Home Economics Obamacare is the Answer, Ryancare the Disaster

Obamacare is the Answer, Ryancare the Disaster


There were people who thought Paul Ryan was a genius. Then Democrats and Independents and Seniors began to analyze his plan.

He quickly became a dunce. The Republicans had no other budget plan. So they voted on it. They passed it in the House. The Democrats, who could not believe their good fortune, quickly pounced on it like a pack of ravenous hyenas.

The reason? Ryan’s plan clearly does away with Medicare. This was not a surprise to the Republicans. Nor was it a surprise to their so-called “mavericky” Tea Baggers. They read it and they voted it in. They voted for the Ryan budget that would dismember Medicare for those now aged 54 and under when they reach 65.

FreedomWorks, the Koch Family organization, is now sending messages to all Republican House members, trying to get them to defend the plan. It won’t work. It is indefensible. The Kochs don’t get it. Most people don’t have 40 billion dollars. They need Medicare when they retire because health care costs can bankrupt you. And do.

Republicans can’t defend it. Ryan himself was booed at his own Town Hall by his own formerly admiring and loyal voters…his Republican voters. Here was a supposedly admired Republican congressman–the creator of the next budget if it were to pass–booed by his own Republican constituents at a meeting that he called.

The people of Wisconsin aren’t fooled. They get it. They also booed him over giving tax breaks to the rich. He says that it is necessary because “small businesses create most of the jobs.” That may be true, but most small businessmen are not billionaires or even millionaires. He voted for tax cuts to billionaires. His own constituents booed him.

You don’t need to be an economist to see what is going on here. Reagan cut taxes from where they were balanced to a place where we had huge deficits every year. The result of that was that by the time George W Bush came into office, we had $5 trillion in debt. That means…by simple arithmetic, that over 8 years George W. Bush and his boss, Dick Cheney, spent another $7 trillion. That averages almost a trillion a year.

Then they left us a stock market crash in the fall of 2008 resulting in a soft Depression or a very hard Recession…choose your own title for it…that has cost another $2 trillion. In other words, we cut our income by about a half trillion a year for the last 30 years and picked up almost $15 trillion in debt.

You can’t continue in that way. And what the Ryan Republicans want to do is to now cut your Social Security and your Medicare telling you that this is the only option to save them. The Republicans have had control of the propaganda machinery so long that they think that they can simply say anything and the hicks will believe it.

The fact is that what we really need to do is two fold. One: create 5 million jobs rather than spending the same amount on welfare and unemployment. We are not going to let people starve, no matter what the Republicans want, so let’s get to it and start creating the grid and the solar energy and the hydrogen powered semi-trailer trucks and the network of electrically powered transit vehicles. Economists say it will jump-start the economy.

We can hire a good half of all the people we need to hire just to get those jobs done. That will create other jobs in restaurants, dry cleaners, lawn services, painters, carpenters…all the artisans that make up our 80.6% service economy.

Just as was done in the Clinton years when we had surpluses, tax increases will stimulate the economy, not hinder it. The second part is that we need to tax the top one percent about 50% of their income over half a million a year. Yes, they will howl and scream but they will still have more money than most people could even imagine.

Our budget will be balanced and we will save Medicare and Social Security…even though Social Security is not as endangered as the Republicans pretend that it is. Our national revenues are running at about 15% of GDP. We historically run about 20% and we need to run about 21% until we can get this debt from all these tax breaks…all this looting of the Federal government…back under control for a few years.

Ryan’s plan wants to cut spending by about half and that is not only unworkable, it is preposterous. We spend something like 15% of GDP, maybe a little more. We need to drop that down to about 10%, maybe even eventually to 8%. The world is becoming more digital every day. Most of what the government does is record keeping. That could be made more efficient.

As to Medicare and Medicaid, Ryan uses these programs as a vehicle to cut budgets in his plan. He wants to give Seniors a voucher for some amount of money, almost certainly not as much as they will need, to buy health insurance. The health insurance companies will still be making profits, costs will still be going up.

Costs will go down, yes. Why? Because under Ryan’s plan the premium costs are shifted to the Senior citizen, not the government. Medicare will be gone. There’s no debate about that. It’s part of the Ryan plan. Seniors will be paying more of the bill. That’s how Ryan balances the budget. You’ve heard it and it’s true. He balances the budget on the backs of Senior citizens. But always remember….not on the backs of the rich Senior citizens.

Here’s the alternative and it is simple and makes much more sense. You use the very well thought-out Obamacare plan. Here’s how it will reach the same budget goal while keeping Medicare. First, as in the current phase, you prepare the health insurance companies for the shock of not making all that excessive profit on the American Middle Class.

They know already that in in 2013 we need everyone to be able to buy health insurance. They will have to guarantee coverage. Obamacare will not be repealed, so they need to plan for it now. Of course, if they don’t like the Affordable Care Act, after 2012 we could introduce something like Medicare for Everyone. They would quickly scramble back to Obamacare.

So, no one will be left uninsured. All plans will have certain minimum stuff and no one can be turned down. There will be large, multi-state regional marketplaces which will sell health care insurance. It really will be free market competition. So the insurance companies won’t like it, but more people will be able to afford good health insurance.

