Obama did put means testing of Medicare on the table in his press conference today, but I’m actually mostly unconcerned by that. First of all, we already means test Medicare for the top 5% of income. I don’t think we should dip any further, because of how that traditionally affects social programs (it makes them more vulnerable to overall cutting when seen as merely welfare), but this is something not well-understood about Medicare. Second, the last thing that I would see the Republican Party agree to do is to cut off services or make services more expensive for rich old people. That describes 70% of the Republican base! And third, the whole “revenue for Medicare” swap that would lead to a big deal, the only way means testing gets in the final mix, appears to be dead.

Now, there are other health policy possibilities in a debt limit solution that we should stay away from, particularly cost-shifting to the states, essentially handing the executioner’s mask to governor’s and state legislatures so they can kill programs. The states are rebelling against this unwise idea:

While members of the hastily assembled coalition said they were still tracking fast-changing budget talks in Washington, D.C., some estimated the cuts being contemplated could drain $1 billion to $3 billion in annual health care funding from the state’s $30 billion budget, hurting everyone from the poor and elderly to doctors-in-training at teaching hospitals.

Standing on the State House steps, coalition members represented organizations including the Massachusetts Hospital Association, the Service Employees International Union, the consumer group Health Care for All, and the Greater Boston Interfaith Organization. Many held signs that read, “Fed cuts hurt care and jobs.’’ […]

It drew support from powerful health care players who are sometimes on opposite sides of the table, such as Partners HealthCare System, which operates the Harvard-affiliated Brigham and Women’s and Massachusetts General hospitals, and Blue Cross Blue Shield of Massachusetts, the state’s largest health insurer. All of them said they worry that federal cuts could negate gains from the state’s 2006 health care law and derail efforts to overhaul health care payments.

In particular, moving to a “blended rate” for Medicaid and CHIP would reduce federal expenditures and force states to either cut rates for providers from the already rock-bottom position, or to increase costs on beneficiaries with higher premiums and co-pays. And that’s just the impact on users of the system – there’s also a widespread economic impact to Medicaid cuts.

Moreover, the main problem with our health care system is… the health care system itself. The chart shows that the US has the lowest life expectancy when plotted against 19 other affluent nations, AND spends the most money on health care. We have the worst of all possible worlds, and the Affordable Care Act isn’t going to radically improve matters, either. It’s not like the solution for how to spend less with better outcomes in health care is locked up in the Chamber of Secrets. And it certainly doesn’t start with taking a club to health expenditures and hoping that poor people and the elderly will be smarter shoppers. Even if we subsidize cheaper spending on health worldwide with superior R&D, that just doesn’t explain variance like this.

Vermont’s single payer system can’t come fast enough.

Obama did put means testing of Medicare on the table in his press conference today, but I’m actually mostly unconcerned by that. First of all, we already means test Medicare for the top 5% of income. I don’t think we should dip any further, because of how that traditionally affects social programs (it makes them more vulnerable to overall cutting when seen as merely welfare), but this is something not well-understood about Medicare. Second, the last thing that I would see the Republican Party agree to do is to cut off services or make services more expensive for rich old people. That describes 70% of the Republican base! And third, the whole “revenue for Medicare” swap that would lead to a big deal, the only way means testing gets in the final mix, appears to be dead.

Now, there are other health policy possibilities in a debt limit solution that we should stay away from, particularly cost-shifting to the states, essentially handing the executioner’s mask to governor’s and state legislatures so they can kill programs. The states are rebelling against this unwise idea:

While members of the hastily assembled coalition said they were still tracking fast-changing budget talks in Washington, D.C., some estimated the cuts being contemplated could drain $1 billion to $3 billion in annual health care funding from the state’s $30 billion budget, hurting everyone from the poor and elderly to doctors-in-training at teaching hospitals.

Standing on the State House steps, coalition members represented organizations including the Massachusetts Hospital Association, the Service Employees International Union, the consumer group Health Care for All, and the Greater Boston Interfaith Organization. Many held signs that read, “Fed cuts hurt care and jobs.’’ […]

It drew support from powerful health care players who are sometimes on opposite sides of the table, such as Partners HealthCare System, which operates the Harvard-affiliated Brigham and Women’s and Massachusetts General hospitals, and Blue Cross Blue Shield of Massachusetts, the state’s largest health insurer. All of them said they worry that federal cuts could negate gains from the state’s 2006 health care law and derail efforts to overhaul health care payments.

In particular, moving to a “blended rate” for Medicaid and CHIP would reduce federal expenditures and force states to either cut rates for providers from the already rock-bottom position, or to increase costs on beneficiaries with higher premiums and co-pays. And that’s just the impact on users of the system – there’s also a widespread economic impact to Medicaid cuts.

Moreover, the main problem with our health care system is… the health care system itself. The chart at left shows that the US has the lowest life expectancy when plotted against 19 other affluent nations, AND spends the most money on health care. We have the worst of all possible worlds, and the Affordable Care Act isn’t going to radically improve matters, either. It’s not like the solution for how to spend less with better outcomes in health care is locked up in the Chamber of Secrets. And it certainly doesn’t start with taking a club to health expenditures and hoping that poor people and the elderly will be smarter shoppers. Even if we subsidize cheaper spending on health worldwide with superior R&D, that just doesn’t explain variance like this.

Vermont’s single payer system can’t come fast enough.

David Dayen

David Dayen