The Medicare Hospital Insurance Fund -- otherwise known as Medicare Part A -- will go bankrupt in 2017 according to the 2009 Anual Report of the Medicare Trustees issued in December of last year.
This fund covers "inpatient care in hospitals, nursing homes, skilled nursing facilities, and critical access hospitals," including things like home health care, hospice care, and nursing home care. It is a critical program for our elderly. But, as the Trustees warn:
Medicare's financial difficulties come sooner—and are much more severe—than those confronting Social Security. While both programs face demographic challenges, rapidly growing health care costs also affect Medicare.
This highlights what I think is the critical error in the way President Obama and supporters of health care reform have engaged the opponents of the program. They -- WE -- have failed to clearly, concisely, and starkly explain the harsh reality of FAILING to enact health care reform that truly controls health care costs -- not just provides "universal coverage."
If you listen to the inchoate rage at the Democrartic plans for health care refom -- and screen out the deliberate misinformatin, lies and craziness -- the underlying anxiety is that the Government is going to injustifiably intervene in, and "take over" national health care -- either directly, or indirectly through regulation of the market. Emphasis on the word "unjustifiably."
The reason they are scared -- is in large measure because they do not know of, or understand the actual COSTS of doing nothing, and how dire are the consequences of doing nothing.
According to the Medicare Trustees, here is what would be required to make just Medicare Part A solvent (this doesn't even include Medicaid, and the other parts of Medicare):
"The projected date of HI Trust Fund exhaustion is 2017, two years earlier than in last year's report, when dedicated revenues would be sufficient to pay 81 percent of HI costs. Projected HI dedicated revenues fall short of outlays by rapidly increasing margins in all future years. The Medicare Report shows that the HI Trust Fund could be brought into actuarial balance over the next 75 years by changes equivalent to an immediate 134 percent increase in the payroll tax (from a rate of 2.9 percent to 6.78 percent), or an immediate 53 percent reduction in program outlays, or some combination of the two."
Read that again. To obtain actuarial balance -- you would have to either increase the payroll tax by 134% -- or cut Medicare Part A benefits spending by over 50%.
There are two other options to bring the fund into actuarial balance. The first is to simply finance the shortfall through massively increasing our national debt -- i.e defecit financing. This would be a disaster for our country in the mid to long term.
The other option is to TOTALLY REFORM OUR NATIONAL HEALTH CARE SYSTEM TO GET HEALTH CARE INFLATION UNDER CONTROL.
This is the approach that President Obama is taking. He's not jacking up people's payroll taxes by 134%. He's NOT slashing Medicare benefits by 50%. And, he's not trying to pay for it through massive defecit spending. Instead he's trying to reform the entire health care system.
In my view, while President Obama has talked about the "cost of doing nothing," repeatedly, he has never laid out the probem in such stark terms. He must articulate the 4 options we have to solve this problem. And then explain why health care reform is the proper solution to this problem.
There are other reasons why we need a national health insurance reform plan, of course. It is a crime that tens of millions of Americans go without needed health insurance. It is also becoming a crushing burden on businesses, and hurts their ability to generate jobs and compete internationally.
But, the demographic of the town hall protesters, in my mind, would be most influenced by the arguments I am maming in this diary. Polls indicate that older americans are the people who are most skeptical of health care reform. They are also the most susceptible to media manipulation. (These are generalizations -- not hard and fast rules).
By emphasizing the necessaity to "save medicare," I think President Obama would make some headway with this group. In addition, he may get more favorable media coverage from the "sensible centrists" in the press corps who think the height to statesmanship is to tackle the long term structural deficit problem.
I also believe that the President and WE would stop attacking the protesters, per se. If there are egregious examples of proveable astroturf, craziness or lying -- we should most definitely point it out. But, polls show that demonizing the protesters as a whole is backfiring on us.
The latest Gallup poll shows that those who are following the protesters are more sypathetic to their position and believe that it's just "democracy in action." This doesn't mean we shouldn't respond aggressively to them. It does mean that we should be acknowledging their concerns, and addressing them head on -- not belittling them in general.
So, in sum -- we should refocus the debate on the very real danger of doing nothing. We should recast this as a way to save cherished programs like Medicare from disaster. And we should emphasize that the alternatives to reform include a massive increase in the payroll tax, exploding the defecit, or slashing medicare benefits by 50%. Finally, we should not lump all health care protesters into one TEAdeather basket. Separate the wheat from the chaff, and sympathetically seek to educate and inform misinformed and scared seniors about the program -- while respecting their right to voice their concerns.
[I reserve the right to update this diary to correct typos or other grammatical mistakes].