David R. Henderson writes:
The problem: Doctors cannot legally charge more for a service than the amount that Medicare pays, and Medicare often pays a low amount. That’s a classic recipe for a shortage of doctors.
The problem starts with the Center for Medicare and Medicaid Services (CMS), the federal agency that sets prices for the medical services of Medicare patients. CMS is really a giant central-planning agency. It sets hundreds of thousands of prices. What are the odds that it sets all the right prices? Zero. In fact, with central planning, an organization like CMS cannot ever know what the right price is.
An obvious solution to this problem is to have a free market in healthcare—with no Medicare. But since that is unlikely to happen soon, incremental changes can be made to move closer to a free market. Despite the socialized system of CMS, it’s possible to approximate free-market prices with “balance billing.” In its purest form, doctors would be able to charge whatever they want for their services, and patients would pay the difference between that price and the amount Medicare pays. Today, doctors who accept Medicare reimbursement are not allowed to charge anything more.
With balance billing, many fees would certainly increase—at least for those seniors who are willing and able to pay them. But it would also stem, and even reverse, the exit of doctors from Medicare. And that’s not all. As any health economist can tell you, one of the biggest problems with our healthcare system, one that existed even before ObamaCare, is that the majority of what people spend on healthcare is “other people’s money.” One reason we know so little about prices is that few of us actually pay the price of medical care. Instead, we pay nothing, a small co-payment, or a small percent of the price. The main thing I learned in my two years as the senior economist for health care policy with President Reagan’s Council of Economic Advisers is that health care costs so darn much because we pay so darn little for it. Why hesitate to say yes to a $500 test your doctor wants to order if you know that you will pay only $50 for it?
Read more: Medicare and the Free Market | Hoover Institution.
In Forbes, Paul Hsieh, MD writes:
Any government-funded health care system must necessarily set limits on medical spending. No government can issue a blank check for unlimited medical care for everyone. The only issue is where and how it draws that line.
This is an inherent part of any socialized medical system, such as in Canada or the UK. Put simply, if you expect “somebody else” to pay for your health care, then “somebody else” will ultimately decide what care you may (or may not) receive. …
Who should decide what care you receive towards the end of your life — you or an “administrative tribunal” of “experts and wise community members”? If you want to retain control over your medical care, you must retain control over your medical dollars. He who pays the piper calls the tune. Make sure the tune being called is the one you want.
via Who Decides What Medical Care You Receive At End of Life?.
From Peter Suderman at Reason:
The basic issue here is that when you cap prices on services, you end up creating a system in which providers have a huge incentives to bill for more services. As Brookings health policy scholar Dr. Darshak Sanghavi tells the Times, “The notion is you can make end runs around price controls by increasing the number of things you do and bill for.”
Indeed, pricing systems end up creating opportunities for consultants and middlemen to help doctors figure out how to maximize their billing
More: How Price Controls Contribute to High Medicare Bills.
Health care economist John C. Goodman writes:
Paul Ryan proposed a private health insurance alternative to Medicare for future retirees, liberal critics pounced. It’s another scheme to undermine health care for the elderly by “privatizing” and “voucher-izing” the program, they said.
Yet, almost one third of seniors are already in private health insurance plans. They are called Medicare Part C, or Medicare Advantage, plans. And you would be hard pressed to find any Democratic office holder who wants to abolish them. The reason? Seniors choose to be in these plans because they like them better than traditional Medicare.
Read more: Let’s Privatize Medicare – John C. Goodman.
At Forbes.com, Grace-Marie Turner summarizes the new taxes imposed by Obamacare:
- Medical Device Tax
- A new Surtax on Investment Income
- A new Medicare Tax
- The new Flexible Spending Account Tax
- ObamaCare also tightens the screws on Itemized Medical Deductions
Many more taxes are coming, including a “tax penalties” for individuals and businesses who don’t comply with ObamaCare’s mandate that they purchase government-approved health insurance. The Congressional Budget Office expects these penalties for non-compliance to bring in $160 billion in the first decade they are in effect.
ObamaCare’s $1 trillion in total tax increase hit everything from health insurers, drug companies, and tanning salons to Health Saving Accounts and – eventually – high-cost employer-based health insurance.
Read more: As 2013 Begins, Get Ready For An ObamaCare Tax Onslaught.
See also: “An Unhealthy Dose of Obamacare Taxes” at Reason.com.
At the Daily Caller, Rituparna Basu of the Ayn Rand Institute writes:
According to Medicare’s trustees, Medicare will go bankrupt in the next 12 years (some argue it could happen as early as 2016). The program is already running combined deficits of close to $290 billion, and its long-term unfunded liabilities top $30 trillion (some argue they could be more than $89 trillion). Cato’s Michael Tanner puts the lower estimate of Medicare’s unfunded liabilities in perspective: “[W]e could confiscate every penny belonging to every millionaire and billionaire in America and still cover less than a third of Medicare’s red ink, even using the lowest estimate for its unfunded liabilities.”
Despite these facts, we continue to treat Medicare as untouchable. …
Why, despite its impending fiscal collapse, is Medicare untouchable? …
Is it proper for the government to force people into such a scheme? Is it right to make the medical expenses of some the unchosen obligation of others? Is Medicare compatible with the founding principle of America — that each individual has a right to live for the sake of his own happiness and not have the fruits of his productivity confiscated for others?
These are the kinds of fundamental questions we must be willing to ask. It really should not be surprising that when we divorce benefits from costs — a person’s consumption from his production — as Medicare does, bankruptcy looms.
Read more: It’s time to unplug Medicare’s third rail | The Daily Caller.
From the American Enterprise Institute:
In “A Nation of Takers,” author Nicholas Eberstadt of the American Enterprise Institute draws on an impressive array of data to detail the exponential growth in America’s entitlement spending, which today accounts for a full two-thirds of the federal budget. Eberstadt shows in unflinching detail how this runaway spending is having a very real, long-lasting, negative impact on the character of our citizens.