President’s Executive Order Shows Two Contrasting Visions of Health Care

As Washington remains consumed by impeachment fever, President Trump returned to the issue of health care. In an executive order released Thursday, and a speech at The Villages in Florida where he spoke on the topic, the president attempted to provide a vision that contrasts with the left’s push for single-payer socialized medicine.

This executive order focused largely on the current Medicare program, as opposed to the existing private insurance marketplace. By promoting new options and focusing on reducing costs, however, the president’s actions stand in opposition to the one-size-fits-all model of the proposed health care takeover.

The Administration Wants To Explore These Proposals

One fact worth repeating about Thursday’s action: As with prior executive orders, it will in and of itself not change policy. The more substantive changes will come in regulatory proposals issued by government agencies (most notably the Department of Health and Human Services) in response to the executive order. While only the regulations can flesh out all of the policy details, the language of the order provides some sense of the proposals the administration wants to explore.

Modernized Benefits: The executive order promotes “innovative … benefit structures” for Medicare Advantage, the program in which an estimated 24 million beneficiaries receive Medicare subsidies via a network of private insurers. It discusses “reduc[ing] barriers to obtaining Medicare Medical Savings Accounts,” a health savings account-like mechanism that gives beneficiaries incentives to serve as smart consumers of health care. To accomplish that last objective, the order references broader access to cost and quality data, “improving [seniors’] ability to make decisions about their health care that work best for them.”

Expanded Access: The order seeks to increase access to telehealth as one way to improve seniors’ ability to obtain care, particularly in rural areas. It also looks to combat state-imposed restrictions that can limit care options, and can lead to narrow physician and provider networks for Medicare Advantage plans.

More Providers: The order discusses eliminating regulatory burdens on doctors and other medical providers, a continuation of prior initiatives by the administration. It also references allowing non-physician providers, such as nurse practitioners and physician assistants, to practice to the full scope of their medical licenses and receive comparable pay for their work.

Entitlement Reform: Last, but certainly not least, the order proposes allowing seniors to opt out of the Medicare program. This proposal would not allow individuals to opt out of Medicare taxes, but it would undo current regulations that require seniors to opt into the Medicare program when they apply for Social Security.

As I had previously explained, this proposal stands as a common-sense solution to our entitlement shortfalls: After all, why should we force someone like Bill Gates or Warren Buffett to accept Medicare benefits if they are perfectly content to use other forms of health coverage?

Democrats’ Health Care Vision Is Medicare for None

Of course, many on the socialist left have made their vision plain for quite some time: They want the government to run the entire health-care system. Ironically enough, however, Sen. Bernie Sanders’ single-payer legislation would abolish the current Medicare program in the process:

(1) IN GENERAL.—Notwithstanding any other provision of law, subject to paragraphs (2) and (3)—

(A) no benefits shall be available under title XVIII of the Social Security Act for any item or service furnished beginning on or after the effective date of benefits under section 106(a)

As I first noted nearly two years ago, this language makes Sanders’ proposal not “Medicare for All,” but “Medicare for None.” It speaks to the radical nature of the socialist agenda that they cannot come clean with the American people about the implications of their legislation, such that even analysts at liberal think-tanks have accused them of using dishonest means to sell single-payer.

Just as important, “Medicare for None” would take away choices for seniors and hundreds of millions of other Americans. As of next year, an estimated 24 million seniors will enroll in Medicare Advantage plans to obtain their Medicare benefits. As I outline in my book, Medicare Advantage often provides better benefits to seniors, and at a lower cost to both beneficiaries and the federal government. Yet Sanders and his socialist allies want to abolish this popular coverage, to consolidate power and control in a government-run health system.

The actions the administration announced on Thursday represent the latest in a series of steps designed to offer an alternative to the command-and-control vision promoted by the left. The American people don’t deserve socialized medicine, but they don’t deserve the broken status quo either. Only true patient-centered reforms can create a health-care environment that works for seniors and the American people as a whole.

This post was originally published at The Federalist.

Bernie Sanders’ Single Payer Bill Provides Benefits for Billionaires

On Wednesday, socialist Sen. Bernie Sanders plans to introduce the latest version of his single-payer health-care program. If past practice holds, Sanders will call his plan “Medicare for All.” But if he wants to follow Medicare as his model, then the Sanders plan could easily earn another moniker: Benefits for Billionaires.

