Join Philip K. Howard, in a thought provoking discussion on the flaws in today’s legal system, Sunday, November 7, 2010 at 12:30 PM, KERA Channel 13, on the McCuistion Program.
Philip Howard author of Life Without Lawyers and Founder and Chair of Common Good, a nonpartisan national coalition dedicated to restoring common sense to America, believes that we are becoming more and more litigious as a society, to the detriment of common sense and good judgment.
Tune in as Philip Howard expounds on his stated purpose of simplifying our legal system.
We encourage you to view all McCuistion TV episodes, where you can both watch the videos and interact with the McCuistion team and other viewers. You can also follow McCuistion TV on Twitter.
Join us this Sunday as we talk about things that matter… with people who care.
Dr. Ron Anderson, President/CEO of Parkland Hospital System in Dallas, and Dr. John Goodman, President/CEO of the National Center for Policy Analysis, recently debated the Patient Protection and Affordable Care Act.
Dr. Anderson opened his comments by mentioning the McCuistion Program, on which he and John Goodman have taken have expressed very divergent views on health care. According to Dr. Anderson, “we need a safety net institution; the market doesn’t always work. We need a bias toward value not volume and to be involved in shifting the paradigm toward preventive care.”
Dr. Goodman comments on how surprisingly they agreed more than disagreed on many issues: “I had a lively discussion about how health reform will affect the nation’s health care system. Ron is a nationally known advocate of national health insurance. I am at the other end of the spectrum. This may have been the first formal debate over the bill since its passage. What was remarkable was not how much we disagreed, but how much we agreed. In particular, we both think:
Emergency room traffic will increase rather than decrease. Access to care for seniors and the disabled will be so impaired that they are at risk of becoming like Medicaid enrollees -forced to seek care at community health centers and safety-net hospitals. And extraordinary discretionary power is being given to one federal agency to make decisions that will affect everyone.”
You can also view the entire discussion by going here.
Regarding the current fiscal crisis, economists on the left and right are expressing concern — in some cases alarm — over the fiscal health of the U.S. government. Currently, we are running a deficit equal to about 10% of GDP; but the government is still able to borrow at 3%. No other country in the world could do that. And we may not be able to do it much longer. We may be living in the calm before the storm. As in the case of Greece — and possibly all of southern Europe — international investors may decide that we have neither the will nor the ability to pay back our debtors. In that case, the government’s borrowing costs will soar.
How bad are things? How much of the problem is health care? Can we tax our way out of this fiscal crisis?
Another day older
And deeper in debt
My own view is that the fiscal crisis is going to begin at the bottom and rise to the top. Already we have seen some local governments declare bankruptcy. Expect more of that. In the next several years, I believe some very large cities are going to announce that they cannot pay their bills. State governments will be next. Whereas local governments can declare bankruptcy, state governments can only default. A default by the state of California seems almost inevitable.
But is it conceivable that the U.S. government could default? Actually, yes. Every projection shows the gap between spending and tax revenues rising through time. And the problem at the federal level is basically the same as it is at the state and local levels: We made promises, mainly promises of benefits for retirees, that we were unwilling to fund.
Two years ago the first of the baby boomers started claiming early retirement under Social Security. Next year, they will start signing up for Medicare. Before they are through, 78 million people will quit working, quit paying taxes, quit contributing to our retirement system and start drawing benefits instead. And we are not ready for them. Not in Social Security. Or Medicare. Or Medicaid. By not ready, I mean we have put no money aside to pay for the benefits the baby boomers think they have been promised.
In terms of short-term cash flow, the Obama administration is forecasting that federal spending will be at 25% of GDP by 2020, while revenues will be less than 20%. To keep the deficit at no more than 3% of GDP (not zero, but 3%), an Urban Institute/Brookings tax analysis suggests that tax rates must rise by 40% beginning in 2015. That means the bottom 10% rate would have to climb to 14% and the top 35% rate would go from 35% to 48%.
The fiscal crisis problem is not just a federal problem. State and local governments have unfunded retiree obligations of $2 trillion or more. Private companies have made (defined benefit) promises that are underfunded. And one-third of the baby boomers have an employer promise of post-retirement health care — almost none of which has been funded!
What I am describing is a huge gap between what the baby boomers think they have been promised and the resources available to meet those promises. What I am describing is oncoming generational warfare.
So let’s think about solutions to the fiscal crisis. As described previously at this blog, President Obama has appointed a commission on the federal debt, the National Commission on Fiscal Responsibility and Reform. Although nothing is for certain, many believe a value-added tax (VAT) will figure prominently in the proposed solutions.
But is a VAT tax, or any other tax, really an answer to our problems? Professor Laurence Kotlikoff and his colleagues have modeled the U.S. economy in the middle of a world economy to project the consequences of various policy proposals. For example, suppose we continue on the current path and fund the growth of entitlement spending with a VAT tax or a payroll tax or a consumption tax. What will the future look like for the United States as well as Europe?
Tax rates of this magnitude would be enormously harmful to the economy and are probably uncollectable. (Note that these are average tax rates; marginal tax rates would be much higher.)
