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Cutting Health Budget NOT Same as Cutting Costs

Posted Dec 12 2009 12:00am

It is easy to cut budgets.  Not easy to cut real costs. Congress is looking for ways to pay for its expansion of medical coverage for the uninsured and underinsured. Their assumption is that most of those who are uninsured could not afford any premium payments for medical services.  They plan to pay for their plan with taxes on select groups (small businesses, the wealthy, etc.), by cutting Medicare spending and by an assortment of fees and surtaxes, such as the proposed 5% tax on cosmetic surgery procedures.  The problem with all of this is that it requires assumptions on the part of those writing these bills.  Remember, most of those actually writing these bills are 20 and 30 something staffers, not the Senators and House members themselves.  Most of these staffers have degrees in political science, social science and law. Most have never run a business, met a payroll or indeed done much of anything other than get paid by the taxpayers to do the bidding of the elected, who also feed at the public trough.

First, there is the assumption that those uninsured cannot afford to pay for insurance.  The uninsured, which number about 30 million CITIZENS, are made up of young, healthy singles and couples who CHOOSE not to spend any disposable income on health insurance, but often have the latest video device, cell phone or xBox; those who have lost jobs, and have failed to pay their COBRA premiums to maintain their employer based coverage while they look for employment, despite recent federal efforts to cover a large part of that premium (up to 75%); the truly needy, who cannot afford private coverage, but make too much money for Medicaid; those who are dysfunctional in that they qualify for Medicaid but do not take the time to even apply and get enrolled.  The solutions here are quite obvious: health insurers need to write basic, no frills policies which cover catastrophic illness and basic wellness (vaccinations and check ups); individuals need to take responsibility to actually buy health insurance or enroll in Medicaid.  No need for massive government programs here.

Second, there is the plan to selectively, target taxes to businesses and individuals with upper incomes, while allowing 98+% of the population to avoid any contribution to what is to be a national solution.  This is classic ’soak the rich’, leftist philosophy.  Sadly, as is always the case in a market economy, when there is a downtown, those inclined to socialist thought take advantage of the opportunity to advance their beliefs, discredited beliefs we think, based on the history of socialism in Europe and elsewhere.  This form of payment still divorces the majority of the citizenry from the economic realities of the program being foisted upon them.  All need to be included in any plan to pay for such an expansion of federal reach.

Third, surtaxes and fees on such things as cosmetic surgery are punitive.  They assume that only movie stars, high paid models and the rich and famous actually use cosmetic surgery services. The fact that these elective procedures, including teeth whitening, are generally not paid for by private insurance, Medicare or Medicaid, should be sufficient.  It is estimated that the majority of cosmetic procedures are performed on women that earn between $30,000 and $90,000 a year.  Hardly the polo club set.  This tax represents a dangerous foot in the door to justify actions by the federal government to decide what procedures are or are not “necessary” and what should or should not be paid for (and what should be selectively taxed).

Fourth, the now famous, or infamous, nearly $500 billion in “savings” Congress plans to achieve by cutting fraud and abuse in Medicare spending.  Be our guest.  No serious observer believes that there is this much fraud and abuse to be cut.  Yes, there is fraud, but CMS and HHS seem to be willing to merrily go along with paying out millions of dollars of fraudulent claims because they are too inept, lazy or derelict to deal with the problem.  They know where the fraud and abuse is and yet they are very late to the game in catching it.  Legitimate practitioners and facilities, have inspections, licenses, re-inspections, certifications and the like.  Get the idea.  Almost all realistic opinions believe that to achieve this much in “savings” from Medicare there will need to be major cuts in services.  Just this year, 2010, the Medicare monthly base fee rose from around $95 to $110.  That is not inclusive of surcharges on those making higher incomes (again essentially a punitive tax on what is supposed to be an insurance premium).

Finally, the wheel and deal style the Democratic leadership has embraced may in the end be their undoing or at least present major hurdles.  Promising everything to everyone and every group while expecting a minority to pay for it is a recipe destined for discord, disunity and potential failure.  It did not have to be this way.  Real, meaningful, substantive health reform was and may still be within our grasp.  However, the current leadership in Congress only knows the back room style of debate.  We remain hopeful, but optimism is fading.  Come on folks, we can do better than this . . . obi jo and jomaxx

Finding the Nerve to Cut Health Costs – http://www.nytimes.com/2009/12/09/health/policy/09leonhardt.html?emc=tnt&tntemail0=y

Botax? Nip/tuck levy to help fund health plan – http://www.msnbc.msn.com/id/34048874/ns/health-health_care/

Deals cut with health groups may be at peril – http://www.washingtonpost.com/wp-dyn/content/article/2009/12/05/AR2009120503235.html

Budget Hawks Have a Buffet of Options With Health Bill – http://www.nytimes.com/2009/11/25/health/policy/25leonhardt.html

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