An analysis released by the Congressional Budget Office (CBO) in August demonstrates how Medicare currently provides significant financial benefits to seniors at all income levels, including the wealthy. Specifically, the CBO paper analyzed lifetime Medicare taxes paid, and lifetime benefits received, by individuals born in the 1950s who live to age 65.

The CBO analysis confirms prior work by the Urban Institute—no right-wing think tank—that Medicare pays out more in benefits than it receives in taxes at virtually all income levels. For instance, according to Urban’s most recent study, a high-earning male turning 65 in 2020 will pay in an average of $123,000 in Medicare taxes, but receive an average of $222,000 in benefits.

Melinda Gates Doesn’t Need Government Health Care

Some may quibble with the work by CBO and Urban Institute for containing an important oversight. In analyzing only Medicare benefits and Medicare taxes paid, the two papers omit the portion of Medicare’s financing that comes from general revenues—including the income taxes paid primarily by the wealthy. While it’s difficult to draw a precise link between Medicare’s general revenue funding and any one person’s income tax payments, it’s possible that—particularly for one-percenters—income taxes paid will offset the net cost of their Medicare benefits.

But regardless of those important details, the larger point still holds. Even if her taxes do outweigh the Medicare benefits received, why does Melinda Gates need the estimated $300,000 in health care benefits paid to the average high-income woman born in the 1950s? Does that government spending serve a useful purpose?

We Don’t Have Money to Subsidize the Rich

Yes, Medicare currently does include some means testing for wealthy beneficiaries, in both the Part B (physician) and Part D (prescription drug) portions of the program. But common sense should dictate first that wealthy individuals not only should be able to opt-out of Medicare if they so choose—because, strange as it sounds, the federal government currently forbids individuals from renouncing their Medicare benefits—wealthy seniors should not receive a taxpayer subsidy at all. Whether in Medicare or Sanders’ socialist utopia, the idea that Warren Buffett or Bill Gates warrant taxpayer subsidies defies credulity.

Despite this common-sense logic, liberals continue to support providing taxpayer-funded benefits for billionaires. In 2011, then-Rep. Henry Waxman (D-CA) said “if [then-Speaker John] Boehner wants to have the wealthy contribute more to deficit reduction, he should look to the tax code.” Perhaps Waxman views keeping wealthy seniors in Medicare as a form of punishment for the rich. After all, nearly nine in ten seniors have some form of supplemental insurance, and a form of “insurance” one must insure against may not be considered an unalloyed pleasure.

Regardless, Medicare faces its own financial reckoning, and sooner rather than later. In 2009—the last trustees’ report before Obamacare introduced fiscal gimmicks and double-counting into Medicare—the program’s actuaries concluded Medicare’s Hospital Insurance Trust Fund would become functionally insolvent this year. Given that bleak outlook, neither Medicare nor the American people can afford Sanders’ ill-conceived scheme to provide taxpayer-funded health benefits to wealthy 1-percenters.

This post was originally published at The Federalist.

Democrats’ Hypocrisy on the Trump Budget

As expected, the Left had a harsh reaction to President Trump’s first budget on its release Tuesday. Bernie Sanders called the proposed Medicaid reductions “just cruel,” the head of one liberal think-tank dubbed the budget as a whole “radical,” and on and on.

But if liberals object to these “draconian cuts,” there’s one potential solution: Look in the mirror.

And exactly who might be to blame for creating that toxic environment?

Democrats Are Using The ‘Mediscare’ Playbook

Democrats have spent the past several political cycles running election campaigns straight out of the “Mediscare” playbook. In case anyone has forgotten, political ads have portrayed Republicans as literally throwing granny off a cliff.

This rhetoric about Republican attempts to “privatize” Medicare came despite several inconvenient truths:

  1. The “voucher” system Democrats attack for Medicare is based upon the same bidding system included in Obamacare;
  2. The Congressional Budget Office concluded one version of premium support would, by utilizing the forces of competition, actually save money for both seniors and the federal government; and
  3. Democrats—in Nancy Pelosi’s own words—“took half a trillion dollars out of Medicare” to pay for Obamacare.

Given the constant attacks from Democrats against entitlement reform, however, Donald Trump made the political decision during last year’s campaign to oppose any changes to Medicare or Social Security. He reiterated that decision in this week’s budget, by proposing no direct reductions either to Medicare or the Social Security retirement program. Office of Management and Budget Director Mick Mulvaney said the president told him, “I promised people on the campaign trail I would not touch their retirement and I would not touch Medicare.”

