Decoding the Scam

November 9th, 2011

Romney’s Health Care proposal:

First, Medicare should not change for anyone in the program or soon to be in it.  We should honor our commitments to our seniors.

Second, as with Social Security, tax hikes are not the solution.  We couldn’t tax our way out of unfunded liabilities so large, even if we wanted to.

Third, tomorrow’s seniors should have the freedom to choose what their health coverage looks like.  Younger Americans today, when they turn 65, should have a choice between traditional Medicare and other private healthcare plans that provide at least the same level of benefits. Competition will lower costs and increase the quality of healthcare for tomorrow’s seniors.

The federal government will help seniors pay for the option they choose, with a level of support that ensures all can obtain the coverage they need.  Those with lower incomes will receive more generous assistance.  Beneficiaries can keep the savings from less expensive options, or they can choose to pay more for a costlier plan.

Sounds good: keep Medicare as it is for those who are in it, don’t raise taxes on anyone, and instead allow new entrants to choose from a competitive market. At first glance, it seems a reasonable plan.

However, it falls apart if you start to think about it. For example, who was proposing tax hikes specifically to secure Medicare? I was not aware of any proposals along those lines, rather plans to solve deficit problems in general. Romney is effectively saying here, “No tax hikes for rich people, instead we solve our deficit problems by addressing Medicare–which means making cuts.” He’s also trying to throw in the statement that he’s for Social Security, to reassure seniors especially.

Now come back to his first statement: “Medicare should not change for anyone in the program or soon to be in it.” If one takes a careful look, the implicit message buried in that statement is, “Medicare WILL change for anyone NOT soon to be in the program.” The word “soon” being undefined. Essentially, he’s promising to change Medicare a la Ryan’s plan, to get rid of it in favor of private plans.

But then we come to the last part, in which he talks about people having a choice. Now, this is immediately suspect: people have a choice right now. Unless I am badly mistaken, no one is forcing seniors to get Medicare. Romney’s plan would seem to differ only in that it allows people to use government subsidies to buy private plans. Subsidies which, you can bet your life on, will be substantially lower than current benefits.

Note that Romney uses nebulous terms: the government will “help” to pay for “needed coverage” with “more generous” support for people more in need. Those terms could mean practically anything–“help” could mean to pay a small amount; “needed coverage” is a subjective expression which could be interpreted to mean only vital care; “more generous” than a pittance might still be a pittance. All that is guaranteed here is that seniors will pay for a substantial chunk of their health care themselves.

At which point we get to the key statement: “Competition will lower costs and increase the quality of healthcare for tomorrow’s seniors.”

Really? How will that happen? Sullivan points out that, even ideally, only as much as 8% of costs could be cut by competitive means. And we can’t forget the fact that private providers will charge a profit, which Medicare doesn’t. Or that “competitive” inevitably means “lower quality.”

Now, Romney seems to be promising equal or better quality–but how can that be assured? Only one way: government regulation. Which Romney and conservatives are steadfastly against. Which means that we’ll fall back on “self-regulating,” which really means “corporations trying to make a crappy thing sound good,” which means lower quality.

Really, the private market can’t beat Medicare. Which is the whole point. Which also brings us back to Romney’s indirect statement that he will not preserve Medicare for future recipients. This seems to fly in the face of his statement that “traditional Medicare” will be an option. If that’s really true, then the private plans would not be able to compete. Which is where his proposal falls apart: in order for private plans to have any chance of competing, “traditional Medicare” cannot be allowed to continue–which would fall in line with his original suggestion that traditional Medicare would, in fact, not be preserved.

In short, Romney fully intends to dismantle Medicare as it now exists and replace it with an unspecified level of government support to buy private programs. The claims that this will provide the same level of quality as Medicare today are, we are left to deduce, purely an assumption. But don’t worry, seniors–he’s not shortchanging you, so you can still vote for him.

Which, if you look back at the original statement, is not exactly what Romney sounded like he was talking about. Nor is it anything which, if enacted, would (a) save any money or reduce the deficit in the short term, or (b) prove effective or not during any period of time Romney could potentially be in office.

Yep. Quite a plan he’s got there.

  1. Troy
    November 9th, 2011 at 12:16 | #1

    Medicare can easily be killed by just closing it off to new enrollees.