Is there a better solution? Yes. We must move immediately from a pay-as-you-go (unfunded) entitlement system to one which is funded and in which each generation pays its own way. For Social Security and Medicare we have described how to do that elsewhere.
***
This article can also be found on John Goodman‘s personal blog.
Senior citizens are by far the biggest losers in health care reform. Consider that:
- More than half the cost of health care reform will be paid for by $523 billion of cuts in Medicare spending over the next ten years.
- Although there are some new benefits for seniors (mainly new drug coverage), the costs exceed the benefits by a factor of more than ten to one.
- As many as 8.5 million of the 11 million seniors in Medicare Advantage (MA) plans may lose their coverage, according to Medicare’s Chief Actuary.
- Those lucky enough to retain their MA coverage will face steep cuts in benefits or hefty increases in premiums or both.
- In addition to these direct costs there are indirect costs, including new taxes on drugs and medical devices. Although these taxes don’t single out senior citizens, who do you think are the heaviest users of wheelchairs, crutches, artificial joints, pacemakers, etc.?
- To make matters worse, severe rationing problems lie ahead, as 32 million newly insured people try to double their consumption of medical care under a reform bill that produces not one new doctor or nurse or other paramedical personnel. Because many of the newly insured will be in private plans paying market rates, they will be more attractive to doctors than Medicare enrollees paying about 20% to 30% less.
So how did this happen? Aren’t senior citizens supposed to be the most powerful voting bloc? Aren’t they supposed to be represented by the all-powerful AARP?
Unfortunately for seniors (and indeed all Medicare enrollees), AARP sold out its own members. Just as the AMA sold out the doctors and the labor unions sold out their own members, AARP signed on to legislation that helps AARP but hurts the millions of people who AARP claims to represent.
Continue reading about senior citizens and health care reform on John Goodman‘s blog.
Medical Underwriting: It’s Better than the Alternatives
Paul Krugman says the opposition to ObamaCare is conducting a campaign based on “blatant fear-mongering, unconstrained either by the facts or by any sense of decency.” The proponents’ case, by contrast, has been principled.
Hmmm…..Krugman and I must be listening to completely different sound bites. Over the past few weeks I can’t recall a single TV appearance by a proponent that did not involve an anecdotal horror story in which a hapless victim is abused by a mean insurance company. Is the purpose of these anecdotes to make us feel sympathy?… To get our checkbooks and make a contribution?… Or is the purpose to make us fear that we too could be abused?… In other words, to scare us??
[Interestingly, Krugman himself wrote a column only a few days earlier in which he based the entire argument for ObamaCare....on....on....you guessed it....a fear-mongering horror story! I'll let readers decide whether the delivery was "unconstrained by facts or any sense of decency." (David Henderson gives the rest of the story here.) Meanwhile, I predict that abuse of the sick by insurance companies will become more likely, not less likely under ObamaCare -- a subject I'll reserve for another day.]
Just how scared should we be? It’s been illegal to rescind a person’s insurance because of a change in health status since the passage of HIPAA in 1996. It’s also been illegal for any employer to discriminate against employees because of their health condition over the same period of time. So it’s only in the “individual market” (less than 10% of the total) that people get charged premiums which tend to reflect their expected health care costs.
Okay. So how well does the individual market work? Better than you might think. In his new book, Health Reform Without Side Effects (previously reviewed by me at the Health Affairs blog), Mark Pauly shows that the market works better than the health insurance exchanges ObamaCare would replace it with and better than the small group market that Obama would leave largely untouched. Moreover, with a few reasonable reforms, the individual market would work better still.
Continue Reading on John Goodman‘s Blog.
John C. Goodman is president and CEO of the National Center for Policy Analysis. The Wall Street Journal and the National Journal, among other publications, have called him the “Father of Health Savings Accounts,” and the Media Research Center credits him, along with former Sen. Phil Gramm and columnist Bill Kristol with playing the pivotal role in the defeat of the Clinton Administration’s plan to overhaul the U.S. health care system. He is also the Kellye Wright Fellow in health care.
Dr. John Goodman joined us via taped interview for a segment on health care for the McCuistion 20th Anniversary Program series. Considered one of the key “conservative” experts on health care, he presented his conservative views on health care reform. He had this to say in answer to my [Niki McCuistion] questions on the state of health care today and health cares’ new future, given the changes in the new administration plans. According to Dr. John Goodman, “Health care today is dysfunctional and has perverse incentives… Today, costs are higher, quality is lower and access is more difficult.”
While discussing his conservative views on health care reform, Dr. John Goodman talked about the billions of dollars being spent on health care for the elderly and the young. “It’s too easy now for people to wait to get health insurance till after they are sick and access to health care gets worse. There’s nothing that inspires me to have confidence in what is presently being proposed.”
Yet considering, he still believes there are good things going on relevant to health care; “from 12-13 million people managing their own health costs; to urgent care and walk in clinics and overall a free market for health care”. Dr. Goodman cited the way we can cross the border and get good health care at a fraction of what we pay in the US. And he voiced a concern over boomers and their numbers overwhelming the health care system, “We’re just not ready for them. They think all of these promises were made and there’s not going to be enough money to fulfill them.”