That’s an incorrect and faulty assumption, of course, as both programs rapidly spiral toward insolvency. The Medicare hospital insurance trust fund has incurred a collective $132.2 billion in deficits the past eight years. Only the double-counting created by Obamacare continues to keep the Medicare trust fund afloat. The idea that President Trump should not “touch” seniors’ retirement or health care is based on the fallacious premise that they exist beyond the coming decade; on the present trajectory, they do not, at least not in their current form.

Should Bill Gates Get Taxpayer-Funded Healthcare?

That said, the president’s reticence to “touch” Social Security and Medicare comes no doubt from Democrats’ reluctance to support any reductions in entitlement spending, even to the wealthiest Americans. When Republicans first proposed additional means testing for Medicare back in 2011, then-Rep. Henry Waxman (D-CA) opposed it, saying that “if [then-House Speaker John] Boehner wants to have the wealthy contribute more to deficit reduction, he should look to the tax code.”

In other words, liberals like Henry Waxman, and others like him, wish to defend “benefits for billionaires”—the right of people like Bill Gates and Warren Buffett to receive taxpayer-funded health and retirement benefits. Admittedly, Congress passed some additional entitlement means testing as part of a Medicare bill two years ago. But the notion that taxpayers should spend any taxpayer funds on health or retirement payments to “one-percenters” would likely strike most as absurd—yet that’s exactly what current law does.

As the old saying goes, to govern is to choose. If Democrats are so violently opposed to the supposedly “cruel” savings proposals in the president’s budget, then why don’t they put alternative entitlement reforms on the table? From eliminating Medicare and Social Security payments to the highest earners, to a premium support proposal that would save seniors money, there are potential opportunities out there—if liberals can stand to tone down the “Mediscare” demagoguery. It just might yield the reforms that our country needs, to prevent future generations from drowning in a sea of debt.

This post was originally published at The Federalist.

Senate Democrats Defend Benefits for Billionaires

Amidst the ongoing discussion about the need to reform entitlements, this morning’s New York Times article on the payroll tax conference included these two interesting paragraphs:

The largest sticking point may be Medicare.  The House-passed yearlong extension would increase premiums for high-income beneficiaries and increase the number of people who would have to pay extra.  About 5 percent of beneficiaries now pay higher premiums based on income.  The proportion would eventually rise to 25 percent under the House bill and under a separate deficit-reduction plan proposed in September by Mr. Obama.

Senate Democrats want no part of that.  They say the White House proposal came as part of a broad deficit-reduction plan that included tax increases on the wealthy.  If Republicans will not make concessions on revenues, the Democrats are not going to give Republican Congressional leaders what they want most: a concession on entitlements to defang Democratic charges in the coming campaign that the Republican Party plans to dismantle the health care program for the elderly.

In other words:

  1. Senate Democrats will NOT reduce subsidized health benefits for billionaires like Warren Buffett and Bill Gates unless Republicans agree to a massive tax increase – at a time when long-term unemployment remains at record highs.
  2. Democrats do not want to deviate from prime electoral strategy – a “Mediscare” campaign designed to distract from the fact that their policies have failed to create the jobs that were promisedeven when it comes to reducing entitlement payments to billionaires.

Medicare faces a significant – and imminent – financial crisis.  The program is now running bigger deficits than Greece, and the President’s own Chief of Staff admitted that the program “will run out of money in five years if we don’t do something.”   This morning’s New York Times article only re-emphasizes a key difference between the parties: Democrats itching for a massive tax increase are unwilling to raise Medicare premiums on millionaires and billionaires to help improve Medicare’s solvency – because they would rather gain politically than fix the problem.

