3/20/2013 5:15 PM ET|
Why we need 'death panels'
We can't afford inaction
Yet instead of meaningful reforms, we're merely chipping away at the edges while pouring even more taxpayer cash into a broken system. Obamacare's focus is largely on expanding coverage to uninsured Americans, either by fiat (individual mandate) or by greatly expanding government assistance via Medicaid. This strategy isn't sufficient; it doesn't cut costs.
And we can no longer afford to fund this failure, with the national debt set to soar from $16.7 trillion now (or $53,000 for every man, woman and child) to $25 trillion by 2023, a 49% increase.
With our debt-to-GDP ratio already over 100% and rising, we're in the red zone of excess indebtedness. Economists warn that if we don't turn things around, we'll damage the economy's ability to grow; reduce our ability to respond to wars, natural disasters and recessions; and increase our vulnerability to financial panics. And we'll also increasingly be on the hook for interest payments, paying our bondholders in China and Japan instead of paving new roads or building new schools.
The problem is health care spending, not low taxes. In 2023, the Congressional Budget Office expects tax revenue to be nearly double 2012's total. Yet it projects the deficit at nearly $1 trillion. That's because spending will rise too fast, with average annual gains of 6.2% for Medicare and nearly 10% for Medicaid.
The truth is that as health care costs rise in this broken system, entitlement programs can't keep up. We're overpromising benefits to seniors: The average two-earner couple that retired in 2010 will enjoy $387,000 in Medicare benefits after contributing (assuming a 2% real rate of return) $122,000 in Medicare taxes.
In essence, out of fear of angering important voting blocs -- not just those on Medicare now, but a generation of baby boomers now reaching the age of eligibility -- we're asking future generations to foot the bill. If we simply cashed out the system, giving seniors back the Medicare taxes they paid in instead of charging it to the national credit card, the result would look a lot like Republican House Budget Committee Chairman Paul Ryan's "premium-support" plan.
If people wanted more health care, they'd have to pay for it out of pocket. If they had unhealthy lifestyles, they'd pay more out of pocket. And it would encourage holistic care options, not just fee-for-service Medicare that encourages doctors and hospitals to order more tests and more procedures to maximize revenue.
While I find the Ryan idea attractive, since it solves the budget problem and unleashes free-market forces on the health care system, voters rejected it last November.
And yes, this may sound like I want to leave some seniors out in the cold. But is what we're doing to young people any more fair?
This premium-support idea is already happening to young working adults, many with new families. Employers are increasingly offering health insurance subsidies instead of paying for coverage outright. Unable to pay much out of pocket, because of stagnant wages and higher living expenses, these young folks are forced into high-deductible, low-coverage health insurance plans.
All the while, their payroll taxes go to support Medicare seniors receiving more than they paid in.
It's no wonder these people -- the backbone of the economy -- are so stressed as the evidence builds the American dream is slipping away from them. (Read about the economic stress on young workers in this study by the American Psychological Association, and their inability to build wealth in this one from the Urban Institute.)
This brings me back to Musashi.
If we're going to end this slide into the fiscal abyss and stop the intergenerational heist, we need to address both the cost of care and the fact that so much goes to giving a few more days of low-quality life to the terminally ill. These resources could be better spent preparing the way for those just starting in life, while still providing our seniors with a more dignified end.
Bipartisan support does seem to be coalescing around means-testing for Medicare benefits, so that those who can afford it pay more. That's great, but we also we need to encourage increased use of hospice care while discouraging repeated and outrageously expensive hospitalizations.
Think that's inhumane? This heartbreaking New Yorker story by surgeon Atul Gawande about the current state of end-of-life care will change your mind.
And consider what you'd do if you had to pay those expenses out of pocket, as so many young families have to. Death is inevitable. Would you impoverish your family in an ultimately unsuccessful fight against it?
We need to celebrate our mortality, appreciate how delicate the balance between life and death is, and understand that a better life and a longer life aren't necessarily the same thing -- especially if it consumes resources desperately needed by the generations to come.
Musashi understood this. It's time we did, too.
Be sure to check out Anthony's new money management service, Mirhaydari Capital Management, and his investment newsletter, the Edge. A free, two-week trial subscription to the newsletter has been extended to MSN Money readers. Click here to sign up. Mirhaydari can be contacted at firstname.lastname@example.org and followed on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.
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What a stunning reversal!
Put the government in charge of anything and it tanks. The reason healthcare costs so much is because the government pays for it. Same with college tuition (anyone gets a loan). Same with the balloon in the housing market (Fannie and freddie). You old people who voted for this clown and his unsustainable healthcare model will be weeded out. When the government pays, costs soar and services have to be rationed. It's the only way the system can partially work. Good luck.
First we start with abortion. We legitimize that.
Then we move towards government controlled health care, this brings
out the argument of reducing care for the elderly. Death panels, review
boards, call them what you want.
Next will be euthenasia. All for the sake of the $.
No mention of the government workers that are exempt from this plan. No mention of the salaries Doctors, dentist and other health professionals are raking in. No mention of limiting or reducing malpractice claims by attorneys. No blame the old. Bad life sytle it's called aging.
How about we do physicals on Medicaid patients. Those who are overweight, sick, drug addicts, alcoholics etc are weeded out through euthenasia camps.
I would pray that you wake up with a chest pain tonight and you have had a massive heart attack. Why keep a writer alive. Or you are T-boned by a drunk on your drive home tonight. Too many injuries, just let nature takes its course, after all death is a natural thing, eh.
I cannot believe the the Maobama News Network has finally decided to come clean about so called death panels. And even more unbelievable that you make it a bussiness news story.
The author of this article must be young as well. Notice the first thing was "We are taxing the young!" Did not us who are now becoming the aged, once pay for our parents? what is different now? Is it not the bloated fill in the blanks, take away benefits before they start, spend the money on anything else, governemnt agencies that are diverting us away from the real problem? GET the government out of my health care, it was not broken before Jan. 2009. Keep the government out of my die, tHave the government spend responsibly and stop punishing us when they screw up. . Time for the politicians and the author of this article to grow up. But wait that would mean they are getting older and have to abide byh the government deeming if they are worthy to be treated or just drugged into oblivion.
I'm about done with MSN giving this misanthrope a platform. Maybe it's time to make soilant green the author.
Mirhaydari's fence hopping column
could use a death panel itself.
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