Saturday, August 06, 2011

"Entitlement reform"

You're going to be hearing that phrase a lot - "Entitlement reform". Because, in the end, projected growth of entitlements is most certainly what is going to put the most pressure on the nation's finances.

There are two big entitlement programs: Social Security, and Medicare.

Social Security is paid for through around 2037. And, the Social Security payroll tax used to affect 90% of all salaries, now it's only affecting about 84%; before we talk about cutting benefits, we should first bump up the maximum until it's taxing closer to 90% of salaries again, and see what that gets us.

Then, there's Medicare.

Here's the problem with Medicare: we pay far too much money for health care in this country.

I've seen figures that show that the US government spends more per capita on health care than other nations do, including nations that have single-payer health care.

Let's go over that again: the US government pays more, per citizen, for Medicare, Medicaid, VA, and other health care programs, than, say, Canada pays per citizen to completely insure all of its citizens.

If this were Canada, we could provide health care for everyone, based just upon what we currently spend on Medicare, Medicaid, VA, and so forth. All of the money spent on private health insurance could be spent on other things.

If you're like me, part of you is thinking that's impossible. Well, remember: the US spends about twice, per capita, what other nations spend. If half of that spending comes from the government - and it does, near enough - then what I've just said is true. We should be able to cover just about everyone, just with our government expenditures. Throw in a boatload of extra cash, if you want; imagine cutting all private health care costs in half, so there's rivers of extra money to allow hungry capitalists to find a bit to feast on. We should still be able to cover everyone, for much less than we're spending to cover about 80%.

Every other advanced nation does this... but we don't.

Do we need to reform the "entitlement" known as Medicare? No. We need to reform how health care is paid for. Once we're paying rational amounts for health care, we can figure out what our true Medicare liabilities are going to be like.

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