House Democrats’ Absurd Double Standards on Benefits for Billionaires

On Friday evening, Democrats on the House Energy and Commerce Committee sent out an analysis of the health provisions of the House Republican payroll tax proposal.  Of particular note is the following sentence: “Increases and other changes made to the premium structure of Medicare raise fundamental and difficult issues for the program and certainly should never be considered in the context of addressing short term issues.”  This sentence obliquely refers to the proposals for additional means-testing included in the House Republican payroll tax bill – which come directly from the deficit reduction proposal the President submitted to the Joint Committee earlier this fall.
There’s a good reason why House Democrats might want to be circumspect about criticizing the means-testing proposal – because their position results in what can most charitably be described as feats of tautological jujitsu:
  • Congress SHOULD raise taxes on “the rich” to pay for a short-term payroll tax extension – but SHOULD NOT take away taxpayer subsidies for wealthy Medicare beneficiaries to pay for a short-term “doc fix” extension;
  • Congress SHOULD pass the tax increases the President proposed in his September submission to the Joint Committee right away – but SHOULD “CERTAINLY” NOT pass proposals to reduce wealthy beneficiaries’ Medicare subsidies included by the President in the same September proposal without months or years more study;
  • Choosing not to subsidize the health benefits of billionaires like George Soros is a “difficult” decision, but raising taxes by trillions of dollars is easy; and
  • Taking away wealthy Medicare beneficiaries’ subsidies “raise[s] fundamental…issues for the program,” but raising taxes on job creators in the middle of a sluggish economy raises no concerns, fundamental or otherwise, about the impact on stubbornly high unemployment.
It’s clear that Medicare is in the midst of a fiscal crisis – the program is projected to suffer a record deficit of nearly $40 billion this fiscal year, a greater deficit than that faced by Greece.  Even President Obama has admitted that “if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up. I mean, it’s not an option for us to just sit by and do nothing.”  Yet House Democrats have articulated a philosophical position on which they are apparently willing to fight:  The holy right of people like Warren Buffett and Bill Gates to have their health benefits subsidized by federal taxpayers. 
So much for fighting for the middle class…

Democrats Defend (Medicare) Benefits for Billionaires

The latest version of Democrats’ payroll tax proposal includes two provisions designed to reduce federal welfare subsidies paid to millionaires and billionaires from the unemployment insurance and food stamp programs.  But it’s worth emphasizing that the new bill does NOT impose additional means-testing on Medicare (or Social Security, for that matter).

If ever there was a program in desperate need of reform NOW, it’s Medicare:

  • The Congressional Budget Office projects that Medicare Part A will spend nearly $40 billion more than it takes in this fiscal year, and run a further deficit of nearly $30 billion next year.
  • At a time when Europe faces major sovereign debt woes, Medicare is now running a bigger fiscal deficit than Greece.
  • The President’s Chief of Staff, Bill Daley, said in July that the program “will run out of money in five years if we don’t do something.”
  • And the President himself acknowledged that “if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up.  I mean, it’s not an option for us to just sit by and do nothing.”

The President’s most recent deficit submission proposed additional means-testing for wealthy beneficiaries.  One would think that a party breathlessly waiting to raise taxes on “the 1%” would be chomping at the bit to take Medicare subsidies away from people like Bill Gates and Warren Buffett.  Yet what have Democrats done on this Medicare reform?  Nothing.  And why do they want to do nothing?  In a word, politics:

  • One House Member objected to any agreement between the President and Republicans on fundamental entitlement reform, because reforming entitlements now would “cancel out any bludgeoning that Democrats might give the Republicans over Medicare and Medicaid.”
  • The Washington Post’s liberal Plum Line reported in July that Senate Democrats don’t want to pass Medicare reform because it would be “giving away the biggest [political] advantage” Democrats have had “in some time.”
  • In a story last week, Rep. Steve Israel, Chair of the Democratic Congressional Campaign Committee, “declined to say whether a [deficit] agreement to cut entitlements might have hindered his political strategy.”  In other words, Democrats WANTED the supercommittee to fail – so that they could resume their “Mediscare” political attack ads against Republicans.

The latest payroll tax proposal only re-emphasizes one key difference between the parties: Democrats itching for a massive tax increase are unwilling to raise Medicare premiums on millionaires and billionaires to help improve Medicare’s solvency – because they would rather gain politically than fix the problem.

Democrats ALREADY Raised Taxes — To Pay for MORE SPENDING

During his opening remarks this morning, Leader Reid continued the Democrat theme of haranguing “millionaires and billionaires” and insisting that Republicans must raise taxes – which will harm jobs during a time of continued high unemployment – as part of a “balanced” solution to America’s fiscal crisis.  These comments miss one key fact:  Democrats ALREADY raised taxes – on rich and poor alike – as part of the health care law, and they did so NOT to reduce the deficit, but to pay for more federal spending.