    That’s what the Ryan plan was all about.

    Medicare as-it-is is facing massive doctor resistance due to lower payouts for procedures.

    The way to fix things is to put everyone on Medicare, duh.

    Health insurance in my 50s and 60s is the #1 reason why I want to leave this goddamn place.

    Better leave soon since it gets much harder to qualify as a 45+ yo.

    Same conservative bullshit, different decade.

  2. Troy
    November 9th, 2011 at 12:23 | #2

    Tim Kane has a nice comment from 5 years ago now:

  3. matthew
    November 9th, 2011 at 22:33 | #3

    I thank my lucky stars that I am in Japan. It is a huge relief to know that no matter what happens I am taken care of. I also have an issuance policy that pays my med bills and also pays ME for any hospitalization. Costs are minimal.

  4. Tim Kane
    November 11th, 2011 at 02:35 | #4

    That was a smarter yet more naive Tim Kane.

    “…one looks like Jessica Rabbit, and the other like Mama Cass.”

    (with apologies to Mamma Cass – she was way ahead of her time, by the way)

    The problem, as I tend to see it, is that wealth became so concentrated during the Bush years, and it was already too concentrated before he came to power, that the plutocratic monied interests could buy enough Dems so as to always have a majority in congress. They own Obama as well.

    Obama managed to save the economic structure, but not its performance nor implement the changes needed to save the structure from mal-performance in the future or policies to make it run better. He’s no Jessica Rabbit but he’s no Momma Cass either. Obama was more of a Bug’s Bunny dressed as a sexy girl (Herbert Hoover, perhaps).

    Jessica Rabbit would have backed public option, which refused to go away even after Obama threw it under the bus. Had he backed it, it might have made it across the finish line. Jessica Rabbit would have implemented the kind of economic policies South Korea did in early 2009 to save their economy. In March 2010 South Korean press referred to the recession of 2009 as ancient history, and Korea had a 4% unemployment rate. Bugs Bunny-in-a-dress instead went for a small stimulus nearly half of which was tax cuts. Bugs Bunny-in-a-dress would later sustain the Bush tax cuts that created the problem in the first place. Jessica Rabbit, after putting in place a strong stimulus would have followed it up by backing card check to both strengthen and proliferate unions.

    Bugs Bunny in a dress never pushed his advantages over republicans. Instead he let the Republicans run all over him. The failure of his economic policies allowed Republicans to pillory him over health care and run on a jobs, jobs, jobs platform that gave them control over the House of Representatives. Jessica Rabbit’s policies and active campaigning would have left the Republican party so discredited that they would be nothing more than a crank rump of a party.

    At this point no one knows what Obama really believes in, we may get a glimps of it in December of 2012 if he wins in November – that’s the only moment any politician has of free movement – Bush decided he had a mandate to assault, that is privatize, social security. In December 2012 Obama might let us know who is behind the dress, Bugs Bunny or Jessica Rabbit, or the Tasmanian Devil, or Elmer Fudd. Who knows?

    Meanwhile the post Bush renaissance awaits a true champion and now we know, relies upon a more informed and realistic electorate. That’s what the Occupy movement is slowly creating. People need to know that there is only one governing principle in this society, it is free contract and that means bargaining power is everything, and they need to be highly sofisticated at detecting when someone is trying to steal theirs through hard peddling of culture war ideas or what not.

    Parallel to the Occupy movement is a growing new appreciation of Unions. They are all about bargaining power – and giving it to the people. This is a slow development, but Jessica Rabbit can’t make her real appearance until that becomes common knowledge. Right now, it looks like Jessica is running for the senate in Massachusetts and won’t make her appearance before 2016.

    There are important Geo-strategic problems here: The Depression kicked off in 1929 and the U.S. had not recovered even in 1939. Meanwhile Japan began Keynesian style policies in 1932 and Germany in 1933. By 1939 Japan’s industrial production had grown 100% (double) over its 1928 output and Germany’s was 125% in both cases the stimulus was armaments while America was still stuck at sub 1929 (or rough parity to 1929) performance. As late developers both countries were put in a revisionist role to the economic order. By 1940 both were in a position to attempt to reorder the international system – and so they made the attempt.

