CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Tuesday, June 28, 2011
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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11 Comments:
this is a great idea.
not only is it the only plausible way to actually manage the costs in the system, but to the extent that we can move our healthcare system to cash pay (as singapore's is) we will get significantly lower prices for the same procedures and each dollar we spend will buy more.
if you look at cash pay procedures in the US, they actually drop in price every year.this is because the practitioners have to compete on price and patients shop that way.
if you have buffet style insurance, you never even bother to ask what things cost which leads to insane price spirals and a constant annoying battle between insurers and providers.
move the whole system to cash pay. it's the structure of our insurance that is causing the problem.
imagine if foodstamps worked like mediciad. you'd get a card good for an infinite amount of any food at the store. how do you think that might alter the food consumption patterns of those getting assistance?
i'll bet you'd quadruple costs overnight.
keep in mind that MedicAid is voluntary.
Any state that wants to operate it's own system with it's own rules can do so including their own version of block grants.
The states could opt out of it just like they want to opt out of other Fed progams like ObamaCare or high speed rail, etc.
Let's replace medicaid with block grants so we won't have some committee making decisions for us concerning our care.
"keep in mind that MedicAid is voluntary ... Any state that wants to operate it's own system with it's own rules can do so ... The states could opt out of it just like ... ObamaCare ..."
Yeah, they can opt out of receiving Medicaid "matching funds" but they cannot opt out of paying taxes to support the continuation of the program in other states. What's more, states are often required to commit to increased Medicaid spending as a condition of accepting federal funds for other programs - the "stimulus" bill comes to mind. As for operating their own system, if states wish to continue receiving federal "matching funds" (currently about 60% of the costs) they must first apply for a waiver in order to implement changes in the way that Medicaid is delivered. In essence, the federal government takes their money and returns it with conditions attached.
States are not allowed to opt out of "ObamaCare". That is why so many states are currently suing to have the law declared unconstitutional.
One of the problems with MedicAid is that in many states, it's the default option for nursing home care even for middle class people and many states are exceptionally generous in exempting the assets of those who seek nursing home care especially if the beneficiary still has a spouse - the spouse is allowed to keep many of the assets and the State (taxpayers) then pick up the cost of the nursing home.
Many private charities require that if you move into their assisted living facilities that you sign over your house and other assets.
But MedicAid, as administered by the states, (not the Feds) tends to be more generous.
It's basically up to the states how they handle MedicAid elderly care and many are using it as essentially a subsidy to the kids who want to inherit their parents assets.
If MedicAid was truly limited to ONLY the truly destitute - the costs would be lower and it's something the states do have the ability to do to control costs - already - even without converting the system to vouchers.
larry-
i think you are mistaking medicare for medicaid.
seniors get medicare. poor people get medicaid.
" seniors get medicare. poor people get medicaid."
Medicare Part B is a voluntary plan that you have to pay for that does not cover all expenses including all nursing home expenses.
You'll find that MedicAID is heavy into paying for nursing homes.
http://en.wikipedia.org/wiki/Medicaid
" A cottage industry has developed with attorneys providing "Medicaid planning" for those in a nursing home or likely to be admitted. The attorneys develop plans to convert countable assets to exempt assets, thereby making an elder with excess assets eligible. Planning techniques can also prevent the homestead from being lost to a Medicaid lien. Legal asset protection can be done at any point since it is not a transfer without fair market value and is not governed by the five-year look-back period."
the truth is that MedicAid is being abused by those who are trying to keep their assets and shift the costs to taxpayers.
States can stop this if they want to.
" Medicaid payments currently assist nearly 60 percent of all nursing home residents and about 37 percent of all childbirths in the United States. The Federal Government pays on average 57 percent of Medicaid expenses.
Medicaid planners typically advise retirees and other people facing high nursing home costs to adopt strategies that will protect their financial assets in the event of nursing home admission. State Medicaid programs do not consider the value of one's home in calculating eligibility, therefore it is often recommended that retirees pursue home ownership. By adopting the recommended strategies, many seniors hope they will quickly qualify for Medicaid benefits if the need for long-term care arises."
http://en.wikipedia.org/wiki/Medicaid
So.. MedicAid has become a nursing home subsidy to those who want to inherit their parents assets and so the parents and the kids engage in strategies to exempt those assets and let Federal taxpayers pick up the nursing home costs (since the Feds pick up 60% of MedicAid Costs.
This is the same basic problem that Medicare Part B has - which is ALSO funded from taxpayer dollars and also is subsidizing people with substantial financial means who are trying to preserve their personal financial assets by having Medicare cover their health care costs.
Most people pay about $100 a month for Medicare Part B premiums and, on average utilize $400-500 a month in benefits even though they own homes and cars and in many cases multiple homes and multiple cars and have hundred of thousands of dollars in assets including pensions and 401(k)s.
MedicAid and Medicare Part B are the two 600-lb entitlement gorillas in the budget - using about 600-800 billion dollars a year out of the trillion dollars in income tax revenues that are generated to essentially subsidize people who have significant personal assets.
Let me say that again.
We take in about a trillion dollars a year in income taxes.
we PAY about 2/3 of that trillion for Medicare Part B and MedicAid and a substantial portion of it goes to people with significant financial assets.
huh, ok. fair enough.
that was not what i expected.
do you have any sources for that other than wikipedia? wiki can be pretty suspect on politicized issues.
medicare needs to be means tested and have the age of eligibility moved to 75. you'd more than cut it in half right there.
the left refuses to allow this as that would mean admitting it was a social program, not an "entitlement".
http://www.cms.gov/home/medicaid.asp
but much of the Wiki stuff is footnoted to the original material.
MedicAid was originally designed to help the truly indigent but it has been co-opted into a program to help people preserve their financial assets of parents for their children by having taxpayers pick up the nursing home costs.
dirty little secret......and pretty ironic since the MedicAid issue has often been characterized as passing on "crushing" debt and unfunded liabilities to the kids and GrandKids.
So Medicare is being used to preserve mom/dads assets so the kids get them but then everyone has to pay higher income taxes to pay for it and the costs are skyrocketing.
How much of this do the American people REALLY want to know the truth about instead of comforting themselves that it's others who are sucking on the entitlement programs?
'Replace Medicaid with Block Grants'...
A totally stupid idea!!
Just get rid of all the so called, 'entitlements' and socialist 'safety net' programs...
These programs should be a state by state enactment and not a collection of national programs...
What part if any do we need of the Catalog of Federal Domestic Assistance for instance?
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