Archive for Thursday, August 3, 2006

Medicaid return

August 3, 2006


To the editor:

Matthew Hisrich, from Flint Hills Center for Public Policy, wrote "that all the creative financing in the world will not transform Medicaid into a sustainable program" ("Medicaid woes," July 24 Public Forum). I believe Hisrich is suggesting that Medicaid is a failure and is a misuse of public funds, citing the return of Kansas Medicaid money as the tip of the iceberg.

Many government funded programs are not solely concerned with sustainability. Our highways are not sustainable without millions of state and federal dollars. Our roads, our food, our gas, are all subsidized and are not sustainable commodities for the individual person without subsidies.

Medicaid, like the highway system, is a partnership between the federal and state governments. Medicaid is an essential and successful federal/state program that improves the health of over 50 million Americans and is extremely cost-effective in its operation.

Without Medicaid, the 50 million Americans who are now insured, become uninsured. Where do uninsured go for health care and who pays for it? Many go to emergency rooms, and taxpayers pay 85 percent of uncompensated care, more than $40 billion a year.

If we are paying for health care one way or another, why not do it in a way that provides access to primary and preventive services that help avoid more costly interventions such as hospitalizations?

The Kansas Health Consumer Coalition is working towards improved access and affordable health care for Kansans. Medicaid is a vital part of this formula.

Laurie Dale Marshall,

director, Kansas Health

Consumer Coalition,



Richard Heckler 11 years, 8 months ago

Medicare/Medicaid are well managed programs. Among the best of goevernment operations. When politicians want to privatize an aspect then they begin a constant barrage of negative attacks many of which may not be true. It's called character assassination of a program with corporate profiteers behind the scenes. Too often politicians are not our best source of information. Medicare/Medicaid could very easily be the tool for National Healthcare thus no reinventing of the wheel=huge tax dollar savings.

erichaar 11 years, 8 months ago

This author's reasoning is flawed. Her argument is that if taxpayers don't foot the bill for health care then taxpayers will have to foot the bill for health care.

Richard Heckler 11 years, 8 months ago

Medicaid and Medicare Cuts: (Almost) Everyone Pays Sam Uretsky

Unless you belong to the select and dwindling group of those with fully employer-paid health coverage-or to the 40-million-and-counting with no health insurance at all-you've probably noticed your health insurance premiums rising at a frightening pace. In 2005, premiums for family coverage rose by an average of 9.2%, six percentage points more than the rate of inflation, according to the Kaiser Family Foundation's Annual Survey Of Employer Health Benefits. The cost of health insurance has increased by 73% since 2000, with an average family plan costing $10,880 in 2005; the average monthly premium contribution paid by employees with family plans rose from $135 in 2000 to $226 in 2005.

There is plenty of blame to go around for rising health insurance costs. But an under-recognized part of the story lies in the shifting of costs from public to private insurers. This May, Premera Blue Cross, a Washington state insurer, released a study of public versus private reimbursements to hospitals and doctors. The study found that "employers and consumers are paying billions of dollars more a year for medical care to compensate for imbalances in the nation's health care system resulting from tight Medicare and Medicaid budgets" and pointed to "a rapid acceleration in higher costs to private payers in Washington state, for example, as hospitals and doctors grapple with constraints in the federal health insurance programs," as the New York Times summed it up.

The Premera study found that in 2004, Washington state hospitals had losses of 15.4% for services to Medicare beneficiaries, compared to profits of 2.9% for these services in 1997. Over the same period, hospitals' profit margins for patients with employer-sponsored health plans rose, from 5% to 16.4%. As the report put it, "This phenomenon can be thought of as a cost shift from the public programs to commercial payers. That is, if Medicare and Medicaid had paid higher hospital rates, commercial payer rates could have been lower with hospitals still achieving the same ... operating margins." The study found a similar trend for doctors' offices. Medicare pays physicians 25% to 31% less than private insurers do in Washington, and Medicaid pays about 30% less than private insurers for children's office visits and up to 54% less for adults' office visits.

What accounts for this sharp reversal? The simple answer: the Bush tax cuts. In 2001, Bush inherited a 10-year budget surplus of around $5.6 trillion, according to Congressional Budget Office projections. "We can proceed with tax relief without fear of budget deficits, even if the economy softens. ... The projections for the surplus in my budget are cautious and conservative," the president claimed.

more on this story:

KsTwister 11 years, 8 months ago

"Don't blame Medicaid woes (like everything else) solely on GWB"
Why not?

Richard Heckler 11 years, 8 months ago

An example of misinformation regarding a well run government program:

Has the president actually lied to the public about Social Security?

Yes. President Bush has repeatedly said that those who put their money in private accounts are "guaranteed" a better return than they'll receive from the current Social Security system. But every sale of stock on the stock market includes the disclaimer: "the return on this investment is not guaranteed and may be negative"--for good reason. During the 20th century, there were several periods lasting more than 10 years where the return on stocks was negative. After the Dow Jones stock index went down by over 75% between 1929 and 1933, the Dow did not return to its 1929 level until 1953. In claiming that the rate of return on a stock investment is guaranteed to be greater than the return on any other asset, Bush is lying. If an investment-firm broker made this claim to his clients, he would be arrested and charged with stock fraud. Michael Milken went to jail for several years for making just this type of promise about financial investments.

In fact, under the most likely version of the Bush privatization proposal, a 20-year old worker joining the labor force today would see her guaranteed Social Security benefits reduced by 46%. Bush's own Social Security commission admitted that private accounts are unlikely to make up for this drop in guaranteed benefits. The brokerage firm Goldman Sachs estimates that even with private accounts, retirement income of younger workers would be reduced by 42% compared to what they would receive if no changes are made to Social Security.

President Bush also misrepresents the truth when he claims that Social Security trustees say the system will be "bankrupt" in 2042. Bankruptcy is defined as "the inability to pay ones debts" or, when applied to a business, "shutting down as a result of insolvency." Nothing the trustees have said or published indicates that Social Security will fold as a result of insolvency.

Until 1984, the trust fund was "pay-as-you-go," meaning current benefits were paid using current tax revenues. In 1984, Congress raised payroll taxes to prepare for the retirement of the baby boom generation. As a result, the Social Security trust fund, which holds government bonds as assets, has been growing. When the baby boomers retire, these bonds will be sold to help pay their retirement benefits.

Richard Heckler 11 years, 8 months ago

If the trust fund went to zero, Social Security would simply revert to pay-as-you-go. It would continue to pay benefits using (then-current) tax revenues, and in doing so, it would be able to cover about 70% of promised benefit levels. According to analysis by the Center for Economic and Policy Research, a 70% benefit level then would actually be higher than 2005 benefit levels in constant dollars (because of wage adjustments). In other words, retirees would be taking home more in real terms than today's retirees do. The system won't be bankrupt in any sense. On this point, President Bush is "consciously misrepresenting the truth with the intent to deceive." That is what the dictionary defines as lying.

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