October 24 2011
Super Committee Should Avoid Health Entitlement Glut this Thanksgiving
It’s hard to believe the Thanksgiving holiday is only one month away. It’s not yet time to buy the turkey, but for the Super Committee, time is ticking. Their task is to deliver recommendations on deficit reduction by Thanksgiving.
A quick Google news search will show headlines like “Super Committee Gets an Earful” or “Lobbyists, Special Interests Swarm Super Committee.” According to Politico, more of these lobbyists hail from the health care industry than any other.
Of course there are many health care companies with an interest in the policies that affect health care in the U.S. Our government, through taxes, regulations, and massive entitlement programs, is deeply entrenched in our country’s health care system.
But this isn’t healthy, especially when we consider the future impact of current health policy and federal health care entitlements on the budget. Without major changes to Medicare and Medicaid, any smaller cuts the Super Committee suggests will be comparatively inconsequential.
They should start by repealing the Affordable Care Act – President Obama’s wrongly named health reform package. This law will do nothing to lower health care costs for individuals, families, or the government. It may lower per-capita spending on Medicare through the Independent Payment Advisory Board, but cuts made by the IPAB will create winners and losers rather than putting seniors in charge of their own health care.
The ludicrousness of the Affordable Care Act’s funding scheme can be seen clearly in the recent failure of the CLASS Act: Government-controlled health care is such a bad deal, a mandate will be necessary to force Americans to buy into it.
While repeal of the ACA (or “ObamaCare”) isn’t likely given the current political landscape in DC, there are other ways the Super Committee can improve health policy and reform the ponzi-scheme structure of Medicare and Medicaid's flawed funding scheme.
Many Americans don’t understand that currently the Medicaid federal-state “partnership” encourages states to spend more and more money because the federal government will match their spending on the program (at a rate that varies by state). Furthermore, the expansion of Medicaid under the ACA will take states in the wrong direction, meaning Medicaid will take an even bigger portion of their budget, and they will have even less control of the program. Medicaid should be block-granted to the states, to allow states to choose how to prioritize and limit their Medicaid spending without the perverse incentive of federal matching.
And as for Medicare – the time for name-calling and political usury of Grandma is over. Americans of all ages know that reform is needed, because it’s not feasible for a program to pay out three or more times what it takes in. We could move to a defined-contribution model, introduce competition from the private sector, and give seniors more options all at once.
There are big reforms that we can make now, and there’s no better time than the present. I’m planning on gaining a few pounds this Thanksgiving, but for the sake of our nation’s budget and our future prosperity, it’s time for government-controlled health care entitlements to slim down. The Super Committee should consider serious reforms to Medicare and Medicaid.