Medicare: We need to expand it, not cut it!

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Medicare is big news lately. Saving Medicare, cutting Medicare, reforming Medicare. Medicare has become a part of the political right’s effort to roll back all programs that were implemented in the 20^th century to help provide any safety net for Americans. I was going to say “most vulnerable Americans”, but actually many of these are programs for all Americans. The prime examples, of course, are Medicare and Social Security, often seen as the “third rail” of American politics which cannot be touched because they are so wildly popular. They are particularly popular with those who most benefit, primarily seniors who vote in very high proportions. These “entitlements” (a word that is often used by those who oppose them as a negative, but it is not) are considered so core by their recipients that they “forget” they are government programs (as in “keep the government’s hands off my Medicare!”).

So the proposal of Paul Ryan, the chair of the House Budget Committee, to essentially privatize Medicare by giving out vouchers for recipients to purchase private insurance, was heralded as “bold” by many commentators. Perhaps it was, although Ryan himself is backing away from this “bold” stand, as are most other Republicans.  Sure, sometimes “bold” is stupid, leading a charge into impossible odds (“into the valley of death rode the 600[1], but it has the implication of “heroic”, doing the right thing even in the face of certain defeat. Ryan’s plan wasn’t heroic. It was mean and callous and another part of the effort to make sure that our national policies benefit only the wealthiest among us.

The Ryan plan is terrible because it does not ensure health care but (and only in its most positive formulation) insurance coverage – it would provide vouchers to purchase private insurance. But the vouchers won’t cover any reasonable health insurance plan (remember, all health insurance is not good health insurance), certainly nothing compared to the current benefits covered by Medicare. And as any health insurance purchaser (employer or individual) knows, the cost of health insurance keeps going up. When Medicare was passed in 1965, it was because our society finally recoiled in horror at the reality of older Americans, who had worked all their lives, finishing out those lives in sickness and indignity and bankruptcy without health coverage. That need has not changed.

But Rep. Ryan’s plan, designed to gut Medicare, isn’t the only bad one. Senator Joseph Lieberman of Connecticut has proposed raising the age of eligibility for Medicare from 65 to 67, again to save money. This plan was debunked by Paul Krugman (“Medicare saves money”, NY Times June 12, 2011), who cites the work of “… the health economists Austin Frakt and Aaron Carroll [who] document, right now Americans in their early 60s without health insurance routinely delay needed care, only to become very expensive Medicare recipients once they reach 65. This pattern would be even stronger and more destructive if Medicare eligibility were delayed. As a result, Mr. Frakt and Mr. Carroll suggest, Medicare spending might actually go up, not down, under Mr. Lieberman’s proposal.” This is exactly the point I made in the recent blog “The real face of lack of access to health care”, June 19, 2011; not covering people for a period of time doesn’t save money because those people “save up” their health problems for when they are covered, and often need more expensive care.

Needless to say, Senator Lieberman took umbrage and responded with a letter to the Times which did not effectively address any of Krugman’s criticisms. His position was supported by a letter from the Executive Vice President of America’s Health Insurance Plans, the health insurance company trade group. Krugman’s criticism was supported by all the other letter-writers, including Harvard Medical School Professor and former New England Journal of Medicine editor-in-chief Marcia Angell, MD. More recently, in the Times’ “Opinionator” blog, Notre Dame philosopher Gary Gutting (“Medicare facts and convictions”, June 22, 2011) analyzes the method of argument (rhetoric) being used by the “two” sides of the debate, Ryan’s and President Obama’s (accepting Ryan’s concept that these are the only two sides). He decides that the key difference between them is one of beliefs, not data; that is, what you believe is the right thing or the way to do things determine how the problem should be addressed, not the facts, which seem to Gutting not to be really where the disagreement lies. “We can and should argue about convictions,” he says, “but this can seldom be done fruitfully in the context of specific policy disputes.  Once we’ve pushed the debate on Medicare or any other policy matter to the point where convictions become the sole basis of disagreement, it is time to vote.”

