Skip to main content

Entitlement Reform Could Lead to Mental Health and Health Care Armageddon

It was hard to witness the embarrassing spectacle of politicians responding to the credit downgrade by circling their firing squad yet again.

I’d like to see some grown-ups emerge from the mess.  But I’m not holding my breath.

Sources: CBO, GIH, KFF, CDC, NAPH

Despite this, politicians are pushing entitlement myths and reforms.  But in the unsteady hands of this unstable Congress, entitlement reform could result in a health and mental health care Armageddon that could blow us all back into the 19th century – the stone age of modern medicine.

The Social Security and Medicare Trust Funds still have surpluses.  They aren’t responsible for the debt.  In fact, Social Security Trust Funds hold U.S. debt, just like China.

We can do two things about future Social Security and Medicare costs.  We can cut benefits, which our citizens don’t want, or raise Social Security and Medicare taxes to pay for the benefits people do want.  It would take a 1%-2% Medicare tax increase to preserve Medicare as it is today for the next three generations.

Medicaid is a different story.  Medicaid doesn’t have a trust fund.  It contributes to the federal deficit and debt, and we need to lower its cost. 

However, the federal deficit this year will be at least $1.3 trillion.  The entire federal share of the Medicaid program is approximately $300 billion. 

Suppose Congress passed the most radical entitlement reform possible – eliminating the entire Medicaid program – as Texas Governor Rick Perry once proposed.  The federal deficit would still be over $1 trillion.

The debt wouldn’t go down much, either.  Our national debt is over $14 trillion today.  Before the passage of the recent deficit reduction act, the CBO projected that the debt would grow to $23 trillion by 2020.  The Act reduced this by almost $1 trillion in Round 1, with at least another trillion to come in Round 2. 

If Medicaid’s $300 billion per year, plus inflation, were made part of Round 2 cuts by the “SuperCongressional Committee,” the U.S. debt would still be almost $20 trillion in 2020.

This assumes that there would be no bad outcomes from such a radical action.  However, eliminating Medicaid would kill health and mental health care in America. 

If Medicaid were eliminated, then the number of uninsured people would mushroom to one-third of our population.  Many would have chronic diseases.

We would witness the first major fallout within a few weeks.  Sixty percent of nursing home beds are funded by Medicaid.  So nearly every nursing home in America would collapse, unable to finance their operations.  Frail elders and people with chronic conditions would be released.  Social services providers would be overwhelmed.

Within a few months, the fallout would spread to every community health center in America.  Without Medicaid, which accounts for 37% of CHC revenue, they, too, would crumble.  Millions of their patients would flood into hospitals for care. 

Most hospitals could probably survive this onslaught for a year or two, but the pressure on them would be terminal.  Public hospitals, which get 35% of their revenue from Medicaid, would fail first. Then private hospitals, which get 17% or more of their revenue from Medicaid, would fail, leaving vast areas of our national landscape without emergency, trauma, or surgical care. 

Behavioral health services, which get 26% of their revenue from Medicaid, would implode next.  People with mental illness would be out on the streets or hidden away without services.

Private physicians could hold out a little longer.  But within a few years, patient-hoarding would be their only survival strategy, and most of their practices would die.  A few urgent care centers, surgical centers, and concierge practices would remain, but their prices would skyrocket.  Few could afford them.

By 2020, without Medicaid pretty much all that would be left of our health system would be our public health services and our $20 trillion debt.  A significant percentage of 14 million healthcare jobs would be lost.  Life expectancy would plummet to pre-1900 levels, and most diseases would be death sentences again.

“Entitlement reform” is a new catch phrase for politicians who do not want to face reality.  To balance our federal budget and pay off our accumulated debt, we will have to raise taxes, pay for the wars we’ve already fought, and create more jobs – including jobs in the public sector, in which one in every six U.S. workers is employed.

The discourse in our Congress must be more grown-up.  We must pay for what we have already consumed and what we want in the future.

But paying bills is a bigger nightmare to some politicians than destroying our health and mental health care systems.  So the demonizing myth of entitlements will continue.
If you have questions about this column or wish to receive an email notifying you when future Our Health Policy Matters columns are published, please contact gionfriddopaul@gmail.com.
Column note:  There are more hyperlinks than usual in today's column, and I want to thank especially the Congressional Budget Office, SAMHSA, the Center for Medicare and Medicaid Services, the Center for Budget and Policy Priorities, Grantmakers in Health, the National Association of Public Hospitals, Gallup, the Federal Bureau of Labor Statistics, the Kaiser Family Foundation, and the Centers for Disease Control and Prevention for the valuable information they make available through their web sites for use by people like me!

Comments

Popular posts from this blog

Veterans and Mental Illness

On a sultry June morning in our national’s capital last Friday, I visited the Vietnam Veterans Memorial .   Scores of people moved silently along the Wall, viewing the names of the men and women who died in that war.   Some stopped and took pictures.   One group of men about my age surrounded one name for a photo.   Two young women posed in front of another, perhaps a grandfather or great uncle they never got to meet. It is always an incredibly moving experience to visit the Wall.   It treats each of the people it memorializes with respect. There is no rank among those honored.   Officer or enlisted, rich or poor, each is given equal space and weight. It is a form of acknowledgement and respect for which many veterans still fight. Brave Vietnam veterans returned from Southeast Asia to educate our nation about the effects of war and violence. I didn’t know anything about Post Traumatic Stress Disorder when I entered the Connecticut Legislature in the late 1970s.   I had only vag

Scapegoats and Concepts of a Plan: How Trump Fails Us

When a politician says he has “concepts of a plan” instead of a plan, there is no plan. And yet, that’s where we are with Donald Trump, nine years after he first launched a political campaign promising to replace Obamacare with something cheaper and better, nearly four years after he had four years to try to do just that. And fail. Doubling down during Tuesday’s debate, he claimed he had “concepts of a plan” to replace Obamacare. Really? He’s got nothing. In fact, he sounds just like Nixon sounded in 1968, when he claimed he had a “secret” plan to get us out of Vietnam. That turned out to be no plan at all (remember “Vietnamization?”) and cost us seven more years there and tens of thousands of lives. The Affordable Care Act, about which I wrote plenty in this blog a decade or more ago, wasn’t perfect. But it was a whole lot better than what we had before it – and anything (save a public option) that has been proposed since. Back then, insurers could deny coverage because of pre-exi

Anxiety and the Presidential Election

Wow. Could the mainstream media do anything more to raise our anxiety levels about the 2024 election? And diminish or negate all the recent accomplishments in our country? Over the past three-and-a-half years, our nation’s economy has been the strongest in the world. Unemployment is at record lows, and the stock market is at record highs. NATO – which last came together to defend the United States in the aftermath of 9/11 – is stronger than ever. Border crossings are down. Massive infrastructure improvements are underway in every state. Prescription drug costs are lower. We finally got out of Afghanistan – evacuating more than 100,000 U.S. citizens and supporters – with just a handful of deaths. Inflation – which rose precipitously in the aftermath of the pandemic – has come back down, and prices in many areas have even begun to decline. And yet, all the media commentators can talk about these days – and they are not “reporters” when they are clearly offering opinions to frame the