2012 November 11 Sunday
Obamacare vs Medicaid vs Medicare

The last hurrah: Avik Roy makes a great point: Obama's victory ensures the survival of Obamacare and therefore heightens the conflict between demographic factions over entitlements. America's building fiscal crisis ensures this is the last major entitlement enacted. The battle for funds between the existing major entitlements programs and Obamacare might turn the elderly into losers on entitlements.

But we know something else: that America’s unsustainable fiscal situation means that Obamacare is destined to be the last major entitlement enacted by the United States. Indeed, Obamacare’s victory sets off a stiff competition for taxpayer dollars between Obamacare, Medicaid, and Medicare. It’s a battle that the elderly, in particular, are likely to lose.

Click thru to read Roy's details on the numbers of people and dollars involved in each program. His article on why Obamacare will increase individual health insurance premiums bears reading as well. Practical advice: be prepared to pay cash out-of-pocket in your old age to get advice from the best medical specialists. More doctors will drop Medicare as Medicare payments to doctors go down.

America's list of unsustainable trends is growing. That Obamacare was passed even in the face of existing and projected huge budget deficits is a source of amazement for me. I fear the growing political power of the growing lower classes is going to keep the US on course for financial crisis.

So we've hit the high point in entitlements programs creation. We still haven't hit the high point in entitlements spending. We are probably about two recessions away from that.

Similarly, the last 20 years of US military adventurism after the collapse of the Soviet Union is probably another high point in US intervention abroad. Our worsening demographics as the baby boomers retire, the coming decline in world oil production, rising Asian demand for limited natural resources, and the resulting financial crisis will assure cutbacks at home and abroad.

The ship is dragging an anchor that is growing in size every day. Expect higher taxes, lower benefits, and continued deepening of cleavages between political factions.

Share |      By Randall Parker at 2012 November 11 08:54 PM 

MAO said at November 12, 2012 5:13 AM:

No less than the Congressional Budget Office regularly reports that "Obamacare" will bring about changed procedures that will *reduce* federal spending on medical care. Repeat: Obamacare REDUCES the budget deficit rather than increasing it, according to the statistical/investigating service that Congress relies on.


Therefore Obamacare contributes to SOLVING rather than exacerbating the problem you outline above - as well as providing substantial progress towards ensuring medical care for all human beings within the country, something that rather more advanced nations (Canada, Australia, New Zealand, the EU) have provided for many years now.

Black Death said at November 12, 2012 7:13 AM:

@MAO -

Did you read the original CBO report? I did (http://www.cbo.gov/publication/43471). Yes, it is true, according to the CBO's (admittedly shaky) projections, Obamacare will reduce the deficit by about $109 billion. How is this miracle achieved? By a $1 trillion increase in taxes! Wow! What a deal! Increase taxes by $1 trillion, and we knock $100 billion off the deficit. By the way, the current projected federal deficit is about $901 billion. Of course, the CBO doesn't deal with the effects of this massive tax increase on the economy (hint: think of a flushing toilet). According to the CBO, what else does Obamacare do?

The ACA also includes a number of other provisions related to health care that are estimated to reduce net federal outlays (primarily for Medicare). By repealing those provisions, H.R. 6079 would increase other direct spending in the next decade by an estimated $711 billion.


Yep, that's $711 billion out of Medicare (at a time when the number of Medicare beneficiaries is increasing greatly, due to the aging of the Baby Boomers). Too bad, seniors.

Randall Parker said at November 12, 2012 8:02 PM:

Black Death,

My guess is some of the Medicare cuts in Obamacare will be reversed as old people complain to their Congresscritters about how hard it is to see a doctor. It has happened in the past. It'll probably happen again. Still, I expect medical care for seniors to get squeezed.

Our debts and promised entitlements can't be paid for with slow economic growth. Yet slow economic growth is the best we are going to get. Sustained economic contraction once oil production starts falling seems like a matter of when, not if.


Don't buy into a partisan narrative from a very heavily partisan web site. The truth is almost always ugly. If someone quotes you a pretty story about something either of the political parties did the chances are they are lying.

Black Death said at November 13, 2012 6:26 AM:

RP -

Yeah, I think you're right. The seniors will squeal about the Medicare cuts, and some of them will be rolled back. But that likely scenario doesn't change what's in the Obamacare legislation.

When I read the HuffPo story, I knew it was pure BS, and, sure enough, checking with the original source (the CBO report) proved it so.

sestamibi said at November 13, 2012 9:49 PM:

The military adventurism will taper off as the armed forces discover that ever-larger shares of potential cannon fodder (young men 18-24 years old) consist of those not only unwilling to fight others who look like them, but will be fighting for the same cause . . . on our shores.

It will be interesting to see if there's a draft in our future. Right now the military establishment seems opposed, since they correctly hold that soldiering takes a lot more brain power than it did in the 60s, and a draft would not supply that kind of brain power while a selective volunteer army would.

On the other hand, the pressure from the likes of Charlie Rangel (while he's still alive) may be too much for them.

Check it Out said at November 20, 2012 4:46 PM:

I think MAO's got a point there.

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