TheMillerCircle.org

The Republicans have an intense dislike for Federal programs that support a social contract. They realize that once a Federal program is adopted, such as Social Security or Medicare, it becomes extremely popular with the public, particularly when you look at the conditions of Americans before those programs went took hold. George W. Bush was unable to turn his early 9/11 popularity into a mandate for the privatization of social security; you can see how our recent economic history has vindicated those who opposed his actions and kept the program intact. But the Republicans don’t ever stop trying to nibble away at Social Security by making claims that it will run out of money in ten, twenty, thirty or forty years down the road. You can ask yourself why we never concern ourselves about long-term budgets in almost any other program except Social Security and Medicare. Do we ever project the military budget for a period of time longer than a year? Recently, a report on the Social Security system projected that the fund would run out of assets in 2037,  four years earlier than previously estimated. A more dire projection emerged for the hospital fund of Medicare which will be drained by 2017.

Of course, it is silly to think about the future of these two programs during a major recession, especially one of the magnitude we are currently going through. An economic recovery in the future will help to restore the dip now visible on the distant horizon.  One of the people I always turn to about the status of Social Security and Medicare is former labor secretary under Clinton, Robert Reich who has his own blog and comments regularly on public policy issues. He is currently a professor of public policy at the University of California at Berkeley.  Reich was once a trustee of the Social Security system and was thus knowledgeable about the model used for projecting the future of the program and, of equal importance, the assumptions that went into the model. As he points out, the model for economic growth, an essential element to future projections, assumed an annual economic growth rate of 2.6%. But, looking back through history, going all the way back to the Civil War, the annual economic growth rate was consistently closer to 3%, which has a huge impact on future projections for Social Security. Using the 3% model makes Social Security flush for the next 75 years. The other factor not taken into account was the impact of a much higher than anticipated wave of immigration into the U.S.  Since these immigrants tend to be younger, they will not be a significant drain on the big bolus of baby boom retirees moving into their retirement, but will instead be contributing into the Social Security fund during the pulse of baby boomers as they transition through the system. Even if Social Security runs into problems in the future, an easy fix for projected deficiencies would be to either raise the maximum wage for social security taxation (now a little more than $100,000), generate a slight increase in payroll taxes,  delay the age of retirement or invoke means testing: none of these would be popular and the chances are that they won’t be needed.  More importantly, none of these changes need to be gigantic to  fix the problem in the foreseeable future. In other words, no matter how the variables come down, it appears that sensible projections about our economic future make Social Security a safe bet for now and well into the future. The alarms about Social Security and its future are much ado about nothing. They are largely sounded out by people who want to dissolve all elements of commitment to a social contract. They are the same people that whittled away at the regulatory controls whose absence led to our economic collapse. You might notice in chromosomal maps of these people that the thirteenth gene is abnormally shaped into the letter “R.”

While Social Security is a tiny problem, Medicare is a giant one, because of the rapidly rising costs of our badly broken health care system.  In addition to its shear expense, our medical care system ruins lives in other ways: more than a million declared bankruptcies reported every year are created by medical bills that cannot be paid. The way to contain Medicare is develop a better system of cost control, with the recognition first and foremost that the privatization of our health care system is one of the major factors leading to rising health care costs and projections. It is disgracefully inefficient to have a health care system where profits are maintained at obscenely high levels by weeding out those from the system that are in the most serious need of medical care. Who else on the planet tries to formulate a health care plan for its citizens, with corporate profits as its top priority? Michael Moore’s movie “Sicko” comes very close to describing the daily tragedies that people go through when they need health care and find that it isn’t there for them. We have to decouple health insurance from employment and reduce the obscene profits of the health care industry. My colleagues who work on these problems tell me that the private health insurance industry tacks on about 30-36% of its charges as administrative overhead. In contrast, Medicare comes in at 4% administrative costs. Under the Bush administration, when Medicare patients were given the option of going outside of the Medicare system to promote more “privatization,” the costs per patient went up considerably. This practice has got to stop.

I agree with Obama, that our economic recovery will be linked to our capacity to reduce health care costs as a growing percentage of our GDP. The sooner the better. But, I disagree with him on how to get there. I believe that a program of “Medicare for All” will be the easiest one to technically  initiate, since we already have a sizable portion of our population on that program. While technically the easiest plan to initiate, it appears to be politically the most challenging of all the options so far discussed. And some Democrats in the Senate, such as Max Baucus, will be among the most resistant to a single payer plan like the expansion of Medicare.  But, just adding in young people (under 30) into Medicare would be comparatively cheap, because they use our health care facilities at a much reduced rate. With that achievement under our belt, we could then work on getting the people in between adequately covered, including the 48 million that presently lack health insurance. Incidentally, the majority of those people who don’t have health insurance are employed workers, who either can’t afford the premiums involved, or their employers don’t provide insurance because their employment is contractual and not subject to an insurance provision. One of the major benefits of a single payer health care plan is further justified on the basis of health care rationing. If we ever need to ration health care, such as the elimination of diagnostic procedures that don’t produce a benefit, then having everyone under the same health care plan will make the process of rationing seem fair and transparent: it will happen to everyone at the same time and to the same degree.

Analysis of our health care system has revealed that the government, in 2005, was already providing 60.5% of total health care spending which was then 9.7 per cent of our GDP. In contrast, the highly successful single payer plans of Canada and the UK were, respectively, at 6.9 and 7.2 percent of their GDP.  And, those countries don’t have 48 million citizens without access to medical care. Couple this to the fact that the National Academy of Sciences has estimated that 18,000 or more citizens die each year because they do not have access to health care and you have the outlines of a nightmarish health care system. If you want to read further about how much we already pay for health care costs without getting true health care, I suggest you read an article published in <em>Health Affairs</em> by <a href=”http://content.healthaffairs.org/cgi/reprint/21/4/88″> Woolhandler and Himmelstein</a> entitled<em><strong>”Paying for national health insurance and not getting it.”</strong></em> Although you might think that the American health care system is deservedly the pariah of the planet, believe it or not some countries are beginning to employ an American like model for a private insurance alternative. So, by fixing our own health care system, we might also be saving much of the rest of the planet from using a model that would normally be a robust form of health care insanity. We are not just talking about medical care here.  We are also dealing with public health policies, because those without insurance become repositories of communicable diseases that don’t get treated in a timely manner. The way we arrived at the health care system we have today was through the incrementalism built into our brains that allowed us to adjust to small changes, but not to big ones.  If you presented the health care system we have today, all at once, in a single package, not a single American would favor such a system, except those at the top that reap $ billions in profits based on excess charges and the elimination of those in need of acute medical care. Obama’s mission is to present our health care system like it would start tomorrow with the intention of shocking Americans into understanding that what we have been living with is nothing less than an aberration we call health care, better designed to break the backs of our enemies rather than treat our own citizens.

RFM