Is Medicare the Real Target of 'Health Care Reform?'

Nobody outside the inner halls of Congress really knows what’s going on in the negotiations on health care “reform. Every now and then, someone emerges from the formerly smoke-filled rooms and throws another 2,000 or so page “bill” out into the public and then disappears to continue talks to carve up one-sixth of the nation’s economy.

But we do know some of the critical unforgiving numbers. And we have strong reason to suspect that radical changes to Medicare Part E (as in Medicare for Everybody) is the real endgame, whatever the interim steps are called: public option, cooperatives, or mandated Insurance Exchanges.

We have the unmentionable truth that Medicare is insolvent. And the common dogma that Medicare is efficient, popular, and impregnable. Is it a Hegelian thesis and antithesis? With the synthesis being to throw the whole rest of the system, which is also allegedly bankrupting the country, into Medicare?

Are our leaders stark, raving mad? Or diabolically clever?

The on-the-books public debt is around $12 trillion, and Congress needs to pass still another law to increase the debt limit. The annual deficit is close to, or even exceeds, 40% of expenditures, the point that some call the tipping point for hyperinflation.We’re not going to grow our way out of this, not with GDP already down 25%, compared to 2000, if calculated in euros.

Then there are the unfunded liabilities of Medicare and Social Security, about which former U.S. Comptroller General David Walker has been sounding the alarm for years. Estimates are as high as $100 trillion or more–orders of magnitude greater than any conceivable ability to pay.

So here we have a legal obligation to pay back the $12 trillion we have loaned out, much of it to Chinese, Saudis, and other overseas investors. And the moral obligation, backed by politicians’ full faith and credit, to soon-to-be-retiring Baby Boomers.

The Chinese and the Saudis have the industry and the oil we absolutely need to live. Not to mention the Chinese army, nuclear weapons, and missiles. American seniors have–the vote.

It is incontrovertibly true that seniors, especially of the Baby Boomer generation, have been taxed all their working lives to pay for their medical needs in retirement. Their money has gone–into the “lock box”? Wherever it is, it is in the form of IOUs. Whose IOUs will get paid first?

Americans have been robbed by the Medicare system, just like Bernie Madoff’s investors were, only in vastly greater amounts. And they are just as likely to get their full benefits from Medicare as investors are to get their money back from Madoff’s prison cell.

No politician, however, wants to default openly, not on his own watch. There’s the danger to his career, from a voter revolt. And when voting doesn’t work, and peaceful demonstrations don’t work, people could become very surly indeed–and worse possibilities loom.

So here’s the con: We put everybody into the comprehensively reformed system. We suck in huge amounts of new revenues, not called “taxes” but rather “premiums,” “penalties,” “fees,” “surcharges,” or “shared responsibility payments.” Since the thresholds aren’t indexed for inflation, the “responsibility” to “share” the load for other people’s needs migrates down the social scale as the dollar deteriorates. Remember, also, that current health care proposals envision the government collecting new revenue for several years before full benefits–i.e. costs–kick in. Its health care on a layaway plan. A neat trick to plug some budget holes without admitting it.

Now comes the allocation part. We make everybody dependent on the system: patients for their care, doctors for their livelihood, so everybody is in a cooperative mood. An inspiration from a consummate politician named Bismarck, also implemented by Lenin and Stalin. Is there any other way than promising “universal care” that politicians could get away with cutting hundreds of billions from expected Medicare expenditures?

We let politicians off the hook by delegating the key decisions to an appointed Federal Reserve-like agency.

We set up a “fair,” “evidence-based” system, with the apparently laudable goal of improving the overall health of society. No discrimination of course–“disparities” are to be eliminated.

Remember, however, that age discrimination is not “invidious.” Every 60-year-old was once 20. The “complete lives system” (a.k.a. “Reaper Curve”) favored by Ezekiel Emanuel is by this logic completely fair.

Here is what it means: people over age 65 would get 3.4 times less care than a 50-year-old. At present, however, spending on people over age 65 is about 3.1 times higher than for 50-year-olds (Uwe Reinhardt, Health Affairs November/December 2003). Under the Emanuel system, older people would get only about one-tenth as much care as they do now [1/(3.4 x 3.1)].

The elderly would not all be cut off at once. They would simply be placed in an overloaded boat with everybody else, with lower-priority people pitched overboard–one at a time.

No death panel is needed. The system simply ratchets down doctors’ pay to the minimum they will tolerate, then punishes those on the top end of the spending curve. It will know who they are because of intense electronic monitoring of everything. Rational rationing–“equitable redistribution”–will occur.

Key words include “universal” and “consensus.” With “everybody in, nobody out,” social hydraulics will occur. Pull one lever at the top, and everybody beneath it is complicit in the “hard” decisions.

Default? No, no. Just a change.