I agree that the issue is one of convictions, or belief systems. It is about whether we want to live in a society where there is come collective social responsibility or a society in which everyone is on their own.  Republicans tend to state their convictions in the language of “big government is bad”. As an abstract concept, this can resonate with working people who are struggling to support their families and feel that their taxes are too high. But this misses the fact that only through the action of government can the collective interests of the vast majority of us begin to have any weight against the vast wealth of those who fund Ryan and his colleagues (well, for some of us there are unions, but there is a nationwide campaign, well-funded by a few billionaires such as the Koch brothers, to gut any strength they have; “exhibit one” being in Rep. Ryan’s home state of Wisconsin). The Supreme Court has been a huge enabler of this movement through its decisions in Citizens United, making corporations “people” with unlimited ability to use their money to influence the political process, and the recent Walmart sex-discrimination suit in which they have severely restricted the ability of regular people to join cause to oppose those big corporations through class-action lawsuits.

The critical flaw in all of these discussions is that the core issue for Medicare is financial: that it costs too much and those costs need to be controlled by some means – whether privatization (Ryan), increasing the age eligibility (Lieberman), finding fraud (whether real, as the organized crime groups stealing billions of dollars for completely fake claims, or inadvertent minor mistakes made by doctors and hospitals “uncovered” by bounty hunters), or some other plan. Yes, it is true that the costs of Medicare are rising, maybe too high (depends on your “convictions”), and it is likely, under its current funding mechanism, to go bankrupt. This, however, is not a problem with Medicare but rather with health-care costs overall. They are rising, in this country and all over the world, as the availability of new technologies allow us to do many more things – very expensively.

 As Krugman points out, relative to other forms of health coverage Medicare is cost-effective, with much less overhead than the private sector. Cuts to Medicare alone only limit the access of those non-high-income seniors who are dependent upon it and skirt the need to address rising medical care costs. Indeed, the ways to do that (having boards that can evaluate the evidence to permit Medicare to pay only for effective procedures; limiting insurance company and drug and device maker profit; reducing the enormous payments to the highest-income medical specialists and to many specialty hospitals) have been opposed by those same colleagues-of-Ryan who propose cutting benefits to the elderly.

Rather than raising the eligible age for Medicare, or providing vouchers to buy private insurance, the right answer, fiscally as well as morally, is to expand Medicare to include everyone. It would decrease costs as people no longer put off early diagnosis, prevention and treatment. It would allow, through a single insurer, regulation of the excessive costs addressed in the paragraph above. Sure, it would cost the government more, but most of that would be covered by the money currently going to buy private insurance, and the waste engendered by the administrative structures of providers seeking to get paid and insurers seeking to avoid paying (see A Modest Proposal: Bribe the Insurance Companies, August 23, 2009). And a rise in taxes, not for most people but for those wealthiest who saw their taxes cut in the Bush years by trillions of dollars so that now the top tier and biggest corporations pay less than 15% in taxes, way lower than the middle class.

If someone complains that they do not have enough money to feed and house their children, most of us would at least feel sorry for them. But if we then find out that the reason is because they are spending almost all of a good income on alcohol, drugs, and gambling, that sympathy pretty much disappears. As a society we have done the same thing. We have dropped tax rates, especially on profits from stocks (capital gains) and bailed out the financial industry so their titans would not lose much on their gambling debts. This has led to millions of job losses and home foreclosure – people not having enough money to feed their food and children. We need to fix it, and use that money to provide health care for our people rather than profits for the gamblers.

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[1] Tennyson, “The charge of the light brigade”, 1854.

Perception and reality of economic inequality

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We see a lot written about how political views in the US are very polarized. As an example, the April 17, 2011 “Doonesbury”, portrays Donald Trump bragging that he is polling 41% against President Obama and is not even running yet; the interviewer, Mark, replies “It’s a divided country. Virtually anyone who’s not Obama gets 40%. My mailman could get 40%.” The idea is that we cannot reach accommodation because we have such different basic understandings, “belief systems”, “worldviews”.

