Thursday, November 21, 2024
Hawai'i Free Press

Current Articles | Archives

Thursday, December 29, 2011
Medicare Whac-A-Mole
By NCPA @ 3:08 PM :: 4845 Views :: National News, Ethics

From NCPA

Medicare as we know it is the nation's biggest fiscal disaster. For years members of Congress and the executive branch have been trying, and failing, to find ways to restrain the growth of government health spending on seniors. As the single largest driver of long-term federal debt, the program is projected to increase in costs rapidly over the next few decades, with the twin drivers of a gradually aging population and rising health care costs that outstrip inflation and economic growth, says Peter Suderman, an associate editor at Reason Magazine.

  • Medicare is a $500 billion program on track to become a $1 trillion program before hitting estimated insolvency in 2024.
  • President Obama has made modest inroads, having signed a debt deal with Republicans over the summer that allowed for a 2 percent cut to Medicare spending.
  • He also endorsed a $248 billion Medicare cut as part of his own debt reduction proposal in September.

Despite recognition of the great problems that Medicare faces for its fiscal future, the recent legislative schemes do not address the problem. Rather, by relying on a technical system of price controls and complicated payout formulas, Congress is continuing to play the same game that it has for years in which it drives down direct costs in one area only to see them spring up elsewhere.

In attempting to address the problems of Medicare and medical expenses on the whole, members of Congress should look to the history of the program. Upon the program's initiation, actual costs routinely outstripped projections because coordinators failed to account for a dynamic system in which consumers respond to market changes.

  • The House Ways and Means Committee, when charged with assessing the costs of the program, projected that total costs for the first year would run no more than $1.3 billion when total spending in the first year actually was $4.6 billion.
  • The committee did not improve its accuracy over time, projecting that hospital spending would amount to just $3.1 billion in 1970 when it was actually $7.1 billion.

John Goodman, president of the National Center for Policy Analysis, explains that these chronic projection mistakes are because analysts failed to account for increased demand as 19 million people were given free access to unlimited health care. Today, Congress makes the same mistakes in different ways, failing to account for a dynamic market that undermines direct controls and ignores price-controlling efforts.

Source: Peter Suderman, "Medicare Whac-A-Mole," Reason Magazine, January 2012.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii

Obookiah

OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

RailRipoff.com

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

SenatorFong.com

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii