US Health Care Plan

LoongLee wrote: I'm not aware of any public program (food, housing, health) that has reined in costs or not expanded beyond recognition.

As a federal-state program, Medicaid has much greater spending variation than Medicare because it pays for health care for a variety of low-income persons. About half of Medicaid’s 60 million enrollees are poor children, another one-fourth are either the parents of those children or poor pregnant women, and the remaining fourth are either aged, blind, or disabled. Medicaid covers 20 percent of the U.S. population, considerably more people than Medicare covers. Although Medicaid is often described as America’s health care program for the poor, in reality it covers only about one-third of people whose income is below the poverty level. It also finances about two-thirds of all nursing home stays by the time of a patient’s discharge.

The “graying” of America has caused alarm among many experts that the future cost of federal health and retirement programs will create huge federal deficits, dry up capital for investment, and jeopardize long-term economic growth. Spending entitlements—specifically Social Security, Medicare, and Medicaid—are generally seen as the main factor driving this scenario.
Standard criticisms of entitlement spending generally don’t point out the very substantial favorable impacts they have had on poverty and inequality reduction, income support, greater living independence, and better health coverage. Critics often claim that older Americans benefit disproportionately from entitlement spending, but in fact, when tax entitlements and spending entitlements are cumulated, a majority of combined entitlement benefits actually are received by people under age 65.
Although population aging presents a serious fiscal challenge to the nation, there are hopeful trends that may portend a more sustainable economic future. Older workers have been staying in the labor force longer, a trend that means higher Social Security taxes to improve the system’s finances. In addition, disability rates appear to have declined steadily for the past decade or more, and nursing home utilization rates have also declined. The productivity of workers has surged in recent years and, if sustained, could help offset the future expected decline in the size of the labor force.
A plausible long-term scenario suggests that a future “train wreck” can be averted if we are able to maintain the same level of spending restraint in our health programs that we have already achieved in the past decade and we allow revenues to rise automatically without legislating additional tax cuts. In such a scenario, the primary deficit would be no larger in 2050 than it is today. Because debt would still be rising in this scenario, additional policy solutions would be needed to keep debt from growing faster than GDP.
At least six important additional solutions are needed:
1. Transform our health care system by paying more appropriately for services, extending coverage to those without insurance, and improving the quality of medical care.
2. Grow existing revenue sources and enact a new revenue source such as a VAT or progressive consumption tax that would yield significant revenues while limiting saving disincentives and administrative inefficiencies.
3. Reform Social Security to make it solvent for the long-run, including changes that would promote longer work lives.
4. Renew overall fiscal and budgetary discipline and reimpose the paygo spending caps.
5. Promote individual saving opportunities for low- and moderate-income households through universal “auto-IRAs” using payroll deduction and subsidies for low-income savers, and by converting “upside-down” tax incentives to refundable credits.
6. Promote economic growth by extending work lives, increasing national saving, and investing in human and physical capital to sustain productivity growth.

The needed policy changes will require leadership from government, the private sector, and non-government organizations, and contributions by both workers and employers. Concerted action in the near-term is critical if we are to create the conditions for continued economic growth while providing health and economic security for current and future generations of Americans, both in their working years and in retirement.

http://assets.aarp.org/rgcenter/econ/20 ... curity.pdf