Empire For Ever – The Daily Dish | By Andrew Sullivan
Why should Americans be denied basic access to health insurance because the money is going to sustain 50,000 troops in Germany, for Pete’s sake, or to tamp down sectarian conflicts that have existed for centuries in a country we had no troops in for all of US history until 2003?When will this madness end? Do we really have to go completely bankrupt and be forced to withdraw from these anachronistic pretensions? Are seven years not enough?
Well, hate to point this out, but it’s health care that’s bankrupting this country and not the military.
Right, but the point is that we think nothing about spending an extra $50 billion here (Iraq) or a $100 billion there (Afghanistan). We make those kind of decisions without even thinking about the fiscal impacts. But talking about spending similar amounts on providing an additional 30 million people with health insurance gives everyone the vapors.
Well, there are some pretty big differences. The Iraq and Afghan war spending isn’t going to last forever – a new entitlement will. Military spending hasn’t increased at twice the rate of inflation for the past 40 years – health care spending has. With that kind of cost growth, a $150 billion a year will soon balloon just like every other health care entitlement. The difference is sustainability and simply moving X number of dollars from defense to an entitlement will buy you that entitlement for a decade if you’re lucky. In the 1960′s defense spending was about 9% of GDP – today it’s about 6%. In the 1960′s health-care spending was about 2% of GDP – today it’s 16% and within 10 years will be close to 1/4.
I’m all for reducing military commitments and reducing the defense budget, but you’ve got to realize the limits of what that can do and I think that’s something Sully doesn’t understand.
Maybe, though, of course, the longer-term cost projections are unreliable. Why? Because health care expeditures CAN’T rise this quickly indefinitely. At some point they will become literally unsustainable. I mean, we’re on a path where in my lifetime (I’m 43), literally half of GDP will be health, which I think will mean that every American will be either a current patient or a health care provider. So, ya know, that seems unlikely. Something has to give, and it will.
But let’s talk about 10 year projections. Here is mine: we’ll spend more in Iraq/Afghanistan over the next decade than we would passing Obama’s health care plan. 10 year projections are hard enough. I think trying to make public policy on the basis of what we think may occur 25 years out is usually counter-productive.
So I do think it is fair to ask, which would you prefer? To spend $1 trillion on nation-building in Iraq and Afghanistan or to spend $1 trillion to extend coverage to another 30 million Americans for the next decade, remove the risk of being dropped from coverage due to illness, and begin to establish a framework for cost controls?
You’re right that long-term cost projections are unreliable – in fact they are usually way too conservative and grossly underestimate future costs. See medicare for the worst example. Extending coverage is likely to cost much more than what is projected.
You’re also right that something has to give. Wouldn’t it be nice if our political class did something about that before we become the next Greece? Putting money into covering more people without addressing the underlying cost-growth unsustainability is, I think, immoral because it’s making a promise that can’t financially be kept. Selling a decade of benefits to 30 million Americans as a long-term solution to this country’s health care problems is cynical deception in my opinion.
Finally, I think your two preferences are a false choice assuming we don’t have a fiscal crisis in the next decade. Spending a trillion (likely to be much more if history is any guide) over a decade to extend coverage is kicking the can down the road. Health care costs are rising at about 6% a year – that means the price of health care will double in the next decade unless there is systemic reform. In that case how can I support a policy which adds to our fiscals problems and will only be able to provide benefits for maybe a decade before the funding can’t keep up with the spending?
So I see the uninsured problem as a subsidiary problem to something much bigger (ie. the actual cost of health care and its unsustainable growth) and I think the uninsured problem cannot be solved until the systemic problem is solved. The reason we have such a serious uninsured problem is because health care is so freaking expensive which makes health insurance of whatever type (public, private, employer) freaking expensive. Providing coverage to the uninsured isn’t going to make that problem go away.
So yes, we can pass this bill and provide coverage at great expense, but realize it is just a temporary band-aid which makes the government solvency problem worse without addressing the fundamental systemic problems. That is not a choice I would make in good faith. We need health care reform with cost control as the central principal. That is what I would choose.
Your argument only holds if you consider expanding coverage and containing costs as somehow at odds. I’d argue they are not. Indeed, until you get everyone into coverage scheme, I don’t see how you can begin to manage costs. A major problem right now is precisely that we have a large number of people who are not paying into the system in any way, but who maintain a claim on coverage via emergency rooms. I think you need everyone inside the system before you can hope to create cost control measures, otherwise you have the constant problem of people dropping out and causing risk pool death spirals — as with Anthem in CA.
I did not mean to imply they were at odds – quite the opposite. I said that high costs is what is driving the uninsured problem. After all, if medical care was cheap (like it used to be), or at least in line with what other countries pay, more people could afford to buy private insurance and the uninsured would be less of a problem.
If a bill came forward which addressed necessary systemic change as well as extended coverage for the uninsured then I could support it. But the Democratic bills under consideration don’t do that – they only address coverage.
That certainly drives costs up, but how big of a factor is it? After all, everyone is paying into the medicare system yet costs there are growing just as fast as private and employer-based insurance. Same with the military Tricare insurance – the same will all insurance whether it’s provided by government, employers or private insurance companies. So I don’t see how mandating coverage for a few million healthy uninsured folks will substantially affect costs throughout the whole system.
As for Anthem, consider the math. Insurance premiums have to rise as the cost of what’s insured rises. If health care costs increase by 6% a year, then premiums must rise by that amount as well. So the 39% that Anthem is raising prices represents less than 6 years of cost growth (at 6% a year). Maybe Anthem’s rate increase is unreasonable (I don’t know), but I don’t think it’s completely unreasonable when one looks at growth rates and the effects of compound interest on costs. So what can federal regulation really do? If the insurance company can show they are paying 100% medical costs plus 5% or whatever in administration/overhead, the rate increases will be approved. States that currently regulate premiums are already doing this and approving similar increases because those increases are based on the rising cost of care. The point being, you can’t regulate the cost of health care by making a show of regulating premiums at the federal level.
So again, my position is that all these problems in our system go back to one fundamental problem – that health care is too expensive and that expense is rising much faster than inflation and is on a unsustainable path. Any reform is doomed to failure unless that problem is address and coverage for the uninsured is no different.
Amen? The problem isn’t that people are denied health care. The problem is that health care is expensive. In spite of how expensive it is, people can get health care. Unfortunately, they often cannot afford insurance or are deterred from buying it when they can because it is expensive. There is no relation between military spending and the cost of health care or health insurance. Stupid comment by Sullivan.
Schmedlap: The point is that we keep saying that HCR is too expensive, but we’re perfectly happen to spend even more on Iraq and Afghanistan. Look, I agree, even if we pulled out of those commitments, people would still argue that HCR was too expensive. But Sully is making the point that money is fungible.
Money is technically fungible, but not for the federal government in many cases. Besides, we aren’t talking about money here, we’re talking about borrowed money, otherwise known as future taxes.
I promise to make this my last comment about domestic politics because I’m sure my comments get tiresome, but this just annoys the hell out of me to see someone with a brain cheering this nonsense on.
Of course money is fungible. Of course that is a necessary underlying assumption of what he stated. But that was not his point. If it was his point, then he would have used much simpler examples to more clearly (and correctly) illustrate it, such as explaining that the 1990s peace dividend allowed us to reduce the deficit. He would not have trotted out two controversial issues that rile people up and make their brains stop functioning, such as health care and current military operations. His remark is BS and it was tailored for a target audience that has an average IQ of about 30 points lower than yours. I don’t understand why it resonates with you.