What about the elephant in the Committee chamber?

Although it is emotionally appealing to emphasize the problems of poor Americans who lack health insurance, everyone concerned with health-care reform knows that what really screams for reform is Medicare. It has never been actuarially sound, and in the manner of a Ponzi scheme it relies on new payroll taxes from non-beneficiaries to cover expenditures for mostly retired beneficiaries. The Ponzi scheme is projected to fail within 6 to 7 years, whereupon Congress will have only 2 realistic alternatives: Radically cut benefits (or beneficiaries) or cover the perpetually growing gap between payroll tax revenues and expenditures out of general revenues.

Medicare is said to be abused by fraud (something like $50 billion per year) and overuse of medical facilities and procedures. The fee-for-service scheme biases consumer and provider incentives to ignore cost considerations in medical care choices. For that and other reasons, Medicare expenditures per beneficiary are increasing at a much higher rate than inflation, with no end in sight.

In the Congress 4 health-care reform bills have been passed by committees and a 5th and 6th have been drafted in the Senate Finance Committee. Yet in none of these bills is the core Medicare problem (that it is financially unsound and heading for a cliff) addressed. Worse, the bills envision diverting some $50 billion per year or so out of Medicare revenues to be applied to non-Medicare uses! The many other deficiencies of the Medicare system are addressed with only nominal or token “reforms,” whose impact cannot be quantified. Copays to many beneficiaries are to be reduced or eliminated, exacerbating the acceleration of Medicare expenditures. Medicare in its entirety is a creature of the Congress; it is on the verge of financial failure; and nothing is being done to fix Medicare in the half-dozen health-care reform bills. Do you intend to support the plans of the President and the Congressional leadership to leave Medicare accelerating toward the financial cliff?