[jsherman999]

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A good, succinct summary.

Via: RCP (Froma Harrop)

Paul Ryan has bold economic ideas. Or maybe he doesn't. It's really hard to know what Mitt Romney's VP pick thinks, since his budget plan includes Obamacare's $716 billion in Medicare savings over 10 years, but his election plan has him saying he would restore those spending cuts. Romney is accusing president Obama of "robbing" that money from today's beneficiaries.

Let's set the confusion aside for a moment and look at where the projected cuts would be made.

First off, none of the savings comes from changing eligibility or benefits. The president's health care reforms actually add benefits to Medicare. The savings come from reducing payments to hospitals, home-health services and other providers, though not doctors. And all the provider groups (except for insurers) have gone along with it because by covering 32 million currently uninsured Americans, the law brings them more paying customers.

The Ryan plan would affect only Americans now under age 55. It would replace guaranteed benefits with vouchers, whereby folks would be given a set number of dollars with which to buy private coverage or pay their Medicare premium. It would save money by increasing that number of dollars over the years by less than expected rises in medical costs.

In the real world, private insurers will skim off the young, healthy and profitable. What's left of traditional Medicare will attract the sickest patients, and down it goes.

But even accepting Ryan's sunnier vision requires swallowing several delusions:

Delusion 1: Offering vouchers to buy a private plan opens a wonderful world of choice to future beneficiaries. Exactly what would that choice be? It would be a choice of private insurers. In many cases, that means less choice of doctors and hospitals, as the for-profits force enrollees into their networks of approved providers.

Private insurers are in the business of making money for their executives and stockholders. UnitedHealth Group CEO Stephen Hemsley alone hauled in $42 million last year. As implied above, an old person with asthma, a heart problem and two other worsening conditions is very, very bad for the bottom line. The idea that these profit-oriented companies would compete to attract sick and expensive elderly patients is not only a fantasy, it's an insane fantasy.

Delusion 2: Old-fashioned Medicare as we know it would be preserved for Americans 55 and older. This will not happen.

The scheme to radically degrade Medicare benefits for those born after 1957 would blow up well before the year of change, 2023, arrives. The Ryan plan has gotten as far as it has because younger Americans have not been focusing on their retirements. Republicans think they can drop this voucher system on them unawares.

But the likelihood that Americans born in 1957 or after are going to accept a two-class deal in which they have to pay for older peoples' generous benefits while expecting far less for themselves is about zero. As time goes on, there will be progressively more voters born after 1957 and fewer born before. Thus, the politically numerous would either demand that older Americans' Medicare benefits be dragged down to their promised levels or that the whole voucher business be dropped. And who could blame them?

Delusion 3: Only private insurers can curb Medicare spending. Not true. The evidence comes in the Republicans' own political ads complaining that ObamaCare cuts Medicare spending. Furthermore, spending on the Medicare program has been growing more slowly than that on private coverage because of lower administrative costs.

There's so much waste in Medicare that you could probably cut $1 trillion out and patients would not notice a difference. That's actually good news -- or should be.

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[Rondec]

The problem is that in roughly twenty years, Medicare is going to change significantly. There won't be money to pay for it at current rates. Obama has not offered to keep things as they are, in fact, he has increased spending in the Medicare system on the hope that in the future "expenditures on health care providers can be reduced." I am all for the elimination of the "donut hole" and the covering of preventive care, but it hasn't been paid for.

This is a problem that has to be addressed! Either more funds will have to be allocated from somewhere, or the program will be cut more significantly than with Paul Ryan's plan.

I wish that somebody other than Ryan would actually talk about this issue, because it is a very real problem. When I reach retirement age, I do not expect Medicare to be there as a real form of coverage.

The last statement is pretty bogus, too. "There is so much waste in Medicare that you could probably cut 1 trillion dollars out and patients would not know the difference." On one hand, we are told that Medicare is run tighter, with less administrative costs than private insurance. Medicare pays less than commercial insurers for most services. So unless there is a huge amount of fraud and unnecessary testing done (which there might be), I have no idea where this number comes from. It just feels made up to me, by someone who wants to say that all that needs to be done to shore up Medicare is just "cut the waste."

It's not that easy.

