Monday, September 24, 2012

Energion Political Roundtable: Medicare

Question number six is up and it is another pretty broad one!

Here in Florida we’re getting a lot of political ads. One of the key topics in both the Senate race between Connie Mack and Bill Nelson and in the presidential race is Medicare. How would you evaluate the plans that each presidential candidate has for Medicare? Should senior citizens be concerned?

So here is my retort:

What plans?

Neither candidate really has any sort of feasible plan to maintain the Medicare system for the long term because neither one is looking past the next election cycle. What needs to be said, i.e. that Medicare is unsustainable in the current form, is political suicide and few elected officials are willing to say what needs to be said. By any measurement the Medicare system is headed for bankruptcy because there simply are too many people drawing on the system and too few paying in, an inverted pyramid that shows no signs of abating and in fact is rapidly getting worse.

President Obama's "Medicare plan" is basically "my plan is not Mitt Romney's plan" and claims to maintain the status quo, promising to keep the system "solvent" until 2024 (or 2026), or a whole 14 years from now. That means that for me, as a 40 year old, the system becomes insolvent a full decade before I get any benefit from it. Unfortunately I have to keep funding a system that, like Social Security, is a giant sinkhole for me and I have zero say in the matter. It is just one more line item on my paycheck seized by compulsion from me that I receive nothing for in return. Because Democrats rely on the senior vote and essentially buy that vote with the tax dollars of workers they are completely unwilling to even admit there is much of a problem and instead are doubling down on the doomed Medicare system by instituting Obamacare.

At least Mitt Romney's plan has some details whereas President Obama relies on the same warm and fuzzy "hope and change" empty rhetoric that got him elected in the first place and seems likely to sway an ignorant electorate to get him reelected. Romney's plan has some key elements that get short shrift in the media and from the soporific electorate that seems interested only in what they can get for "free" from the government. These include a provision to retain the current system for already in the system and those nearing eligibility and a gradual transformation of the system to a "premium support system" which means "existing spending is repackaged as a fixed-amount benefit to each senior that he or she can use to purchase an insurance plan". In layman's terms that means that rather than a government sponsored insurance plan, the government instead subsidizes seniors and allows them to pick their own plan, with more support for poor seniors and less for more affluent seniors.

Rather than the current system, Romney offers choice and competition, two words that are anathema to the average Federal bureaucrat. That is a far cry from the scare tactics of doom and gloom peddled by the Left but what is left unsolved is the issue of insolvency as more and more seniors rely on a system paid for by a shrinking pool of tax paying workers, workers making less than before (if they even have a job) thanks to four years of catastrophic mismanagement by President Obama. Any system that doesn't tackle the issue of long term solvency is doomed to fail.

Libertarian Gary Johnson has a somewhat different approach focused on block grants to the states that allow them to manage Medicare (and Medicaid) as they seem fit. Unlike a lot of his other positions, this one is pretty short on details but in a nutshell it gets the Federal government out of the health insurance business and sends the discretion for that service to the states. If the government is going to be involved in health insurance, and I don't think that it has any business doing so, it is far better and more important eminently more Constitutional for that to be done at the state level.

As for the second part of the question: Should senior citizens be concerned?

I don't think senior citizens should be concerned at all. As the most powerful voting block they will continue to exert undue influence over the seizing and distribution of wealth in this country and show no signs of letting go or being willing to compromise. The senior population in America has been inundated with messages designed to strike fear in their hearts, fear about health insurance, fear about income replacement, fear about anything and everything and the answer is always the same: let the government take care of you and protect you and in return base yoru votes on who promises to keep the gravy train running no matter what that might mean to future generations. Any perceived threat to this security is met with a swift response from the AARP and other groups, making substantive conversations about desperately needed changes completely off-limits (for an example of this, see the unseemly booing of Paul Ryan at an AARP meeting last Friday for having the nerve to suggest substantive changes).

No, the people who should be concerned are the younger workers, Americans in their 20's, 30's and even their 40's. These are the people who will pay into a broken system for the rest of their working lives only to inherit a bankrupt, dysfunctional system that will be unable to provide the services that they have paid for their entire career. Because they lack a unified lobbying presence in D.C. they are regularly on the receiving end of higher taxes with lower returns. No one seems to care about making younger workers angry, after all they are already jaded and resigned to getting shafted, so it is far easier to keep making promises to seniors that no one seriously believes but reliably brings in the votes.

What ought to concern us all is that we are entering the last days of an election season and we really have to choose between two men who are at heart politicians seeking to maintain the status quo for the benefits it provides them. If it is true that we get the candidates we deserve, then we certainly find ourselves deserving two empty suits. The mediocre quality of these two men should give us pause.

Medicare is the ultimate well-meaning but inherently and fatally flawed endeavour, an attempt by the most fundamentally inefficient organization in America to manage a system rife with fraud, abuse and waste. If that isn't a recipe for disaster I don't know what is! There is certainly no case to be made for Medicare as a legitimate function of the Federal government but that has never stopped politicians from bringing more and more of the economy of the United States out of the private sector where cost, choice and competition exist and into the public sector where programs invariably become bloated and cost exponentially more than was originally promised. The best thing we could do with Medicare is, right now, to start weaning us away from a government run system and toward a market based system. I am under no illusion that will happen but that is what should happen.
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