SECTION TWO: Hidden Economics of Healthcare
Here are samplings of the reasons Healthcare Reform still isn't going anywhere.
When the Democrats select their candidate for President, I will probably have more to say about their plans for paying for healthcare. Currently, Mrs. Clinton is defending Obamacare for the primaries, implying that she leans toward "Single payer" for a permanent program. If she reverts to HMOs as she once did for Clintoncare, I will definitely have something to say. At the moment, however, Mr. Sanders of Vermont looks like a promising candidate, and he is unabashedly in favor of Single Payer.
And he is supported in this by Henry J. Aaron, the economist at the Brookings Institute who for many years was a consultant for the real cause of the cost problem, the employer-based system. Other economists, such as Paul Krugman, have emerged with the cost argument against Single Payer (i.e. Medicare for everyone) that has frustrated them ever since Single Payer has been under discussion. It costs too much. Obamacare has suffered from this criticism with a budget of SEVERAL trillion dollars for ten years, which might have been sustainable under ordinary circumstances, but threatens to capsize the national economy in the midst of the worst recession in eighty years. Kenneth E. Thorpe of Emory University estimates the total ten-year spending of Mr. Sanders at above thirty trillion dollars. That's somewhat between five and ten times as much as the Obamacare era.
To repeat a point made in other places, Medicare is currently the big budget-buster. For all the premiums and payroll deductions, Medicare is supported by a 50% subsidy from general funds. General funds will not support such a deficit, so recently we have been borrowing it from the Chinese government, through the mechanism of selling them U.S. Treasury bonds. Is that what we have in mind, when we talk about Single Payer?
Originally published: Wednesday, February 17, 2016; most-recently modified: Monday, November 28, 2016