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Economics Deepen the Health Care Crisis |
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Reading today’s health care news clips you get a real clear picture of how the economic crisis facing this country is throwing people into the worse parts of our failing health care system.
First, the Detroit Free Press reports on a new study from the Kaiser Family Foundation on rising Medicaid enrollment in the face of the weakening economy:
Across the country, as more people lost health insurance, Medicaid enrollment grew 2.1% in the 2008 fiscal year, which ends today. Michigan’s Medicaid enrollment jumped 3.7%.
It begins the 2009 fiscal year with 1.58 million recipients, more than 1 in every 10 residents, up from 1 million in fiscal 1999.
While it’s not surprising or necessarily a bad thing that more people are on Medicaid, we have to remember that Medicaid is a health program for people with low incomes. By definition, these people are not profitable for private insurance companies and they can’t afford private insurance on their own, so they are forced into Medicaid. This means the insurance industry gets to keep its profitable customers and throw more people on government rolls, and apparently that’s ok. Don’t you dare mention that the insurance industry maybe, probably, should lower their rates. No, no, that’s not how we fix this mess.
Of course, higher enrollment in Medicare (and Medicaid), given the built in high-risk pool nature of both programs, leads to problems down the line. Medicaid costs are projected to skyrocket:
Fueled by the needs of a growing elderly population, U.S. spending on long-term health care under the Medicaid program will soar in the next 20 years, a report released on Monday predicted.
Spending for long-term care for elderly and disabled people under the Medicaid health insurance program for the poor will total $3.7 trillion in the next two decades…
Ezra Klein expands on the significance:
If you’re worried about the federal debt — particularly the long-term federal debt — there is literally no way you can afford not to reform health care. The following graph charts the drivers of federal spending over the next couple of decades. Look what leads the way:
Yep. Medicare and Medicaid. Now, because the government releases a lot of graphs like this one, a lot of folks end up believing that the problem is Medicare and Medicaid. But it’s not. It’s generalized health care spending, and it’s as much a burden on the private sector as the public treasury. The next graph tracks the next few decades in GDP per capita, then in GDP per capita after taxes (which is to say, including cost increases in Medicare and Medicaid), then, on the yellow line, GDP per capita after taxes and after private health care spending. And what you see is, to a wonk’s mind, quite scary: Real income actually goes down. The country becomes, effectively, poorer.
Because there is no fair risk sharing, because costs are not being cut, because the insurance industry continues to push for more deregulation and tax cuts that will literally go from the government’s treasury into their pockets, our long term debt is predicted to rise dramatically, and it’s all fueled by health care costs.
Sure, $700 billion to Wall Street is something we need to worry about. But the economic downturn is already accelerating health care cost increases in this country, and that will drive our debt in the future long after this meltdown is ancient history. As Ezra notes, we literally can’t afford not to fix health care.
It’s no surprise, then, that almost every economic recovery platform put forward by progressives includes health care as an integral part. Change to Win, Center for American Progress, Campaign for America’s Future, and all sorts of others have proposed such ideas. To that end, Katrina vanden Heuvel, editor of the Nation, and Eric Schlosser, author of “Fast Food Nation,” write in the Wall Street Journal today about a New New Deal, a comprehensive economic recovery plan that fixes Wall Street, Main Street, and your street. Not surprisingly, health care is included:
Firstly, we need relief for ordinary Americans. At the moment, four million households are behind on their mortgage payments and facing foreclosure. Some estimates suggest that an additional two million may face eviction next year.
…As winter approaches, millions of families will need help keeping those homes warm. During the past year, the cost of heating oil has increased about 30%. Meanwhile, the Bush administration is now trying to cut funding for the Low Income Energy Assistance Program. Instead of cutting, the federal government should more than double the current budget of $2.6 billion. That is awfully small change on Wall Street these days.
Second, we need reform. In recent years, one federal regulatory agency after another has been handed over to the industries they were created to regulate. It should come as no surprise that during the Bush administration the U. S. has witnessed the largest recall of contaminated beef in its history, thousands of deaths from unsafe prescription drugs, and one of our worst financial meltdowns.
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Third, we need reconstruction, not only of America’s physical infrastructure, but also of its society. Today close to 50 million Americans lack health insurance. About 40% of the nation’s adult population is facing medical debts, or having difficulty paying medical bills. A universal health-care system would help American families, while cutting the nation’s long-term health-care costs. And a large-scale federal investment in renewable energy and public-works projects would build the foundation for a strong 21st century economy.
Contrary to the myth of the free market, direct government intervention has played a central role throughout American economic history, subsidizing the growth of the railroad, automobile, aerospace and computer industries, among others. It will take well-planned government investment to break our dependence on foreign oil and create millions of new Green jobs.
The economic crisis deepens the health care crisis as more are thrown out of work or can’t afford to keep up with their insurance premiums. As more people file for bankruptcy due to medical bills (the number one cause of bankruptcy), and as more people put off treating their diseases, it saps people’s economic strength, further deepening the economic crisis. The two issues are intimately connected, especially in the long term.
So here’s to a real economic recovery plan for America, not a $700 billion blank check to Wall Street.
