Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

May 14, 2009


WOLF BLITZER, CNN: Will this be a single payer system along the lines of Medicare?

HUMAN SERVICES SECRETARY KATHLEEN SEBELIUS: No. I think that what the president has made it very clear is he wants to actually build on the supporting system. There are about 85 million Americans who have employer-based health coverage and are very satisfied -- a lot of them are very satisfied with the coverage they have. They don't know what's going to happen to the cost...

BLITZER: So you don't want to simply expand Medicare to include everyone?

SEBELIUS: That's correct.

BLITZER: But there are some who would like to do that.

SEBELIUS: There -- there definitely are some single-payer advocates. But that is not the president's proposal, and I think he -- he thinks choice, that Americans should have choice of doctors and providers, have an opportunity to keep that coverage that they have, if they like their coverage.

Robert Reich - Fifteen years ago, when I was a trustee of the Social Security and the Medicare trust funds (which meant, essentially, that I and a few others met periodically with the official actuary of the funds, received his report, asked a few questions, and signed some papers) both funds were supposedly in trouble. But as I learned, the timing and magnitude of the trouble depended a great deal on what assumptions the actuary used in his models. As I recall, he then assumed that the economy would grow by about 2.6 percent a year over the next seventy-five years. But go back into American history all the way to the Civil War -- including the Great Depression and the severe depressions of the late 19th century -- and the economy's average annual growth is closer to 3 percent. Use a 3 percent assumption and Social Security is flush for the next seventy-five years. . .

Even if you assume Social Security is a problem, it's not a big problem. Raise the ceiling slightly on yearly wages subject to Social Security payroll taxes (now a bit over $100,000), and the problem vanishes under harsher assumptions than I'd use about the future. President Obama suggested this in the campaign and stirred up a hornet's nest because this solution apparently dips too deeply into the middle class, which made him backtrack and begin talking about raising additional Social Security payroll taxes on people earning over $250,000. Social Security would also be in safe shape if it were slightly more means tested, or if the retirement age were raised just a bit. The main point is that Social Security is a tiny problem, as these things go. . .

Don't be confused by these alarms from the Social Security and Medicare trustees. Social Security is a tiny problem. Medicare is a terrible one, but the problem is not really Medicare; it's quickly rising health-care costs. Look more closely and the real problem isn't even health-care costs; it's a system that pushes up costs by rewarding inefficiency, causing unbelievable waste, pushing over-medication, providing inadequate prevention, over-using emergency rooms because many uninsured people can't afford regular doctor checkups, and spending billions on advertising and marketing seeking to enroll healthy people and avoid sick ones.


Anonymous Anonymous said...

Since when is 75% of the American public "some single-payer advocates"? Congress is completely ignoring their actual constituents in favor of their campaign donors in the most blatant way yet.

May 15, 2009 10:06 AM  

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