The HS Dent Financial Blog

RSS      

Fiddling (Around) While Rome Burns

I want healthcare reform, or insurance reform, or whatever it is we want to call it.  I want a system that doesn’t require me as an employed, well compensated person to pay five figures for “insurance,” knowing all the while my coverage will be canceled if I ever dared to use it beyond the normal child afflictions like Strep throat and a broken arm.  I want a system that doesn’t send me an Explanation of Benefits (EOB) form six months later that requires a decoder ring to figure out, but then the same company who sent it to me won’t discuss anything on it because of some idiotic interpretation of HIPPA law.  I want a program that makes sense in terms of who gets paid, what they get paid, and how they get paid.  I want transparency.  I want a system that doesn’t have two, or three or four, different charges for the exact same procedure depending on your association (insurance company, self pay, etc.).  I also want a system that makes financial sense.

Both the NYT and the WSJ ran articles this morning concerning polls about healthcare.  Respondents say they don’t understand what they are being asked to support, so while there are significant supporters and detractors, the largest group is undecided.  The reason they, or rather we, are undecided is because we are being lied to so consistently that no proposal put forth so far seems to get at the underlying issues. 

I think most people actually want some sort of movement on this.  I also think most people want to have this sticky issue handled by the people we sent to Washington to do just that.  But it’s not to be.  Instead, they are fiddling around, trying to put tough decisions in a better light, making each proposal sound like sunshine when we all know the truth.  There are ugly, gut-wrenching decisions ahead.  It’s time our politicians acted like adults about the financial realities we face.

Medicare is broke.  It is running a deficit.  There are no questions about this.  There is no debate.  And yet, we seemt to be moving backwards.  Yesterday the House voted to stop an increase in Medicare costs to recipients.  The reason for not charging the increase is because Social Security benefits will not go up next year as inflation has remained soft, and since the two are netted (medicare premiums are subtracted from Social Security checks), any increase in Medicare costs would have caused some recipients to actually see a decrease in their Social Security checks.   I understand the thought process, but not the decision.  We are shielding a group from bearing the cost of the exact program in which they participate.  This points out three issues - we have no fortitude for the difficult financial decisions of charging more when costs go up, we have no mechanism for controlling costs even though this is a huge component touted as “paying for” a new program, and finally, how can costs go up when inflation was flat to negative?  Obviously our inflation measures are flawed.

The CBO has repeated its analysis that the new proposals being put forth will add over $200 billion to the US budget, even though they are touted as deficit neutral.  This is the same office (the CBO) whose job is, as best it can, figure out the financial impact of legislation with no political bent.  Do we believe the CBO, or the varied political interests that keep telling us not to worry?

As noted above, we are told that there are immense savings to be had by simply seeking efficiencies in procedures and delivery in the current Medicare system.  If this is true, why are we not passing separate legislation to go after these savings right this minute?  It would seem logical that such a bill would pass easily, leaving the thornier issue of what benefits to provide to whom, and how to legislate care, to another day after we figure out just how much in savings we have to apply to such things.

The last piece of craziness in this whole issue, at least for me, comes from the right side of the aisle.  The party of fiscal responsibility became the party of fiscal reprehensibility.  I’m not sure that’s a word, but it’s what I mean.  After years and years of profligate spending (and conservatives don’t have a corner on this market), the conservative movement in Congress has reached a pinnacle of bizarre behavior by championing the preservation of Medicare benefits even though every single analysis shows that these benefits will bankrupt the nation.

 To get at “efficiencies” and “savings,” there must be some system to limit care.  It is a simple, powerful, awful notion, and I like to believe that everyone knows this to be true.  What also seems true is that no one wants to limit their own care.  That seems pretty easy.  But when payments come through a transfer system where we tax one group to extend benefits to another, there must be some mechanism for limitations on the benefits.  The fact that such a mechanism has not been in place doesn’t mean it is not necessary, it means that we were rich enough in income, blind enough to deficits, and small enough in the number of recipients to be able to push off such difficult decisions to another day.  That day has come.

I pointed out in a previous post that the US Postal Service is bankrupt.  Yesterday an emergency measure to allow the USPS to forgo a payment to its pension system ($4 billion) so that it wouldn’t go under.  Right now our elected legislators cannot get the financial house in order for a system that is clearly a payment for service model with no intermediaries.  Their fix is to put off financial responsibility for another day (after 2017 for this pension payment).  If they can’t manage this system, how are we to believe much of what we hear on healthcare? 

No wonder we don’t understand what we are being offered.