The three headed monster facing the country is Medicare, Medicaid and Social Security. The costs of these programs are driving the country's federal and state budgets to financial paralysis if something isn't done. What is the plan from the Democrats to manage this looming crisis? The Republican plan for Social Security is no panacea, but something must be done by statesmen, not politicians, to constrain the governmental costs of these programs.
The good news is the debate is loudening. The bad news is that most of it is political rhetoric from ideologues.
"While private funding covered some 75 percent of health costs in 1965, public funding is expected to count for half of national health spending by 2014, according to the Centers for Medicaid and Medicare Services. Some experts say that threshold has already been reached.
In addition to its own spending, government also pays the nation's health bill by the subsidies it offers for health-related expenses in the tax code, now approaching $200 billion. When you add in the subsidies, "you're way in excess of the government controlling more than one half of the market," said Eugene Steuerle, co-director of the Urban-Brookings Tax Policy Center at a recent briefing.
Medicaid enrollment has jumped 40 percent in the last five years, at a time when state revenues were dropping. For the first time, Medicaid now tops education as the leading draw on state budgets.
The governors say there are three forces driving the surge in health costs in state budgets: federal budget cuts, a sharp increase in the number of US businesses that are dropping health coverage for employees, and the trend of middle-class seniors to draw down or hide their wealth to qualify for long-term care under Medicaid. "Medicaid's spending growth will continue at rates far exceeding state revenue growth," according to a report prepared for the governors by Health Management Associates."
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