{"id":6462,"date":"2012-12-14T14:35:16","date_gmt":"2012-12-14T19:35:16","guid":{"rendered":"http:\/\/www.multiplier-effect.org\/?p=6462"},"modified":"2013-01-03T15:20:51","modified_gmt":"2013-01-03T20:20:51","slug":"medicare-for-all-and-the-long-term-deficit","status":"publish","type":"post","link":"https:\/\/blogs.bard.edu\/multiplier-effect\/medicare-for-all-and-the-long-term-deficit\/","title":{"rendered":"Medicare for All and the Long-term Deficit"},"content":{"rendered":"

Paul Krugman points out<\/a> today that once you take into account the lingering effects of the recession, it may very well be the case that there is no significant near-term budget shortfall at all. Once the economy has recovered, the budget may already be destined to come in at a level that would stabilize public debt as a share of GDP. \u00a0The real problem we have in the short-run is that budget deficits are too low\u2014and shrinking<\/a>\u2014not that they are too high and growing.<\/p>\n

The least unpersuasive case for worrying about the federal budget deficit focuses on the long-term increases in Medicare and Medicaid that will result if health care costs follow their projected, steep upward pathway.\u00a0 If you accept this case (which should not<\/a> simply be accepted as gospel), then you can stop listening to any purported \u201cgrand bargain\u201d plan that does not address this projected rise in health care costs.<\/p>\n

Yet, if the news reports have any validity, the \u201centitlement reform\u201d side of the fiscal cliff negotiations has become focused on a proposal to increase the Medicare eligibility age by two years.\u00a0 This would deliver roughly $5 billion in savings to federal government in 2014.\u00a0 You might say that, given the hardship it would cause to so many near-retirees, this seems like an awfully small sum.\u00a0 But it\u2019s worse than that.\u00a0 While this policy change might save the government $5 billion, it would increase<\/a> health care spending system-wide by twice as much<\/em>.\u00a0 In other words, the grand deficit bargain is centered on a proposal that makes the problem of rising health care costs worse<\/em>.<\/p>\n

There is a tried-and-true method of controlling health care costs\u2014but it requires moving in precisely the opposite direction as this proposal.\u00a0 Many other countries are facing shifting patterns in government spending due to aging populations, but the United States is unique in the developed world in the amount of money it spends, per person, on health care; all in order to obtain slightly inferior health outcomes.\u00a0 Pick any wealthy country at random, and if the United States were to spend the same amount, per person, as this randomly selected country, the projected long-term US budget shortfall would disappear\u2014completely<\/a>.\u00a0 Why?\u00a0 The answer is that many other countries (with universal coverage<\/em>) use the bargaining power of a government payer to control the per-unit cost<\/a> of health care services. Raising the eligibility age for Medicare, making the government insurance pool smaller and sicker, moves us in the opposite direction.<\/p>\n

You can either commit yourself to “reducing the size of government,” or you can commit yourself to getting health care costs under control, but you’ll have a hard time doing both.<\/p>\n","protected":false},"excerpt":{"rendered":"

Paul Krugman points out today that once you take into account the lingering effects of the recession, it may very well be the case that there is no significant near-term budget shortfall at all. Once the economy has recovered, the budget may already be destined to come in at a level that would stabilize public […]<\/p>\n","protected":false},"author":202,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[74,292,176,164,240,326,479],"class_list":["post-6462","post","type-post","status-publish","format-standard","hentry","category-fiscal-policy","tag-budget-deficit","tag-fiscal-cliff","tag-healthcare-costs","tag-james-galbraith","tag-medicare","tag-paul-krugman","tag-single-payer"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/6462","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/users\/202"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/comments?post=6462"}],"version-history":[{"count":23,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/6462\/revisions"}],"predecessor-version":[{"id":6695,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/6462\/revisions\/6695"}],"wp:attachment":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/media?parent=6462"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/categories?post=6462"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/tags?post=6462"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}