When I examine any “plan” to reduce the national debt I always go straight to the section on health care, and not just because I’m an expert on health care reform. As you can clearly see from this graph from the CBO, our long-term deficit problem is almost exclusively a health care cost problem.
Any deficit reduction plan that is not focused mostly on reforming health care is simply not serious about fixing the true roots of our long-term deficit. Looking at our health care costs compared to the rest of the industrialized world, we see it is possible to completely eliminate our deficit solely by reforming our health care system to bring its costs in line with the rest of the first world.
There is clearly the potential for massive savings in health care spending. But looking at the Catfood Commission non-report (which Alan Simpson and Erskine Bowles falsely call the “report”–falsely because it can’t get the mandated 14 votes), I’m highly disappointed. The non-report finds only relatively very small savings in health care and their biggest solution is to save $110 billion over ten years by cutting Medicare, forcing seniors to pay more out-of-pocket and face higher co-pays. This a very regressive policy and likely politically quite toxic, as well, but it doesn’t even save more money than popular reforms like a strong public option within the health care exchanges.
Most of the so-called long-term health care savings in the non-report come from saying a future Congress and the President should really try to figure out a way to reduce health care costs if they keep growing after 2020. From the report:
The Commission recommends setting up a process for reviewing total federal health care spending – including Medicare, Medicaid, the Children’s Health Insurance Program, FEHB, TRICARE, the exchange subsidies, and the cost of the tax exclusion for health care – starting in 2020, with the target of holding growth to GDP plus 1 percent and requiring action by the President and Congress if growth exceeds the targets.
What this means is that their magic solution to projected future health care cost increases is just to tell the people of the future they should come up with a solution. Brilliant!
In an almost comical passage, the proposal does acknowledge that there exist reforms that would really reduce federal health care spending, such as a robust public option or all-payer, but the commission says they shouldn’t be implement until maybe 2020, and only if the spending grows as projected. The deficit commission is actually saying we should wait for the deficit to get worse before looking at solutions. Telling people in the future they will need to figure something out is not “making the tough choices”–or a solution–it is just kicking the can down the road.
This graph in the Simpson-Bowles deficit proposal is a lie:
This graph, which Simpson and Bowles use to show how great their proposal is for the long-term deficit, is at best a fantasy, and at worst a lie. The trend line only looks good because they assume that someone in the future will deal with health care in a way the commission was too cowardly to deal with today. By that same logic, my super-awesome deficit proposal would work even better. It just tells Congress, starting in 2018, to find something to make the deficit zero. Problem solved!