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Dec 11
2009

Plug the deficit? Then get real about health-care costs

Posted by Ron F in recoveryrecessionObama Administrationjobshealth insurancehealth carefinancial crisiseconomyBanksbailout

Ron F

Opponents of the public option and other government-based efforts to bring down health-care costs pay lip service to the federal budget deficit, as well they must.

But with "entitlements reform" now making its way onto the Beltway agenda, it's time to get serious about this issue.

The fact is, malpractice reform, electronic records keeping, and similar health care cost-saving measures are mere palliatives when it comes to the fundamental issue of restraining insurance premiums, and with them, plugging the growing funding gap for Medicaid and Medicare, which is the biggest driver of the federal deficit.

Meanwhile, fully 30 percent of every health insurance dollar goes to administrative expenses designed primarily to cherry pick healthy patients, and there's little or nothing to keep insurance companies from continuing to do that under the current set-up. That leaves hospital emergency rooms to fill the gap and drive up costs, which then increase that part of the deficit related to Medicare and Medicaid.

Maybe the national health insurance exchanges that are envisaged by the bills in Congress will help spur enough new competition to bring down premiums, but if so, why wait to put them in place, as the legislation would currently do? In other words, opponents of more competition for insurance companies must come clean about the basic issue here, or their hypocrisy about saving Medicare will eventually become clear to the public. I certainly don't hear any Republicans (or Joe Lieberman for that matter) calling for an end to the anti-trust exemption for the industry. Nor do I hear them wanting to cut Medicare benefits.

Oh sure, they may be able to fool enough people for enough of the time about health care to regain power in Washington, but the deficit isn't going away any time soon and I don't see them doing anything about if the last time they held the fiscal reins is any indication.

More tax cuts equal more tax revenue? Where have we heard that before? The last time the budget was balanced was under Bill Clinton, and that reflected tax increases, not cuts, along with the economic growth his policies led to.

Was the Clinton boom just another bubble? Not entirely, and at least it created the Internet. As for deficit spending to get the economy out of the hole its in now, bank bailouts shouldn't be conflated with Keynesian economics. Most Keynesian economists who oppose the blank checks the Bush and Obama administrations handed the banks want more stimulus, not less.

Off topic? Not really. Fiscal responsibility in the face of a terribly weak recovery requires serious health care reform and government spending to create decent-paying jobs, ideally on projects that represent investments in the future as opposed to idle consumption. Instead we're getting incoherent demagoguery about socialism and the like.

Coming soon:  A look at health-care insurance lobby's campaign contributions to Senator Lieberman.

 

 

 

Comments (1)Add Comment
Anne Field
...
written by Anne Field, December 12, 2009
Throw the Blue Dog Democrats in while you're at it. They receive 25% more health care industry contributions than other Democrats. Why the press doesn't include this fact every time they write about this subject is beyond me. Not Fox News etc., but everyone else.

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/30/AR2009073004267.html

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