The Pauper Option
Costs of a government-run health-care program modeled on Medicare will likely be extraordinary.
12:00 AM, Apr 15, 2009 • By JEFFREY H. ANDERSON
So, while the costs of American health-care have increased greatly in recent decades, such costs haven't, by any stretch, increased evenly across the board. Since 1970, the cost of all health care in America apart from the two biggest government-run programs has not even doubled versus GDP. Over that same span, Medicare's cost versus GDP has more than quadrupled.
And yet the president and the Democratic Congress want to adopt more Medicare-like programs to cut costs?
Given the way that Medicare's costs have been kept in the dark, even a simple cost-to-cost comparison is illuminating: Since 1970, the cost of Medicare has risen almost two-and-a-half times as much as the cost of all health care in the United States apart from Medicare and Medicaid--the vast majority of which is run by the private sector. Since 1970, Medicare's per-beneficiary costs--even without counting the prescription drug benefit--have risen 50 percent more than our overall per-capita national health expenditures aside from Medicare and Medicaid. They have risen 8 percent more since the year 2000 alone.
But the truly amazing thing is this: Since Medicare's costs continue to rise exponentially, they are just beginning to embark on their spectacular path into orbit. Medicare's costs are projected to rise more in the next decade than they have risen in the previous four decades combined, reaching $1 trillion annually--after which, they are projected to rise still faster. And with the baby boomers retiring, the number of workers per beneficiary will drop within two decades from today's figure of just under four, to merely two and a half. As a result, far fewer and fewer people will bear far higher and higher costs.
Perhaps most dazzlingly of all, the United States now has $55 trillion in projected unfunded federal liabilities over the next 75 years. That's money we've already pledged to spend but which our projected budgets don't cover and which we have no plans for how to raise. Much of that is for Social Security or payments on the national debt--both of which pose massive challenges. But the vast majority of that figure--about $34 trillion of it--is for Medicare. To put $34 trillion into perspective, it's twice the size of the annual economic output (as measured by GDP) of Germany, Japan, Italy, Russia, Canada, France, and the United Kingdom--combined.
That's our future financial liability without adding to Medicare, and without adding another program like Medicare.
One wonders how the President and the Democratic Congress can possibly think that adding a new Medicare-like program is the way to reduce our health-care costs, or to make us more financially solvent as a nation. Perhaps they haven't seen the numbers. Or perhaps the allure of further centralization and consolidation of power in Washington under their control is just too tempting for them to resist.
Either way, Dr. Obama needs to find a new cure for his patient's affliction with soaring costs. If not, the American people should sue him for gross negligence and pursue a different course.
Jeffrey H. Anderson was the senior speechwriter for the U.S. Department of Health and Human Services and is a former Political Science professor at the U.S. Air Force Academy.