a good chance in the 2020 presidential election. Please, don’t let this man get any farther and put him in a retirement facility where he belongs.

Just read the predictions regarding the financial stability of Medicare.                       Ricardo Alonso-Zaldivar wrote that Medicare will run out of money sooner than expected, and Social Security’s financial problems can’t be ignored either, the government said Tuesday in a sobering checkup on programs vital to the middle class.

The report from program trustees says Medicare will become insolvent in 2026 — three years earlier than previously forecast. Its giant trust fund for inpatient care won’t be able to fully cover projected medical bills starting at that point.

The report says Social Security will become insolvent in 2034 — no change from the projection last year.

The warning serves as a reminder of major issues still languishing while Washington plunges deeper into partisan strife. Because of the deterioration in Medicare’s finances, officials said the Trump administration will be required by law to send Congress a plan next year to address the problems after the president’s budget is submitted.

Treasury Secretary Steven Mnuchin said in a statement that there’s time to fix the problems. “The programs remain secure,” Mnuchin said. Medicare “is on track to meet its obligations to beneficiaries well into the next decade.”

“However, certain long-term issues persist,” the statement added. “Lack-luster economic growth in previous years, coupled with an aging population, has contributed to the projected shortages for both Social Security and Medicare.”

Social Security recipients are likely to see a cost of living increase of about 2.4 percent next year, said government number crunchers that produced the report. That works out to about $31 a month.

At the same time, the monthly Medicare “Part B” premium for outpatient care paid by most beneficiaries is projected to rise by about $1.50, to $135.50.

Both the cost-of-living increase and the Medicare outpatient premium are not officially determined until later in the year, and the initial projections can change.

More than 62 million retirees, disabled workers, spouses and surviving children receive Social Security benefits. The average monthly payment is $1,294 for all beneficiaries. Medicare provides health insurance for about 60 million people, most of whom are age 65 or older.

Together the two programs have been credited with dramatically reducing poverty among older people and extending life expectancy for Americans. Financed with payroll taxes collected from workers and employers, Social Security and Medicare account for about 40 percent of government spending, excluding interest on the federal debt.

But demands on both programs are increasing as America ages.

Unless lawmakers act, both programs face the prospect of being unable to cover the full cost of promised benefits. With Social Security that could mean sharply reduced payments for retirees, many of whom are already on tight budgets. The report said the total annual cost of Social Security is projected to exceed total annual income in 2018 for the first time since the Reagan era, meaning the program will have to tap into reserves.

For Medicare, insolvency would mean that hospitals, nursing homes and other providers of medical care would be paid only part of their agreed-upon fees.

Medicare is widely seen as a more difficult problem that goes beyond the growing number of baby boomers retiring. It’s also the unpredictability of health care costs, which can be jolted by high-priced breakthrough cures, and which regularly outpace the overall rate of economic growth.

The Cabinet secretaries for Treasury, Health and Human Services, and Labor usually participate in the annual release of the report, along with the Social Security commissioner, and take questions from reporters. None of those top officials was present Tuesday; an aide cited scheduling conflicts.

The four top officials serve as the Social Security and Medicare trustees, along with two independent trustees who are supposed to represent the public. The public trustees are usually more candid, but those posts remain unfilled.

President Donald Trump campaigned on a promise not to cut Social Security or Medicare, but he hasn’t offered a blueprint for either program.

Democrats, meanwhile, want to extend the social safety net by spending more on health care and education. Advocates for the elderly said Tuesday there should be no cuts to Social Security benefits.

But federal deficits keep rising, and the recent Republican tax-cut bill is expected to add to the debt.

Last year’s tax law, which cut taxes on Social Security benefits, helped exacerbate the shortfall. So too did repeal of the individual mandate in so-called Obamacare, which promises to increase the number of people without health insurance and therefore Medicare payments for uncompensated medical care.

Higher deficits mean less maneuvering room for policymakers when the day of reckoning finally arrives for Social Security and Medicare.

In principle, the U.S. is supposed to be paying forward its Social Security and Medicare obligations by building up trust funds to cover future costs. That money is invested in special government securities, which also collect interest. But when the money is actually needed to pay for benefits, economists say a government deep in debt could be hard-pressed to make good.