CBO’s long-term budgetary outlook, released last month, quantifies the large effect of Obamacare’s tax increases – effects that will only grow over time.  Table 6-2 notes that the tax increases in Obamacare will increase revenues by 1.2% of GDP between now and 2035.  Based on the size of the economy in 2011 dollars, that amounts to a $180 billion annual tax increase thanks to the law.  In addition, CBO estimates that “Cadillac tax” on high-cost health plans “would increase total revenues by more than 0.7 percent of GDP in 2035 and higher percentages thereafter.”  This year’s report did not make long-range estimates, but in last year’s report CBO projected the “Cadillac tax” alone would raise 3 percent of GDP in 2080.  Because the “Cadillac tax” will continue to grow over time, its impact in 2080 would be about a $450 billion annual tax increase in 2011 dollars – just for one tax increase, for one year.

Meanwhile, multiple Democrats have made comments that additional means-testing of Medicare and other entitlements is a non-starter.  It’s interesting that the same Democrats who want to tax “millionaires and billionaires” say they are “absolutely opposed” to making those same individuals pay more for their taxpayer-funded benefits.

To sum up:  After having raised taxes once to pay for Obamacare’s unsustainable new entitlements, Democrats want to raising taxes on small American job creators AGAIN – in order to ensure that Warren Buffett will continue to receive his Social Security pension and Bill Gates can obtain taxpayer-funded Medicare benefits.  With this tax-and-spend mentality on full display among Democrats, is it any wonder that our nation is facing trillion-dollar deficits – or that businesses are reluctant to hire the new workers that would spark greater economic growth?

Democrats Support Benefits for Billionaires

CongressDaily this afternoon reports on comments by several Democrats regarding possible means-testing of Medicare benefits and/or eligibility.  HELP Committee Chairman Harkin said in an interview: “Just as Social Security is not means-tested, neither is Medicare.  We have a program that is means-tested, and it’s called Medicaid.  Medicare should not be means-tested.”  Likewise, Sen. Mikulski said she was “absolutely opposed to means-testing” benefits.  Meanwhile, Finance Committee Chairman Baucus said “we’ve got to have revenue…we need revenue.”

To sum up:  Democrats want to obtain new revenue – largely by raising taxes on small businesses and other American job creators – in order to ensure that Warren Buffett will continue to receive his Social Security pension and Bill Gates can obtain taxpayer-funded Medicare benefits.  It appears rather perplexing that Democrats are willing to raise taxes on “millionaires and billionaires” in order to fund entitlement benefits for those same individuals.  This contradiction is heightened when you consider that means-testing entitlement benefits for wealthy individuals is much less likely to have secondary economic impacts than raising taxes on job creators.

It’s this kind of flawed economic and fiscal logic – raising taxes on job creators in order to fund benefits for billionaires – that explains why Democrats’ trillion-dollar stimulus has failed to deliver the jobs it promised, or why the health care law has failed to deliver the $2,500 per family reduction in premiums candidate Obama promised.

Henry Waxman Defends Benefits for Billionaires

The liberal website Talking Points Memo noted this week that in his speech Monday regarding the debt limit, Speaker Boehner supported the idea of means-testing Medicare for wealthy individuals – questioning whether federal taxpayers should be subsidizing the health care benefits of those like Pete Peterson, the billionaire founder of Blackstone Group and head of a fiscal responsibility foundation.  That prompted this retort from California’s Henry Waxman: “Medicare is a social insurance program where you get back for paying in, whether you are middle class, poor, or rich.  If Mr. Boehner wants to have the wealthy contribute more to deficit reduction, he should look to the tax code.”

To summarize:  Rep. Waxman would have the federal government raise taxes on the wealthy to pay for taxpayer-subsidized benefits (i.e., Medicare and Social Security) for these same individuals.  The difference between the two philosophies is clear:  Withdrawing taxpayer-funded benefits (particularly Medicare benefits, which are non-financial in nature) from wealthy individuals will NOT have an economic impact – but raising taxes on job creators WILL.  If Democrats are interested in “soaking the rich” at a time of high unemployment, why are Democrats focused on the side of the equation that will harm jobs – rather than questioning why Warren Buffett and Pete Peterson need taxpayer-financed benefits in the first place?

Adding to this absurdity is that the federal government is already forcing individuals to purchase government-run health care, by prohibiting them from opting out of Medicare.  So at a time of trillion-dollar deficits, federal taxpayer dollars are being used to defend in court a policy that FORCES individuals like Warren Buffett to purchase government-run health care (and, at least in some cases, give up their private coverage in the process).

Thankfully at least Democrats who have expressed some support for placing income-related tests on taxpayer funded benefits.  But if Democrats seek credibility on entitlement and deficit reform, they might want to arrive at a better reason to raise taxes on job creators than to finance Warren Buffett’s health care or Bill Gates’ pension.