Sunday, November 21, 2010

Health Care—Tell Us the Truth Before You Tell Us Why You Are Right

This is post of mine that appeared last week at Kaiser Health News.

Just after the election, I saw an exchange between CNN’s Anderson Cooper and the head of the Tea Party House Republican caucus, Michele Bachmann. Cooper tried to pin Bachmann down on just exactly what “specific spending cuts” she would make to get federal spending under control. When he suggested that Medicare was going to need big changes if the deficit was going to be reduced, Bachman wouldn’t be specific but responded that we “need to reform the system” but this “can’t be about scaring senior citizens.”

If the Republicans are serious about getting America’s fiscal house in order they are going to have to do a lot better than that.

During the election, I heard one Tea Party Republican candidate for the House say that we needed to get on top of all of the deficit spending and to do that we needed to reform the entitlement programs. But then he said hospitals and doctors are underpaid and we need to be sure they get better reimbursements.

Democrats aren’t much better at confronting the entitlement problems. President Obama has been telling the American people that the health care bill they passed in March -- the Patient Protection and Affordable Care Act -- will make health insurance affordable. Heck, it’s in the title of the bill. He’s also been saying that the new law actually reduces the deficit.

It is true the Congressional Budget Office (CBO) does estimate the new health care law will cover about 30 million more people and reduce the deficit by $138 billion over ten years. Of course to reach these numbers the bill uses plenty of budget gimmicks like front-end loading revenue and back-end loading benefits, ignoring the $300 billion physician fee crisis and raising taxes by $500 billion.

But, accepting the claim that the bill does reduce the deficit by $138 billion, we also need to remember that the same CBO report predicts we will add $12.7 trillion to the deficit over the next ten years -- a big chunk of it because of the health care entitlement costs that are out-of-control. To put this into perspective, without the $138 billion reduction in the deficit because of the health care bill, the CBO would have projected a $12.838 trillion increase in the deficit!

So both sides aren’t exactly facing our nation’s biggest fiscal problems in an honest way.

The Democrats refuse to admit their new health care law is not the kind of health care reform that would have at least begun to fix the entitlement problem.

Republicans haven’t done more than go negative on the new health care law and haven’t put up any real proposals for how they would deal with this conundrum. Their favorite campaign sound bite was to call for selling insurance across state lines. Just which state’s health insurance policies are affordable and would make health insurance affordable if they were sold in the rest of the states?

The health care entitlements, the old ones and the new one, simply swamp the federal budget. Take a look at the chart below. It comes from the same CBO report that affirms President Obama’s claim that the new health care law actually reduces the deficit by $138 billion.

There are a couple of thing to note about the CBO’s long-range federal budget projections:
  • While Social Security is a challenge, it’s a pretty modest a challenge when compared to the health care entitlements.
  • If the Democrats had really done health care reform this year, the trend line for the cost of the health care entitlements would not be continuing its startling upward trend.
  • All of the rest of federal spending, including for defense, is a fairly small part of America’s deficit and debt challenges. Big cuts there hardly matter if you aren’t going to tackle the health care entitlements.

The full CBO Report

Don’t “scare” seniors? I’ve read the reports and I’m scared. What we just saw occur was “health care reform?” Hardly.

We need more proposals like those being made by the President’s deficit reduction commission, and the Medicare reform proposal authored by Republican House members Paul Ryan of Wisconsin, Eric Cantor of Virginia and Kevin McCarthy of California. Irrespective of whether they are the best proposals, their authors started from a place where they told the truth.

More than scaring seniors, or anyone else, both Democrats and Republicans need to treat the American people like adults and be honest about just how critical a problem we have with health care spending. If both sides could do that first, then it would make it a lot easier to have a real conversation about the trade-offs we will, someday, inevitably have no choice but to make.
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