Former Budget Director Peter Orszag Explains the Coming Tragedy in Medicaid Health Care for the Poor and Disabled

But Omits a Second Problem – Everyone’s Health Care Costs Will Rise

In its ongoing failing attempt to present a balanced editorial section the Washington Post has allowed former Obama Budget Director Peter Orszag space to write about the problems (misconceptions, lies, deceit, pick your term) in the Paul Ryan fiscal proposals.  Now Mr. Orszag is a partisan, so we don’t want to give his analysis more credence than other partisan analysis is given.  But there is one non-partisan conclusion that Mr. Orszag makes that is very important.

More fundamentally, if the Romney-Ryan ticket wins, their administration would probably have to choose one or two of the big three items: tax reform, Medicare changes or block-granting Medicaid.

Among the three, I’d bet on Medicaid, given how difficult the other two goals are. The fact that the harm from block-granting would be concentrated on the poor, and that Congress would get to leave it to governors to impose the pain, sadly makes that change more politically viable than the others.

There is almost nothing more certain then if the Romney-Ryan ticket prevails that Medicaid will be turned into a bock grant program to the states.  And it is absolutely certain that the states, not having the financial resources of the federal government, will gut these programs and that health care for the most vulnerable of citizens will be drastically reduced.  They may be kept alive, but just barely.

But what Mr. Orszag and others who support this change do not say is how this will impact the cost and availability of health care for the rest of us.  See the benefits of Medicaid flow to the very poor and the very old and the very disabled, but the money flows to the health care system.  With the absence of this money, and the health care system retaining much of the costs of treating Medicaid patients (they aren’t going to let them die) the additional funding needed will be made up by higher charges for non Medicaid patients. 

This means higher insurance premiums, higher out of pocket costs and less access to medical care for everyone.  The only beneficiary in all of this is high income taxpayers, as the savings to government, which should be passed on to the population as a whole, are used to fund tax cuts for high income individuals.  But this is part of the same policy of shifting the costs of Medicare onto the general population.  The theme is basic and simple, lower government spending on health care, higher costs for individuals to replace government spending and lower taxes on the very wealthy.

Does anyone think this is not deliberate?  Really, anyone?