I asked what would you have taxpayers do? His answer,” Liberate the doctor and patient. Let the patient control the money and let doctors compete on price and quality.” For a sobering look at health care today and Dr. Goodman’s conservative views on health care reform, watch and listen to what Dr. John Goodman has to say.
***
Niki Nicastro McCuistion
Executive Producer/Producer
McCuistion
Below we have posted (with permission) John Goodman’s analysis on ObamaCare health care reform.
There have been 8 versions of ObamaCare. The numbers below are estimates made for one or more of them. We believe they are still in the ballpark, and we will update as more information becomes available.
“If you like the plan you are in you can keep it.”
19 million Number of people predicted to lose their employer plan (Lewin Group) 8 to 9 million Number of people predicted to lose their employer plan (CBO) $11,543 Employer incentive to drop coverage for a $30,000 a year worker with family [Tax subsidy in the exchange minus tax subsidy at work minus $2,000 fine] (IRET) 8.5 million Number of seniors and disabled people at risk of losing their Medicare Advantage plan (Medicare Chief Actuary) 3 million Additional people who will likely lose Medicare Advantage plan benefits (Medicare Chief Actuary) $816 Average annual benefit loss for 11 million seniors and disabled in Medicare Advantage plans (CBO) 33 million Number of people in traditional Medicare at risk of losing access to care because of $523 billion in cuts in Medicare spending (Medicare Chief Actuary) 20% Fraction of hospitals that would become unprofitable after Medicare spending cuts (Medicare Chief Actuary) “There will be no tax increases for anyone who earns less than $200,000.”
73 million Number of people who earn less than $200,000 who will see their tax bill rise (Joint Committee on Taxation) 40% Tax rate on “Cadillac” plans (Reconciliation Summary) 2.3% Hidden tax on wheelchairs and other medical supplies (CBO update) $27 billion Hidden “medicine cabinet” tax on drugs (Reconciliation Summary) 10% Tax on tanning salons (Reconciliation Summary) $60 billion Hidden health insurance tax (Reconciliation Summary) “Health insurance reform is…about creating a climate where our entrepreneurs and small businesses can succeed [and] about giving you the chance to prosper and grow.”
$100 million Cost of ObamaCare mandates for Caterpillar, Inc. in the first year alone (Caterpillar, Inc.) 60% Implicit marginal tax rate for workers earning as little as $25,000 (IRET) 65% Implicit marginal tax rate for families earning as little as $50,000 (IRET) 0.9% New payroll tax on the wages of entrepreneurs and small business owners (Reconciliation Summary) 3.8% New tax on the capital income of entrepreneurs and small business owners (Reconciliation Summary) “The average family will save $2,500 in health care costs by the time I complete my first term as President of the United States.”
111% Premium increase for individual insurance (AHIP) 54% Premium increase for individual insurance (BlueCross BlueShield) 106% Premium increase for individual insurance (Wellpoint) $2,100 Premium increase for the average family (CBO) “Over the past year the House and the Senate have been working on an effort to provide health insurance reform that lowers costs …”
$220 billion Rise in national health care spending over the next 10 years(Medicare Chief Actuary) “… that guarantees access to care …”
15 million Number of new people added to Medicaid, where care is increasingly rationed and where provider choice is increasingly restricted. (CBO) 0 Number of new doctors and nurses trained and number of new hospitals built to meet the needs of 32 million newly-insured (CBO) ” … and enhances the quality of health care for all Americans.”
24 million Number of people who will enter a health insurance exchange where health plans will have an incentive to underprovide to the sick. (CBO/NCPA)
19 million Number of people predicted to lose their employer plan (Lewin Group) 8 to 9 million Number of people predicted to lose their employer plan (CBO) $11,543 Employer incentive to drop coverage for a $30,000 a year worker with family [Tax subsidy in the exchange minus tax subsidy at work minus $2,000 fine] (IRET) 8.5 million Number of seniors and disabled people at risk of losing their Medicare Advantage plan (Medicare Chief Actuary) 3 million Additional people who will likely lose Medicare Advantage plan benefits (Medicare Chief Actuary) $816 Average annual benefit loss for 11 million seniors and disabled in Medicare Advantage plans (CBO) 33 million Number of people in traditional Medicare at risk of losing access to care because of $523 billion in cuts in Medicare spending (Medicare Chief Actuary) 20% Fraction of hospitals that would become unprofitable after Medicare spending cuts (Medicare Chief Actuary) “This is not about big government …”
16,500 Additional IRS auditors needed to enforce the legislation (Ways and Means Minority Report) “This legislation will protect families …”
$6,000 to $10,000 Marriage penalty if two $32,000-a-year workers say “I do.” (Ways and Means Minority Report) “We are going to get rid of the special deals …”
$7,300 Extra exemption from the Cadillac premium tax for members of labor unions. (Ways and Means Minority Report) “This bill will reduce the federal deficit …”
$562 billion Increase in the deficit after removing budget gimmicks and unrealistic tax increases and budget cuts relegated to future Congresses (CBO former director)
