So let's recap. Spending on the elderly and the disabled will be growing at one rate while the rest of the health care system will be growing at twice that rate. The Medicare Office of the Actuaries has included two graphs in the latest Medicare Trustees report showing what this will mean. These graphs — which have never appeared in the mainstream media or even been referred to by the mainstream media — show Medicare doctors' fees dropping below Medicaid fees in the near future and falling progressively behind Medicaid and private sector payments, indefinitely into the future.
One out of seven hospitals will leave Medicare in the next seven years, say the actuaries, and beyond that things just get worse and worse. Access to care will become a huge issue as waiting times to see doctors and enter hospitals grows. Harvard economist Joe Newhouse foresees senior citizens seeking care where Medicaid patients and the uninsured now go — to community health centers and to the emergency rooms of safety net hospitals. From a financial point of view, seniors will be less attractive to doctors than welfare mothers.
Now if the administration had been willing to come clean about all of this, I would say that's what leadership is all about. It's about making tough choices. Seniors will have to have less so that younger folks can have more. But that of course, is not what the president is saying. Time and again, the president, the vice president and every leading Democrat in Congress have referred to the Medicare spending reductions as "savings" that will not harm the elderly in any way.
This is not leadership. This is not making tough choices. This is bait and switch. And if the administration won't own up to what it has done today — when there is no obvious pain — what do you think future politicians are going to do when real seniors can't find a doctor who will see them?
Even after robbing Medicare, the administration still did not have enough money to pay for its new entitlement. So what did it do? It pulled another bait and switch. Buried deep in the 2,700 page legislation is the little reported fact that after 2018 the subsidies for private health insurance are going to grow at the same rate as Medicare — i.e., just a tad faster than national income is growing.
Remember the Democrats' complaint about Paul Ryan's Medicare reform plan? The "premium support" seniors would get to buy private insurance would grow at a slower rate than the actual premiums — shifting more and more of the cost to seniors through time. Well, that's exactly what the Democrats are planning to do under ObamaCare to young people. The difference is that the Ryan plan was an undeveloped concept, whereas ObamaCare is the law of the land.
Think about this for a moment. The new law will force all of us to purchase insurance whose cost is likely to grow at twice the rate of growth of our incomes. But after a few years, the subsidies will drop down to the lower growth path as we are all forced to spend more and more of our disposable income on a health plan that will become increasingly unaffordable!
And if you get insurance from your employer, there are no subsidies at all — except for the smallest firms.
If you think any of this is politically sustainable, I have a bridge in Brooklyn I want to sell you.
If you don't think what I am describing is sustainable, then beware that all the budget numbers coming out of Washington are wrong. The real budget crisis is much, much worse.