[kswier]

Something has to give. Either decreased benefits, higher taxes, incurring more debt. Choose your poison. The one thing that I do not think is acceptable is forcing those who are retired or about to retire to deal with decreased benefits.

[Nesster]

single payor universal coverage would do a lot to curb all medical cost inflation. unfortunately too many vested interests are against.

[jeffkrol]

The problem is that in roughly twenty years, Medicare is going to change significantly. There won't be money to pay for it at current rates. Obama has not offered to keep things as they are, in fact, he has increased spending in the Medicare system on the hope that in the future "expenditures on health care providers can be reduced." I am all for the elimination of the "donut hole" and the covering of preventive care, but it hasn't been paid for.

This is a problem that has to be addressed! Either more funds will have to be allocated from somewhere, or the program will be cut more significantly than with Paul Ryan's plan.


It's not that easy.

Sorry it is that easy.. tell me how much will taxes go up to pay for "defense" how much HAVE they gone up to pay for "defense" The US can spend anything it needs to spend.. taxing be darned...

Something has to give. Either decreased benefits, higher taxes, incurring more debt. Choose your poison. The one thing that I do not think is acceptable is forcing those who are retired or about to retire to deal with decreased benefits.

no, nothing has to "give" except are realization of the US's ground rules... NO it is not like your checkbook...
The whole issue is moral NOT financial..

And your buying into the "urban legend" of taxing to spend. It is NOT necessary...

Medicare "going broke" is equivalent to the defense dept "going broke".. you don't hear about that happening so you...(btw not 1 penny of any taxes went to either war over the last 10 years.. THINK)............ neither can happen in reality...

Some people have called the Social Security program a Ponzi scheme for workers who will be nowhere near retirement age by 2033 and call for an “opt out” option that would allow working individuals to invest elsewhere the money taken from their checks for Social Security.
But, how then would the government fund the program?
The Federal government can print fiat money to infinity; it will always be able to pay Social Security no matter what the balance sheets say. By keeping the presses rolling, Federal officials could take the advice of one Forbes contributor who says he can fix the program for $49.99:

We’ll buy a really nice pen (that’s what costs $49.99), have one of those federal workers write “44 quadrillion dollars” on it [the Trust Fund balance], and put it in the drawer. By my calculations, this will keep Social Security solvent through 3575, plus granny will get a free lifetime supply of Werther’s Original. Entitlement crisis solved!

Or, we could just admit that the Trust Fund balance is arbitrary and bears no meaningful relationship to the government’s ability to pay Social Security benefits.

The Forbes writer’s plan essentially removes any initiative for Americans to work and save in an attempt to retire with more than just monthly government bread, because in the end they will have had their savings taxed through inflation.
Social Security is not going to go broke, despite the mainstream media’s effort to make the Nation believe it will; and whatever the “plans” to repair the social welfare system, they will quit working, saving Americans in the same place: the pocketbook.

Social Security Cannot Go Broke : Personal Liberty Alerts

http://my.firedoglake.com/letsgetitdone/tag/fiat-money-systems/

Bad ideas about spending constraints on Governments sovereign in their own currency

In addition, to the mistakes in your ideas on fiscal sustainability and fiscal responsibility, Mr. President, you also seem to have ideas about spending constraints on the United States Government, and other Governments sovereign in their own currency, that do not exist. On a number of occasions now, you have told the American people that the Government is “running out of money,” it needs to fulfill its obligations. Surely, Mr. President, you jest. Hasn’t your Secretary of the Treasury, or Mr, Bernanke told you yet, that the Government of the United States, can always cause non-Government accounts at the Federal Reserve Bank to be marked up by any amount needed to meet obligations? Governments sovereign in their own currency are like scorekeepers at games. They neither have nor don’t have money. Instead, they have the power to mark up or mark down non-Government accounts (or Government accounts), such as Social Security accounts or that matter). This power is not dependent on anything else. It is not dependent on the international markets. It is not dependent on foreign Governments. It is not dependent on commodity backing of their currency. It is a matter of fiat, which is why such currencies are called fiat currencies.

