Saving Medicare: a bipartisan compromise
Medicare and Social Security are very popular programs because they have been so successful at lifting our vulnerable elderly population from poverty. As a beneficiary of these programs I can understand why they are liked. But they are in trouble; Medicare in particular, we are told, is unsustainable. The Republican Party platform goes along with their vice-presidential candidate's plan to sustain it by switching to a voucher system; to base it not on defined benefits, as it is currently, but on defined contributions. With the costs of health care continuing to escalate this amounts, in republican speak, to the legitimate rape of our elderly, and often they, as their female counterparts in rape, really have no innate defenses to protect them. Those increased costs under the Republican plan would come down on the elderly; and we're told to role over and enjoy it? Unless the Republicans have something up their sleeves that will reduce the costs of healthcare it is massively unfair. Depending on marketplace pressures, their stock in trade, to fix the problem won't work. It's too good at making money. Why should it stop what it does so well? The government isn't going to buck the money that comes from the system and no one else has the power.
On the other hand Democrats look at successful European programs and inch toward socialized medicine. Having been treated very well and efficiently in a Swedish hospital I am not as averse to that option as most conservatives. Scandinavians also pay for it with a high tax rate on all, but especially the wealthy. In this country that group, together with the bulk of the healthcare industry, who all benefit from its high costs, has successfully sunk any moves in that direction in the past. Even if we chose this direction, and relied on taxes on the wealthy to pay for it, the costs are rising around the world faster than the rest of the economy; the solution is temporary.
Were healthcare a regular industry, like automobiles, we would love to see it grow consistently at near double digit levels, but it's not, and treating it like an industry is a lot of how we got here. Healthcare is a service that we all need at some time or another and needs to be treated as such. Some people also need more of it. Sometimes the reason they need more is their own lifestyle, and many, like the audience that shouted down Paul Ryan's answer, 'that the uninsured can get help at the ER', with "NO!" , balk at covering an others' weaknesses. Sometimes it has to do with where they live. Sometimes it's accidental, or an act of God.
Insuring services is problematic because the demand has no constraints if paid for by the insurer. If we could get someone else to pay for our cars we would all be driving Cadillacs, BMWs, or Lamborghinis; that's why health care is so expensive. That problem was recognized years ago and it led to a variety of regulatory and financial efforts on the part of government, the largest payer for those services since Medicare, to control it--with little success. It's problematic because those choosing a healthier lifestyle may justifiably feel put upon when they are called to help someone who doesn't. It's problematic because it removes the person benefiting from the service from any part in paying for that service. This puts us where we are today, saddled with an overly expensive health care system that strains our ability to pay for it.
This system is complex and adaptive because it is made up of individuals who can read their environments and modify their responses to any imposed restraints in order to continue the high profits. It's like a market in this sense, except that we have removed all of the balancing forces that exist in a market. So what is needed is to find a way to get those forces back to work.
Vouchers are touted to move this direction by giving the individual the responsibility of choosing their insurer, but it's the insurer paying for the service that is the problem. Something else is needed.
Health savings accounts also put the person in charge. They are composed of a savings account and a high deductible insurance policy. The individual is responsible for paying from the savings account for routine health care and the deductible should illness or injury make the insurance part necessary. In current practice any accumulated savings revert to a retirement account at age 65, when the person is eligible for Medicare. As such they are the only mechanism that provides a clear dollar benefit that is an incentive for choosing a better lifestyle and making healthier decisions.
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