Certainly this has been the case in Congress, although recently, in passing a budget for the remainder of FY 2011, there were actually some Democrats and Republicans voting on the same side. It is important, however, to note that the Republicans who voted against the budget condemned those who did precisely because they did not hold rigidly and intransigently to their positions, even if, as in the case of Congressman Paul Ryan’s budget proposal, those positions are based in mythological faith rather than in data. Paul Krugman, (“Who’s Serious Now?”  April 16, 2011, writes that Ryan’s proposal was “In fact, it was a sick joke. The only real things in it were savage cuts in aid to the needy and the uninsured, huge tax cuts for corporations and the rich, and Medicare privatization. All the alleged cost savings were pure fantasy.” The threat to Medicare is critical, given both the role that health reform, ACA, “Obamacare”, has played as a touchstone of evil in the fantasy world of Ryan and his party, and the real loss of healthcare, along with their jobs, faced by so many Americans.

A lot of people wonder how it is that such a large portion of the US population, can support Republican proposals that are so obviously about increasing the financial benefit to the richest Americans while hurting most everyone else, including, obviously, most of those supporting the Republicans. Are they selfless advocates of big money, such that they are willing to sacrifice their own interests to aid the least needy? Do they truly believe that each of them, despite the mathematical odds, has a good chance of becoming part of that select group? Are they stupid? It may be that either or both of the last two are true, but the first, unsurprisingly, is not. This is demonstrated in a very interesting study by Michael I. Norton, of the Harvard Business School, and Dan Ariely, a psychologist from Duke, recently published in Perspectives on Psychological Science.

In “Building a better America: one wealth quintile at a time”[1], Norton and Ariely present a large (5522) random sample of Americans three pie charts showing possible distributions of wealth among income quintiles as possible ideal models. One is equal: 20% in each. One is less equal and is in fact the distribution of income (not wealth) in Sweden The third is the distribution in the US. (That the second one is not in fact the wealth distribution in Sweden is not really important here; it could be called “Mars”; it is just an intermediate distribution).  About equal percents chose the “equal” and “Swedish” distributions, 77% preferred “equal” to the US, and 92% preferred the Swedish to the US. Given that people were told to assume that they had a random chance of themselves being in any quintile in any of the distributions, the preference for a more equal distribution may be unsurprising; indeed it suggests that more than half of those in the top quintile are less selfish and would support a more equal distribution of wealth. This, by the way, is consistent with a report by CBS news report from April 17, 2011 “The US Tax code: a ‘huge convoluted mess’”, in which several multi-millionaires argue against the idea that “…the rich can't afford higher taxes.“ One says “Every time I get a tax cut, I get richer…‘I don't buy one thing that I don't already have. I don't put money back into the economy. I just get richer.”

An even more interesting part of Norton and Ariely’s study involved asking their subjects what they though an ideal distribution of wealth among Americans should be and what they thought it actually was.  While their ideal was not “equal” – it assigned over 30% to the highest quintile and just over 10% to the lowest –it was much more equal than their perception of the actual distribution, which had the top quintile having nearly 60% of the wealth, and the lowest quintile only about 2%.

But, as the figure shows, their estimates were way off; in actuality the top quintile has 84% of the wealth, the third (middle) quintile well less than 5% (not much more than their estimates gave to the lowest quintile), and the two lowest quintiles are not even visible on the graph, with a total of 0.3% of the wealth. More important, there was little difference between various groups such as men and women, income levels (<$50K, $50-100K, >$100K), or whether they had voted for Bush or Kerry in 2004 (the data was collected in 2005). All groups felt that the ideal wealth distribution should be significantly more equal than they believed it to be, and all groups believed it to be far more equal than it actually is.  

Norton and Ariely express the hope that this study will inform public policy creation; that by showing that the American people are much closer together in their vision of a just distribution of wealth in society than are the politicians and pundits we hear so much from, there is a chance of reaching some greater consensus in terms of economic policy. This hope is endorsed, from several different perspectives, by the 4 commentaries that accompany it in the same issue of the journal, by Dunn et al (“Consensus at the heart of division”), Tyler (“Procedural justice shapes evaluations of income inequality”), Kagan (“Unclear implications”), and Schwartz (“A new veil of ignorance?”).

