The Mutually Assured Denial of Medicare

Denial is a process of ignoring facts for reasons that seem emotionally appealing.

In the case of Medicare, one of the primary reasons the United States government has gone broke (and getting more broke all the time), denial is rampant.

Sometimes, denial consists of plain facts in front of your face, facts you choose to ignore, evade or minimize out of some rationalization.

Medicare is more complex. It’s easier for most people to say, “Well, those politicians just have to get their heads together and figure this out.”

That’s all well and good. But if you take the time to look at the hard facts, and what has been going on with Medicare (both parties, for decades), then the ugly truth will lead you to consider the possibility that this unreservedly popular government program simply is not sustainable.

It’s easy to blame the problems on partisan politics. Republicans will say the Democrats are budget busting spenders; they are, but so are Republicans. George W. Bush expanded Medicare and broke the record on domestic spending until Barack Obama came along and broke his record. Democrats will always say the Republicans are mean, and this message always plays well with their supporters, who faithfully hold to the conviction that government socialism is a no-brainer if only hard-nosed Republicans would get out of the way. However, it’s not mean to simply face up to facts. It’s much meaner to evade them. Medicare is broke, and the nation simply cannot support it, unless exponentially increasing and indefinite expansions of debt and taxation do not matter.

Here’s how the problem stands at present, from The Wall Street Journal on 3-18-15:

House members are working on legislation to provide a permanent repeal of provisions capping Medicare reimbursements to physicians. As past debates have shown, failure to identify spending cuts to offset the pay increase to doctors would significantly impact seniors’ Medicare premiums.

…In general, Congress financed these short-term doc fixes by reducing spending elsewhere in the budget. More than $165 billion worth was covered this way. But lawmakers used two statutory mechanisms to lower the cost of these short-term spending bumps and promised to recover the remaining costs in the future. Each time it has come up, Congress has kicked the proverbial can down the line.

When Medicare passed in 1965, there were basically two objections. One, that it would lead to socialized medicine. Two, that it would bankrupt the country.

Actually, Medicare did not lead to socialized medicine; it is socialized medicine, for the elderly. Socialized medicine for the whole country was not politically popular in 1965. Supporters of socialized medicine knew that the next best thing, from their point-of-view, was to pass socialized medicine for the elderly, which in time would lead to government control of the whole medical system. Plus, by socializing medicine for the elderly, you have captured the segment of the population who spends the most time using doctors and hospitals.

Two, Medicare already would have bankrupted the government, were it not for these “doc fixes” which provide the illusion that Medicare isn’t spending as much as it is. Actually, based on the current national debt and federal deficit, by any reasonable standard it’s fair to say that the government is already bankrupt (even with the “doc fixes”), and that the situation will only worsen as (1) more baby boomers retire and become eligible for Medicare, and (2) Congress faces the music — if it does — and gets rid of the number fixing.

The one argument never made against Medicare — not in 1965, and certainly not today — was one based on morality. The moral argument against Medicare, like any form of socialized medicine, is that it forces doctors into government-run collectives and requirements it has no business doing. Medicine should be an unencumbered transaction between provider of care and recipient of care. The market should be left alone so providers and patients can best figure out how to finance it. In the era of modern medicine, at least 50 years and counting, there never has been a free market, only the government monopolization mandated by Medicare. Ultimately, this harms patients as well (and we are all potential patients, all of whom will eventually depend on Medicare for coverage.) There’s nothing moral about socialized medicine, any more than there would be about a government takeover of any other industry or field, such as cell phones, fast food, haircuts, groceries or vacation homes.