Small businesses (under 250 employees will be exempted) will have a very strong incentive plan to buy insurance. Individuals will be asked to buy it or pay the government some money to cover their costs…the ones that they will incur, statistically speaking, at the emergency room. The poor will get vouchers that will help them pay for insurance and the insurance will be the same as everyone elses. There won’t be Medicaid. Everyone will have at least the same minimum insurance, even if they are poor.

There are about a dozen other ways that health care costs will be reduced by this, just as is happening now in Massachusetts. There will be more family practitioners. Panels of doctors will be recommending new and better procedures. (For example,advances like laparoscopic surgeries which are less invasive and less costly could be recommended to replace outmoded and more expensive types of operations.) When all these things begin to take place…some have already, like the reduction in prescription drug costs for Seniors…cost will keep dropping and soon we will be much closer to European health costs.

The Republicans aren’t stupid nor are they ignorant. They know all this. But remember that they no longer work for the American people…not any segment of the average working man. They work for big corporations and very wealthy men, billionaires, who expect that their taxes will stay the same or go down, not up. They will do anything that they can to prevent Obamacare from being completely fulfilled.

Is it evil to do this or merely protecting your income from taxation? How much money is enough…a million a year? Five million a year? Fifty Million? Society has to make that decision, as the Europeans have and others. There is a limit and normally that limit is where the person could no longer spend the money and where society’s basic needs are met.

The one thing that all the analysts of the Paul Ryan budget agree upon is this: he closes down Medicare and the vouchers, as they are designed, even if medical costs are lower, are designed to make Seniors then pay more for health care than they do now. Yes, it does reduce the medical costs portion of the budget. It lowers them by putting the burden on the backs of Seniors, making them pay more for health care than they do now, even if they can get it. Remember, the Paul Ryan plan assumes that we would repeal Obamacare, which means repealing the guarantees that start in 2013 that no one can be turned down for health insurance because of a pre-existing condition or because of age.

It is necessary to point out something at this stage. Many Republicans, including Paul Ryan, have mistakenly said that President Obama will raid Medicare of $500 billion. This is not true. When the Prescription drug bill was introduced, the Republicans under Billy Tauzin (who went on to be the pharmaceutical lobbyist for $2 million a year) and Tom DeLay (who went on to be disgraced and kicked out of the House and is now on trial for corruption) tried to get Medicare pulled away from government by introducing Medicare Plus.

If you opted for Medicare Plus, you went into a private system. Unlike Medicare, the private Medicare Plus system could drop you from coverage. But if they did not, you got a few more things than under basic Medicare and you paid a little more. Seniors liked it because it paid for prescription drugs in full and it paid for some other things, even though it cost a little more. But Democrats didn’t like it because it opened the door to having millions of Seniors out on the street with no health care at all, starting all over trying to get back into Medicare.

Bush started Medicare Plus, a private system, in order to give some of his friends in health insurance a bigger piece of the pie while the Republican Congress was divvying up prescription drug subsidies (about $600 billion over ten years.) But it cost the government an extra $500 billion for this private system over and above what regular Medicare would have cost. So that is what Obamacare removes…the extra cost of those Medicare Plus programs that only certain Medicare eligible people have. They will now get regular Medicare at a lower cost than they have been paying on Medicare Plus.

So Ryan’s budget does not “save” Medicare. It eventually eliminates Medicare and gives a modest subsidy to people who will then have to go out and find health insurance on their own. In other words, it is merely a thinly-disguised version of a health savings plan with a little subsidy thrown in. Medicare will not go bankrupt if we enact the Affordable Care Act (Obamacare) and also raise some taxes. Those two things will bring the Medicare program into balance with money left over.

It should be noted that we will all pay more taxes if the rich pay more taxes. We know that repealing the taxes for the rich means repealing those segments for the middle class. The poor have finally been eliminated from the tax rolls, except for basic FICA, which is a good hunk of change if you are making very little.

What must be understood and related to everyone is that the new health care reform act, when fully enacted and in place, will not only reduce health care costs and Medicare costs, but it will reduce the budget automatically. It will also reduce individual family health care costs. The continuance of the Obama Affordable Care Act is the single best thing anyone could do to reduce the long-term debt.

Will there be rationing of health care? No, there will not. This has been asked and answered many, many times. it started out as the “death panels,” remember? What the Republicans call rationing is the panels of expert surgeons and physicians who will research new and better techniques and propose more efficient methods and procedures. Some of these Republican accusations get pretty remote and silly.

Medicare can be made solvent. That is not a problem. But no budget deficit can be solved any longer without substantial tax increases. It simply isn’t possible. So if the Republicans were serious, they would not have given the rich another $800 billion tax break this year. It simply proves that they are not serious and so it makes little difference what they say about health care, they are not serious people and not serious about reducing budgets or about saving Medicare.

Another way to view the Ryan plan is to see that all it does is take some payroll taxes and uses them to subsidize part of your post-age-65 health care premiums. It does not force health insurance companies to take people over 65. So basically it gives you some income to use to buy health insurance, a little more each year, but not enough to pay the entire thing.

The Ryan plan does nothing to control prices. It allows prices to go up faster than subsidies. Health care for Seniors will be what it was before Medicare. That is what the Republicans and their backers want. The whole thing is another Bernie Madoff-style scam. It will only damage, not help, Seniors.

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