So why do we have such divisions? Schwartz notes that “T. Frank (2004) argued, somewhat insultingly, that average Americans are being duped to vote against their real economic interests. But the Norton and Ariely data suggest that people vote against their preferences. How can people be duped to vote against their preferences?” That he can ask this question means perhaps Frank was correct. Kagan beings to get to the answer when she writes “To start with the obvious, precisely because such a huge portion of American wealth is held by such a tiny percentage of individuals, these individuals have an extraordinary interest in maintaining the currently inegalitarian distribution. And unlike the vast majority of Americans, who have so little and thus have so much to gain, this tiny minority has the immense resources to see to it that their interests are carefully attended to by lawmakers.”

Moreover, people do not vote on one issue, even if the issue is their economic self-interest. Indeed, this is what Thomas Frank writes about in “What’s the Matter with Kansas?” Frank says people may vote for candidates because of their stands on social issues (e.g., abortion, gay marriage) rather because of their positions on economic issues. On the other hand, in the recent (2010) elections, we observed a justified anger at the economic situation that led to a massive shift to those who were not in power (the Republicans), who have responded not with plans to increase jobs or equalize wealth but to dismantle all the progressive reforms of the last 100 years; not to get government out of people’s lives, but even more into their bedrooms.

And the economic arguments, as Krugman notes, have tremendous implications for health and health care, given the size of health spending as a portion of our economy. Rep. Ryan’s “solution” for the deficit relies in great part on the restructuring of Medicare to reduce its support for the health needs of American seniors, when indeed what is needed is the expansion of Medicare, as a single-payer, more-controllable, health financing model, to all Americans. Ryan’s attack on Medicare is part of his attack on any semblance of a social contract or social justice, and is part of the continued redistribution of wealth from the less-well-off to the rich.

In the CBS report discussed above, David Cay Johnston, who teaches tax regulation at Syracuse University Law School, notes that  "All the data are overwhelmingly showing that for the last 30 years, we've been redistributing wealth upwards….It's not trickle-down economics; it's Niagara-up!" The Norton and Ariely data suggest that the American people do not support such a flow, and this is consistent with the fact that every poll for the last 20 years notes that we would support a universal health insurance plan. Maybe Paul Ryan’s attack on Medicare will finally be the impetus for us to go beyond the limitations of ACA and get real health-care-for-all.

[1] Norton MI and Ariely D, “Building a better America: one wealth quintile at a time”, Perspectives on Psychological Science, 3Feb2011;6(2):9-12 doi: 10.1177/1745691610393524

We are moving in the wrong direction: the health care crisis and American hubris

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The passion for democracy and liberation from tyranny continues to spread across the Middle East, with major actions (and reactions from dictators) taking place in Bahrain, Yemen, Libya and even Iran. While decades of US foreign policy has focused on supporting these dictators while talking democracy, the people in these countries are looking at the US as a model, not of foreign policy, but of democracy. They may have economic interests, but -- in Libya, for sure, they are willing to die for freedom. Finally, our President, from whom we (and they) had expected great things, is speaking on behalf of freedom.

However, as I wrote last week, things are moving in the wrong direction in the US itself, where right-wing zealots funded by billionaires have taken over not just Congress but the legislatures of many states. Wisconsin is the prime example of an attempt, which may yet be successful, to strip the basic rights of labor unions to organize and fight for their members, a class war thinly veiled by statements of fiscal responsibility negated by the fact that the unions have already agreed to the financial cuts. On NPR’s Morning Edition on Feb 21, 2011 Steve Inskeep,the host interviewing Senate President Scott Fitzgerald, who is carrying the water for Gov. Scott Walker’s bill, could barely contain his irritation as Sen. Fitzgerald kept dodging the questions, reiterating boilerplate talking points rather than answering.

And we are not doing so well. In Empire at the End of Decadence (NY Times, Feb 18, 2011), Charles Blow provides a stunning graphic chart comparing the United States to other countries in the developed world across a variety of areas on which we do, or should, pride ourselves. We don’t come out very well. Among the International Monetary Fund’s (IMF) 33 advanced countries, we are not in the best in any of the 9 areas. We are dead last in prison population per 100,000 (745, more than twice 2nd place Israel’s 325), and tied for worst, with Korea, with 16% of people indicating that they had not enough money for food in the last year. In the only direct health measure, life expectancy at birth, we are, at 78.24 years, ahead of only 5 of the other 32 countries; Slovakia at 75.62, is the lowest, and Taiwan is jus t behind us at 78.15 (the other 3 are Slovenia, Cyprus, and the Czech Republic).

