The Medicare Football

Charles Schultz’s oft-revisited storyline is a useful parable for analyzing some of the politics of healthcare reform today.   Consider Lucy to be government proponents of various healthcare bills and plans; Charlie Brown, some concerned citizens; and the football, those various bills and plans.

Once again, the government is telling us that a huge new program, one affecting more than 1/6 of the economy, will be deficit- and debt- neutral without major increases in taxes.  Why?  Because much the expansion will be “paid” for by waste reduction in Medicare.

The first questions we Charlie Browns – who are expected to be happy and complacently accept these proofs by assertion – must ask include the following.

“What’s the rush? Why are we running at this problem of healthcare reform, which is so large and complex, when we should be approaching it deliberately and thoughtfully?”

“What do you mean ‘waste’?  If this government program has so much waste in it, won’t the new one be wasteful, too? And how come you in Congress haven’t rid this program of “waste” already?”

Then come three other inquiries, based on facts also analogous to Lucy’s pulling away the football.

“Wait a minute!  Isn’t Medicare itself on an unsustainable path?”

“Shouldn’t the alleged savings first go to shoring up this program?”

”What will be left to reduce or finance the increase in government spending the new healthcare plans bring with them?”

Here’s what the Social Security and Medical Boards of Trustees had to say in “A Summary of the 2009 Annual Reports”:

“The financial condition of the Social Security and Medicare programs remains challenging. Projected long run program costs are not sustainable under current program parameters…As we reported last year, Medicare’s financial difficulties come sooner—and are much more severe—than those confronting Social Security. While both programs face demographic challenges, rapidly growing health care costs also affect Medicare. Underlying health care costs per enrollee are projected to rise faster than the earnings per worker on which payroll taxes and Social Security benefits are based As a result, while Medicare’s annual costs were 3.2 percent of Gross Domestic Product (GDP) in 2008, or about three quarters of Social Security’s, they are projected to surpass Social Security expenditures in 2028 and reach 11.4 percent of GDP in 2083.”

Remember now, these are the programs Congress plans to take from in order to create a new and more expansive health care program.  “Come on Charles Brown, kick the football,” they insist.

Here’s a graph to help bring home the point.  It comes from the same report.

You will note that if payroll taxes stay steady at 1.5% of GDP, more and more of the funding for this program must come from “general revenue” – that is to say, “tax increases”.  You should note as well that Timothy F. Geithner, Secretary of the Treasury, is also Managing Trustee for Medicare and Social Security Funds, and first to sign this report.  And remember that rising medical costs are only one variable underlying these graphs: another is demographic change – the baby boomers were born 1946-1964, and the oldest are about to become elderly and eligible.

Last week, Senate Finance Chairman Max Baucus, himself author of a healthcare reform bill, ordered Medicare regulators to investigate, and possibly punish and gag, Humana for communicating with some of its members that their Medicare benefits may be cut.

Humana, played by Lucy’s brother Linus, yelled from the sidelines, “Don’t do it Charlie Brown.”  Lucy punched Linus in the nose.

September 24’s Wall Street Journal suggests that consistency of approach dictates silencing Congressional Budget Office (CBO) director Douglas Elmendorf as well. He is, after all, on record for telling Senator Baucus’s committee that its proposed $123 billion cut from Medicare Advantage will cause lower or lost benefits for millions of current beneficiaries.  Let’s add Tim Geithner to the gag list as well.

Yes, Sarah Palin’s reference to government “death panels” was over-the-top hyperbole.  On the other hand, is it any wonder that Seniors are nervous when politicians say there are going to cut “waste” from a program that Seniors rely on, especially when that program is running out of money without any additional “cost cutting”?

Before we Charlie Browns of the country tie on our running shoes, we should insist that any new funding for an expanded healthcare program come from sources other than Medicare and Medicaid, programs already headed into fiscal freefall.   Just as Lucy does to Charlie Brown, our elected representatives insult our intelligence.  Even in real life people can be cartoonish, but healthcare and the fiscal health of the nation are serious business.