“We have a moral obligation to the country to do this.”
So said Rep. Paul Ryan (R-WI), chairman of the House of Representatives Budget Committee, as he proposed enormous cuts in federal spending by radically overhauling the health care system. His plan, delivered last week, projects saving the federal government $4 trillion by reshaping and reducing health care benefits for the elderly, poor, and disabled.
What exactly is the moral obligation? Reducing the debt or providing health care? This may be the most pressing moral issue “we the people” face over the next forty years. Do we have a moral obligation to cut spending or raise taxes (or not raise taxes)? Or, do we have a moral obligation to provide health care to our elderly, the poor, and the disabled?
Clearly health care is a moral issue. As a nation, we have enormous moral disagreements on critical health care issues from conception to life-sustaining stem cell research to death.
For the past sixty years, we have debated whether health care is a moral issue, that is, whether we as a nation have a moral obligation to provide health care to everyone or whether each individual is responsible for his or her own health care. Except for the United States, every democracy on earth believes it has a moral obligation to provide health care to its entire citizenry.
As health care costs rise unabated, the line between cost and care is becoming blurred. Medical expenses are the cause of 50% of all personal bankruptcies in recent years. (Ironically, bankruptcy was a “moral” issue a generation ago. Today, bankruptcy is an economic option with virtually no moral implications.) As a nation, we are beginning to approach a similar precipice.
Mr. Ryan deserves enormous credit for making a bold proposal. As promised, his proposal reduces federal expenditures. On the other hand, it doesn’t save any money. It merely shifts $4 trillion of costs over the next ten years from the federal government to state governments and to the elderly, poor, and disabled.
By replacing Medicare with a stipend and instructions to “buy your own insurance,” most of the elderly will have less health care. The theory is that tens of millions of retirees will rise up together and negotiate better rates with the insurance companies. Somehow IBM, GE, Microsoft, AT&T, state and city governments, sprawling university systems and non-profits, and other huge organizations negotiating on behalf of tens of thousands of employees can’t do that, but the elderly can and will.
Even though the average annual cost of Medicare per person is approximately $11,000, the proposed stipend is about $8,000. Can private for-profit insurance companies which have administrative costs of 20% or more learn to be more efficient that the non-profit Medicare system with its 3% administrative cost burden? (On a personal note, I’m 61, healthy, eat right, and am active. However, because of hip replacement surgery five years ago, I’m not insurable. A state-sponsored “high risk pool” will cover me for approximately $17,000 per year with annual increases in the years ahead.)
If you were born before 1958, you’ll still get Medicare. If born after 1957, you get a stipend that covers about 75% of your projected health insurance cost. Although the Ryan proposal provides that the stipend increase with inflation, health care costs are rising at triple the inflation rate. Under the Ryan plan, the average retiree would have to spend almost half of his or her retirement income on health care. Retirees better become great negotiators.
Mr. Ryan proposes block grants to the states to cover the federal government’s share of Medicaid costs. Over ten years, he proposes decreasing federal Medicaid spending by $1.7 trillion (that’s a “t” for trillion, not a “b” for billion), or 39%. State governments are struggling to meet their share of Medicaid today. How are they going to absorb more, especially $1.7 trillion more? Clearly, they can’t. The message to the poor and disabled is: fend for yourselves!
Real death panels will emerge. Not the fiction used to scare people into opposing the recently passed health reform law. Instead, if families can’t afford health care, they will choose between death and . . . well, whatever other choices may exist.
The Ryan plan pits old against young, rich against poor, those who vote against those who don’t, and those who make political contributions against those who don’t. This isn’t a fair fight. Apparently, the “We” in “We the people” does not mean all of us.