Let’s get right to the point: Medicare is not going “broke” and recipients are in no danger of losing their benefits in 2026, but instead 2034. Now a more expanded breakdown of the problems.

Not broke, but not healthy                                                                                               However, that does not mean Medicare is healthy. Largely because of the inexorable aging of the Baby Boomers, program costs continue to grow. And, as the Trustee’s report forthrightly acknowledges, long-term costs could well increase even faster than the official predictions. The main risks: scheduled limits on payments to doctors and other providers may never be implemented and unknown future medical technologies are likely to increase all health costs, including for Medicare.

This will inevitably mean that either premium and/or taxes will rise; payments to doctors, hospitals, and other providers will grow more slowly; some benefits may be trimmed, or a combination of all three.

So what is the Trustee’s report, and what does it really say?

Hospital insurance                                                                                                                        The report is an annual exercise designed to review the health of the nation’s biggest health insurance program.  It looks in detail at each of Medicare’s pieces, including Part A inpatient hospital insurance; Part B coverage for outpatient hospital care, physician services, and the like; Part C Medicare Advantage plans; and Part D drug insurance.

Those “going broke” headlines are all about Part A Hospital Insurance (HI), which accounted for about 40 percent of the program’s $710 billion in spending in 2017. HI mostly is funded by the Medicare tax that is withheld from worker paychecks and paid by the self-employed.  And that tax—as well as other smaller sources of revenue– is not sufficient to pay the bills. It hasn’t been for years.

Because it anticipated the aging Boomers, Medicare built up a trust fund while its costs were relatively low. But that reserve is rapidly being drained, and, in 2026, will be out the money. That is the source of all those “going broke” headlines.

What will Congress do?

It doesn’t mean Medicare will stop paying hospital insurance benefits in eight years. We don’t know what Congress will do—though the answer is probably nothing until the last minute. Lawmakers could raise the payroll tax. But my bet is they’ll use general revenue to support the HI program, which is another way to say they’ll borrow the money and further raise the national debt.

Medicare Parts B and D are funded very differently, and are at no risk of “going broke.”  Unlike Part A, there is no dedicated tax for these programs. Rather, they are funded through a combination of enrollee premiums (which support only about one-quarter of their costs) and general revenues—another way of saying the government borrows most of the money it needs to pay for Medicare.

The coming political debate

As more Boomers age and health care prices increase, Medicare costs will continue to rise. Under the current system, that means premiums will continue to increase and so will government borrowing. The big political debate in coming years will be over how to divvy up those future costs. Will more of the burden fall on beneficiaries or will it fall on taxpayers at large who, eventually, will have to pay off the burgeoning government debt?

Because Medicare costs (like all health care costs) are rising faster than the overall economy is growing, the program will eat up more of the nation’s total economic output. And here is where the news really is scary.

Today, Medicare expenses are approaching about 4 percent of Gross Domestic Product. Under current law, the Trustees project it will increase to about 6 percent in two decades, then level off.

Unlikely assumptions                                                                                                                    But that forecast is built on several key assumptions that are unlikely to occur. In the 2010 Affordable Care Act, Congress adopted a package of cost-cutting measures. In 2015, in a law called the Medicare Access and CHIP Reauthorization Act (MACRA), it began to change the way Medicare pays physicians, shifting from a system that pays by volume to one that is intended to pay for quality. As part of the transition, MACRA increased payments to doctors until 2025.

But what if key ACA cost-cutting measures never take effect, the transition to the new physician payment system is delayed, and the temporary doctor payments continue indefinitely? In that case, the trustees forecast Medicare costs will not flatten out in the mid-2030s, and instead, keep rising—to 8 percent of GDP by 2070 and 9 percent of the entire economy by 2090.

That’s a long way away, you may say, and a lot can happen in the next 75 years. That’s true, but remember that whenever new medical technologies are adopted, overall health care costs tend to rise. So we face what the economists like to call an asymmetric risk: It is possible that future Medicare costs will grow more slowly than predicted, but it is more likely that they’ll be significantly higher than the trustees forecast.