Mr. President, the United States of America can’t go broke. It has no solvency risk. It can always meet its obligations. It doesn’t really fund its expenditures with tax money, or borrowing, and it never needs to do so in order to “fund”, even though it does tax and also borrow money to regulate inflation and establish interest rates. This doesn’t mean that the Government can spend without limit. It can spend so much that it creates inflation or the risk of it. But this is not a solvency issue. It is not running out of money. So, please don’t tell us any more that we are running out of money or respond to policy proposals by asking “How are you gonna pay for it?” Because I know, and so should you, that we can always pay for it. The real issue here is what the impact will be if we do pay for it, whatever “it” happens to be.

"work harder, work longer, get paid less"...It has nothing to do w/ gov. "fiscal responsibility"

[GeneV]

Jeff has a point about defense. Why is it that we act as though Medicare must pay for itself dollar for dollar with taxes collected over the work life of the participant, but dollars for wars can come from anywhere or nowhere? That does not mean that all programs should not be made more efficient, but there is a real double standard applied to health care.

One place to start might be eliminating the bonus paid to private insurers over traditional Medicare. Someone needs to explain to me what that is accomplishing.

[boriscleto]

Why is it that we act as though Medicare must pay for itself dollar for dollar with taxes collected over the work life of the participant, but dollars for wars can come from anywhere or nowhere?

Because most people are still under the delusion that US Dollars are backed by something or should be backed by something. Americans, especially my generation and younger, have no comprehension of economics beyond "I have to make sure there's enough money in my account so that I don't get an overdraft fee if I use the gas pump".

[jeffkrol]

but dollars for wars can come from nowhere?

not to hammer the point, but for the last 10+ years that is exactly where they came from "out of nowhere".. and will continue to come from.. as we "pretend" cutting other costs will what cover it??? FAT chance.

Staggering as it is, that figure grossly underestimates the total cost of wars in Iraq, Afghanistan and Pakistan to the U.S. Treasury and ignores more imposing costs yet to come, according to a study released on Wednesday.
The final bill will run at least $3.7 trillion and could reach as high as $4.4 trillion, according to the research project "Costs of War" by Brown University's Watson Institute for International Studies. (Home | Costs of War)
In the 10 years since U.S. troops went into Afghanistan to root out the al Qaeda leaders behind the September 11, 2001, attacks, spending on the conflicts totaled $2.3 trillion to $2.7 trillion.
Those numbers will continue to soar when considering often overlooked costs such as long-term obligations to wounded veterans and projected war spending from 2012 through 2020.

Cost of war at least $3.7 trillion and counting | Reuters

wonder how much better things would be w/ 3 trillion in infrastructure repairs..........

[Rondec]

Jeff has a point about defense. Why is it that we act as though Medicare must pay for itself dollar for dollar with taxes collected over the work life of the participant, but dollars for wars can come from anywhere or nowhere? That does not mean that all programs should not be made more efficient, but there is a real double standard applied to health care.

One place to start might be eliminating the bonus paid to private insurers over traditional Medicare. Someone needs to explain to me what that is accomplishing.

I have no problem with a Democrat floating a plan to "shore up Medicare" by cutting defense, by equivalent cost -- whatever that would be. I haven't heard that. What I have heard is a group of politicians promising to protect Medicare, but never saying how.

I feel like Medicare in general cost shifts a significant amount of health care cost to younger people. It does so in two ways. First of all, it pays hospitals and doctors roughly 95 percent of cost for procedures and care. It has been expected that private insurers will pay more and pick up the gap. The second thing, of course, is that tax payers subsidize Medicare to a significant extent. This has not been a problem in the past when there were high numbers of young employed people as compared to the number of retirees, but as those numbers shift, there is going to be "hell to pay." Efficiencies, rationing, etc will all need to be applied, but I don't see how the numbers add up in the long run.

To the over all question, I do think that some sort of Universal coverage is what is needed. Still, it seems as though that is not in the cards and will not be for a long time to come.

I am not in favor of Ryan's budget plan, but I want/need to hear substantive debate on the healthcare crisis in this country and what I hear, in general, are one liners targeted at a particular demographic. This neither helps the overall polarization in the country, nor helps to solve the serious issues at hand. It is hard to foresee a rosy future with these undealt with problems on the horizon.