Put it this way. Medicare is not an option. At age 65, you get Medicare, like it or not. You have no choice — and never did have a choice — about how to finance your medical coverage or care in any other way. Because government has monopolized medical care for the elderly for half a century now, there is virtually no marketplace in which you might have made choices. If you’re 65 or approaching 65, you’re stuck with the likes of John Boehner and Nancy Pelosi determining the nature, cost and potentially even the outcome of your medical status. If you’re 20-something or 30-something, or even 40-something, and if you work and pay taxes, you’re being asked to support the remnants of this bankrupt program which almost certainly — by the government’s own numbers — will not exist when it comes your turn to be eligible for Medicare at age 65. If this were a private operation or scheme, the government would have shut it down and jailed its operators long ago. Yet the hapless, morally questionable and almost completely unaccountable politicians we have put in charge of this impossible and unsustainable mess — and who will never tell us the truth about it for fear of making us mad — are the people we’re counting on to rescue this program from itself.

Although it was (and still is) unthinkable, to most, to make a moral argument against Medicare (even though it is socialized medicine), the government has implicitly conceded the issue by paying doctors and hospitals as much as possible — way more than the government could afford — for decades, including disguising some of these payments in the form of things like the “doc fix.” This is what happens when you substitute market mechanisms (i.e, human choice and thought) for government mechanisms (i.e., emotional, political and strictly short-range factors).

Putting government politicians in charge of medicine for the elderly is kind of like handing a spoiled, entitled young adult a billion dollar inheritance and expecting him to spend and invest wisely. On top of it, the spoiled, entitled young adult is given the power of the military and the power to manipulate the currency system upon which his millions are based to his own whims and desires. How well would that work out?

Politically and psychologically, the “doc fix” is easy to understand. It’s a way to keep doctors (mostly represented by the AMA) from getting angry or upset, and perhaps walking away from Medicare. It’s something that, in the end, Democrats and Republicans usually agree upon, because it’s a way for them to engage in the mutually assured denial required to keep this program going — or, more specifically, to make it look to unaware or even unthinking citizens that “the problem is being fixed, no worries, just keep going about your business, no cause for panic here.” Remember the man behind the curtain in The Wizard of Oz movie? It’s like that.

The House Republican leadership is well aware of the premium effects of an unpaid-for SGR repeal. When then-Speaker Pelosi brought an unpaid-for SGR repeal bill to the House floor in November 2009, then-Minority Leader Boehner called it an “absolute train wreck,” because it “forces seniors to pay higher premiums.” All but one House Republican voted against the legislation—largely because it did not include spending cuts to pay for the repeal.

It remains unclear how many House Republicans today might change their position from 2009, or what their public justification for doing so would be. What is clear is that any unpaid-for legislation would have a fiscal impact on America’s seniors as well as the federal budget.

The implications are clear. There are only two ways to make Medicare sustainable. One is to start requiring seniors to pay more for it. That is not something it seems that John Boehner or Nancy Pelosi, or any other politician seeking power, will ever permit. Even if they did, to be fair, they would undoubtedly be thrown out of office for tampering with a program millions have come to feel entitled to have, and (in the absence of a marketplace), for which people have had no alternatives.

The other option is to enslave doctors outright, or to move in that direction. It would most likely start out as soft slavery. Doctors will be told, in effect, “You have to accept the pay cuts.” (Imagine elected leaders accepting 20-30 percent pay cuts.) Or, “You can’t leave Medicare. You have to keep working with the program, regardless of the results.” It’s not hard to imagine politicians of either party (I’m betting it will end up being Republicans) calling for sacrifice and declaring a medical health emergency, in which doctors — not unlike Communist countries of past and present — will be forced to work purely for service, with long lists of patients in need facing ever lower quality of services. If we refuse to accept the fact that Medicare cannot sustain itself, and that the only solution there ever was — and ever will be — is a private marketplace, what else can we expect to prop up the illusion of socialism?

The truth is hard to face, but the truth also sets us free. Medicare does not work in practice because it was always wrong in theory. It’s socialism, American-style. It had to lead to this, because it’s the nature of socialism, every time it’s tried. Human beings are not objects, slaves or parts in a machine to be operated by officials from above. The bankruptcy and naked evasion you see in Washington are inescapable consequences of this fact.