The question is: What are we going to do about it?

Remember, this idea arose with Sen. Bernie Sanders (I-Vt.) during his 2016 campaign for president. Sanders knew that the term “nationalized medicine” would be seen as pejorative by a majority of Americans, so he renamed the concept.

Nationalized healthcare became “Medicare for All.” It was very creative on Sanders’s part. This has become the essence of the left’s proposals for how to pursue medical reform, now that ObamaCare has become too heavy a political burden to bear and is essentially non-functioning.

Even Democrats who presented themselves as being more moderate than the socialist Sanders — such as the two senators representing my home state of New Hampshire, Sens. Jeanne Shaheen and Maggie Hassan — have globed onto Medicare for All as the most convenient way to demonstrate their support for dramatic improvement in our nation’s healthcare system.

It is a spurious claim. It does not pass the smell test of political opportunism.

To assert that Medicare For All — or to use its more honest label, nationalization — would actually produce a better, more effective healthcare system for Americans is a hard sell when one looks at the facts.

The proposal is said to be legitimate because, after all, Medicare works fairly well for the older Americans who are insured by this national plan. So why would it not be just as good for everyone else?

As I have mentioned this seems like a reasonable view until it is submitted to rational analysis. Medicare works because the cost of the healthcare that is delivered to seniors is highly subsidized by those Americans who have private insurance.

It is estimated that the unreimbursed costs of hospital care under Medicare and Medicaid are approximately $58 billion a year. The vast majority of this cost is Medicare-driven. This means that the federal government when it so generously provides hospital coverage to people over 65, is only paying a limited amount of the real cost of the care.

The rest of the burden is borne by everyone else who has private insurance or by the hospitals eating the costs.

Thus if you go to a Medicare for All system, where everyone gets federally-paid health insurance — a nationalized system — the result will be billions and billions of dollars in unreimbursed costs.

Covering those costs becomes extremely problematic. If you look at the two major nationalized systems that presently are wrestling, unsuccessfully, with this problem, Canada, and the United Kingdom, it is evident that the quality and delivery of healthcare services are dramatically and negatively impacted.

Rationing, both overt and indirect, is one consistent outcome of a Medicare for All system as presently used in Canada and Britain. In Canada, the average total wait time to see a general practitioner, then a specialist, and then have a procedure is 20 weeks. This puts people at serious risk. It is one of the reasons that Canadians who can afford it come in droves to the United States for treatment.

In the UK, there is actually a board that determines whether or not a patient qualifies for a procedure. In part, it weighs the patient’s age against the costs and outcomes of the procedure. If you do not meet the criteria, you do not get the procedure.

These are only limited examples of the effects of rationing in these nationalized systems.

A significant reduction in the quality and number of people being attracted into the healthcare system is also a discernible result, as salaries are capped and costs related to quality are foregone.

The incentive to innovate and generate new medicines and procedures is also radically muted under nationalized systems.

The capital needed to pursue these expensive undertakings dries up due to the lack of adequate returns on the investment and the excess regulations of the government bureaucracy.

It takes about 12 years and $1 billion to bring a new, dynamic drug to the market. This type of investment simply cannot realize an adequate return in a nationalized system, and the development of breakthrough drugs and technology is therefore chilled.

Medicare for All, a.k.a. nationalization is one of those ideas that sounds good as a phrase in a stump speech. But if it were actually pursued, Americans would see a deterioration in their healthcare. All Americans would find that at some level their access to better care was rationed.

The track record of socialism in so many arenas is abysmal but it is especially so in healthcare. Yet this is the direction in which the left wants to take this country. The left calls out in full-throated hyperbole for a system they claim will give Americans Medicare for All. It is a failed and cruel policy but it has been sugar-coated in focus-group language.

My concern is and what the left should really be saying is that it wants Rationing for All. That would be a more honest statement of what would happen under the system of healthcare the leftists propose.

And remember, some of the States have taken steps to expand the Medicaid system, which counts on Federal funding as well as State funding. Where do you think that money will come from? Yes, we the tax-payers.

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