Thursday, April 2, 2009

Question to Republicans: If the Government Can’t Afford Entitlements, will Shifting Cost Burden to Individuals Make it Any More Affordable?

The title says it all for me. I’ve been asking this question for years. The sad truth is, government can’t “subsidize” a person’s premium in a way that saves the government money without increasing that person’s out of pocket costs.

Another words, if the government were to fully subsidize a persons Medicare payments, then the cost of Medicare would stay the same. If the government wanted to save money, than it would have to pay less than the normal Medicare premiums, thus shifting the additions cost to the individual. Sounds like an indirect tax increase to me. It would also reduce the public buying power from the largess of the government to the disadvantages of a single individual.

This give-a-way to the insurance industries appetite for bigger profits and built in customers is described in this AP article:

In the House, Republicans unveiled a budget plan that gradually would eliminate the traditional fee-for-service Medicare program, offering a stark - and politically problematic - alternative to blueprints from Obama and his Democratic allies. The plan would have future Medicare beneficiaries - people 54 and younger - enroll in private health insurance plans and receive a subsidy on their premiums.

Democrats warned that the GOP proposal would result in sharply higher costs for the elderly as the value of the subsidy fails to keep up with health care inflation.

Of course, Republicans knew that. This makes them all the more treacherous.

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