    Now lets look at the current era. With Obama looking to be re-elected, it means another 4 years of Herbert Hoover. We can’t expect an economic recovery before 2016. We’ll be lucky if we get one by 2022, if we ever get one. The political groundswell for this era’s FDR is embedded in the Occupist Movement, with collateral support from unions and some important liberals. That could be a force for change by as early as 2014, but I don’t see it being far enough along to get a Jessica Rabbit into office by 2012. We’ll still be stuck with Herbert Hoover/Bugs Bunny in a dress Obama.

    Right now, Jessica Rabbit appears to be Elizabeth Warren. If she came to office in 2016 she’d have as much experience as Obama did in 2012, which is, as we no know, not enough. So if she comes to office in 2016 we’d still might have to suffer through another four years before she got traction and berrings. An alternative would be Hillary Clinton who has the right experience but has Bug Bunny in a dress pedigree. However she is capable of change and man- oh man – has she ever got experience.

    Just as likely, We could get a Republican in office in 2016 as the pendulum swings back, which means no Jessica Rabbit until 2020.

    Meanwhile China, India, and Russia keep growing at 7% rate each year. That’s a doubling of their economic output roughly every ten years. By the time we will have re-ordered our society into something decent – say withing 3 or 4 years of 2022, those countries will be in a position to challenge the existing international order. Instead of Germany, Italy and Japan, we could be faced with Russia, India and China – with the advantage of them being physically connected, with billions of people and unlimited resources.

    It’s best to not look too far into the future, but try to do everything we can to speed up change in our society now. Viva the Occupist.

  5. Troy
    November 11th, 2011 at 03:20 | #5

    “Meanwhile Japan began Keynesian style policies in 1932 and Germany in 1933. By 1939 Japan’s industrial production had grown 100% (double) over its 1928 output and Germany’s was 125% in both cases the stimulus was armaments ”

    these were houses of cards, economically.

    I don’t think “expansion” is the answer, really

    our problems are simply ones of distribution not production.

    we’ve got trillions of dollars bleeding out of the middle class — via expensive healthcare, trade deficits with China and oil exporters, inflated housing costs.

    Fix that and we’ll be OK. Don’t fix that and we’re still going to be hosed no matter what we do.

    You seem to be looking for a superman executive to knock sense into Congress. Superman doesn’t exist. Congress is functionally eternal while presidents come and go.

    The core problem is the people we’re sending to Congress, and 2010 was a rather large movement in the wrong direction on that front, with 2012 looking to be perhaps worse.

  6. Tim Kane
    November 11th, 2011 at 08:50 | #6

    I agree, but I think of it in perhaps other terms. The problem is and always is bargaining power. A lack of bargaining power is causing money to flow away from the middle class – to China and other nations with chronic export surpluses (Japan), to Oil countries, to the rich. This causes the money to be sequestered from the commercial economy, meaning as it flows out to the seqestered areas, demand goes down.

    In the short term, if you could flip a switch tomorrow and give America Taiwan’s healthcare system, which cost only $23 per capita, then allow the workers to capture the savings in their pay checks, then purchasing power would probably increase by about $400 a month per worker currently receiving the benefit. This increase in purchasing power would end the recession in a fortnight.

    But won’t happen because workers don’t have enough bargaining power.

    This takes us back to the problem of them not having enough bargaining power, which causes money to flow to the top 1% in this country, and they sequestering the money.

    So health care reform could end the recession and is desperately needed, but on top of that, and more importantly is stronger bargaining power for the middle and working class across the board. That will shift resources from the rentier class to the spending masses.

    since 1972 gnp has gone up 150% but median wages have remained flat. That is the essence of the problem right there.

    It’s my secret suspicion that corporations take delight in moving manufacturing overseas because it shifts bargaining power away from workers – which they love more than life itself. If people have greater bargaining power the systems we set up would make that harder – if not nearly impossible.

    Check back into the Bush II decade. He gave corporations EVERYTHING they asked for. Higher H1B visa quotas, lower regulations, underenforcement for existing regulations and tax violations and a blind eye to illegal immigration.

    The occupation of the rich, conservative, republican is the ever greater concentration of wealth and power, which in practical terms this means the pursuit of bargaining power. This is the common theme through all Republican policy pursuits.

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