While Republicans rant about individual mandates and repealing “Obamacare”, the health insurance crisis is not over. In the New York Times, Feb 20, 2011, Donna Dubinsky wrote “Money won’t buy you health insurance”. This “co-founder of Palm Computer and Handspring, is the chief executive of a computer software company” describes the difficulty that she had in obtaining insurance on the private market despite being quite well-to-do when neither she nor her husband worked for a large company any more. After being denied coverage at all because of “pre-existing conditions” (“For me, it was a corn on my toe for which my podiatrist had recommended an in-office procedure. My daughter was denied because she takes regular medication for a common teenage issue. My husband was denied because his ophthalmologist had identified a slow-growing cataract,” she finally found a company that would insure them at a high rate with a high deductible, and the rates have continued to rise although they pay (because of the deductible) most of the bills themselves.

The point is not that she is in tough straits. I am sure Ms. Dubinsky would agree that there are a lot of people who we should have a lot more sympathy for than her; people who are homeless and jobless and hungry, and millions more who are on the verge of becoming so. And yet there are many who continue to see the uninsured as “other”, the “them”, rather than the “me and my neighbors”, despite the fact that many of their neighbors, and relative, and friends, must be in this boat. Ms. Dubinsky’s article points out, if there were any more evidence needed, that insurance companies are greedy and absolutely not to be trusted with the health care of the American people. The Affordable Care Act, (ACA) mandates individuals to purchase health insurance, ostensibly the objection of the Republican right (who are presumably either well insured or healthy and optimists), which was the only way the insurance companies would buy in: they basically said “We can only allow no underwriting (denying insurance to people they assess as too high a risk) this if you make everyone buy insurance.”

Should you even think for a moment that for-profit insurance companies are anything but self-serving, it is worth looking at Jacob S. Hacker and Carl DeTorres’ scorecard, The Health of Reform (NY Times, Feb 17.2011). They grade the ACA in Rollout, Reaction, and Results and give the overall program so far a “B”. The reaction of the insurance companies gets a “C”: “Eager to have millions of new private customers, the big private plans and their lobby are against repeal. Still, they spent tens of millions of dollars supporting the anti-reform candidates in the elections and are fighting key consumer protections and cost controls”.

Paul Krugman is generally a supporter of the ACA health plan, believing that it actually will be a major step to addressing our fiscal problems. “What would a serious approach to our fiscal problems involve? I can summarize it in seven words: health care, health care, health care, revenue. “He continues (Willie Sutton Wept, NY Times, Feb 18, 2011),
“What would a serious approach to our fiscal problems involve? I can summarize it in seven words: health care, health care, health care, revenue….What would real action on health look like? Well, it might include things like giving an independent commission the power to ensure that Medicare only pays for procedures with real medical value; rewarding health care providers for delivering quality care rather than simply paying a fixed sum for every procedure; limiting the tax deductibility of private insurance plans; and so on. And what do these things have in common? They’re all in last year’s health reform bill. That’s why I say that Mr. Obama gets too little credit. He has done more to rein in long-run deficits than any previous president. And if his opponents were serious about those deficits, they’d be backing his actions and calling for more; instead, they’ve been screaming about death panels.”
So, while the President’s plan might be criticized for being a giveaway to insurance companies, the right is attacking it for all the things it actually does well!

Dubinsky ends her article “If members of Congress feel so strongly about undoing this important legislation, perhaps we should stop providing them with health insurance. Let’s credit their pay for the amount that has been paid by the taxpayers, and let them try to buy health insurance in the individual market. My bet is that they all would be denied. Health insurance reform might suddenly not seem to them like such a bad idea.”

Maybe, but some folks have no shame. It is not a bad idea, it is, as Krugman demonstrates, a pretty good idea from an economic as well as health standpoint. And Blow may be right when he says that, rather than confront the realities of developing a population with the health and education to compete in a global economy, too many people “…would prefer to continue to bathe in platitudes about America’s greatness, to view our eroding empire through the gauzy vapors of past grandeur.”

That is not a conceit that we can afford.

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