[jeffkrol]

The second thing, of course, is that tax payers subsidize Medicare to a significant extent. This has not been a problem in the past when there were high numbers of young employed people as compared to the number of retirees, but as those numbers shift, there is going to be "hell to pay."

It is even harder to fix the problem when the basic "math" is not understood..........."sigh"..................

[les3547]

I am not in favor of Ryan's budget plan, but I want/need to hear substantive debate on the healthcare crisis in this country and what I hear, in general, are one liners targeted at a particular demographic. This neither helps the overall polarization in the country, nor helps to solve the serious issues at hand. It is hard to foresee a rosy future with these undealt with problems on the horizon.

It sounds partisan to say there is only one side of the debate causing the "healthcare crisis," but if that's the case then what else can one say? The reason we don't have a single payer program is because it couldn't get past the right wingers in congress, so we settled for AHCA. If the far right wanted proof government-run universal health care can lower health care costs for everyone, all they had to do was study the many examples of countries around the world who are doing it. Instead they spread false reasons why universal healthcare is a bad idea to people who believe their spin. Perfect example? The lies Romney/Ryan are spreading now about Obamacare draining $714 billion from Medicare. That's not just spin designed to scare people, it is a hypocritical lie made all the more shameful by the fact that the $714 billion cuts are to waste and fraud, exactly what the right says they are so wanting to fix in government!

So universal health care isn't what they want. What they want is to further the interests of the rich and well-off. Because a plan that has everybody caring for themselves exempts the rich from having to chip in for everybody, that's the reason, and the only reason, they want "smaller government." If one has plenty of money, one can afford the "every man for himself" philosophy, but the vast majority of people will be substantially poorer if it becomes a reality.

[Rondec]

It sounds partisan to say there is only one side of the debate causing the "healthcare crisis," but if that's the case then what else can one say? The reason we don't have a single payer program is because it couldn't get past the right wingers in congress, so we settled for AHCA. If the far right wanted proof government-run universal health care can lower health care costs for everyone, all they had to do was study the many examples of countries around the world who are doing it. Instead they spread false reasons why universal healthcare is a bad idea to people who believe their spin. Perfect example? The lies Romney/Ryan are spreading now about Obamacare draining $714 billion from Medicare. That's not just spin designed to scare people, it is a hypocritical lie made all the more shameful by the fact that the $714 billion cuts are to waste and fraud, exactly what the right says they are so wanting to fix in government!

So universal health care isn't what they want. What they want is to further the interests of the rich and well-off. Because a plan that has everybody caring for themselves exempts the rich from having to chip in for everybody, that's the reason, and the only reason, they want "smaller government." If one has plenty of money, one can afford the "every man for himself" philosophy, but the vast majority of people will be substantially poorer if it becomes a reality.

The problem isn't Congress, it is the country. People are really, truly split with regard to this issue and half of America would be glad for universal healthcare and half think it would be the beginning of communism here. There must be a coming together over these issues rather than a continued polarization if there ever will be change. Yet, each side benefits from a pressing to the extremes rather than a joining in the center.

[jeffkrol]

The problem isn't Congress, it is the country. People are really, truly split with regard to this issue and half of America would be glad for universal healthcare and half think it would be the beginning of communism here. There must be a coming together over these issues rather than a continued polarization if there ever will be change. Yet, each side benefits from a pressing to the extremes rather than a joining in the center.

Medicare is "socialist".... in other words we need to get people to "open their eyes"....

As I said about the "moral issue".. what better to keep people working for wages than the thought of death, remove that stick and they will sit around and play video games ................. it is all moral, not political, not financial, not economic.............directly.

[eddie1960]

single payor universal coverage would do a lot to curb all medical cost inflation. unfortunately too many vested interests are against.

Exactly. this is pretty much BTW how the rest of us manage the cost

[eddie1960]

Medicare is "socialist".... in other words we need to get people to "open their eyes"....

As I said about the "moral issue".. what better to keep people working for wages than the thought of death, remove that stick and they will sit around and play video games ................. it is all moral, not political, not financial, not economic.............directly.

yep serfs are cheaper than educated populace that are healthy. let em die off they are easily replaced by another minimum wage slave