In a previous blog, I wrote that we need to focus on budget cuts to help balance the budget. This means a reduction in military spending by 30%, and reducing Social Security retirement benefits. The military, Social Security and Medicare/Medicaid make up a little more than 60% of the US federal budget. My concern about reducing Medicare/Medicaid outlays is because of the amount of people unemployed. This translates to loss of medical insurance for several reasons. When this happens, people turn to emergency rooms for either primary medical care, or even housing. This hurts state, city and county budgets, as many hospitals are financed through these governments.
Now of course budget cuts go along with letting the Bush tax cuts expire, and raising the gas tax a dime per gallon. I’m not suggesting this will fix all problems, and I’m open to different ideas (limiting or eliminating the mortgage interest deduction for example), but relying on budget cuts to simply balance the budget will strain state budgets further. We’ve had the Bush tax rates in place for years, along with cuts to interest/dividends tax rates, and we’ve not been able to produce anything near a balanced budget. I’ve heard the argument many times that raising taxes on the upper income brackets will impact the “job creators”. As I drive around Roseville, I notice how the parking lots at Rosedale and Target are packed. My guess is that the parking lots aren’t packed with people making over $500k per year. I think a great question to people opposed to trying to increase government revenue is: What will generate more economic activity, 10 people making $1 million per year, or 200 people making $50k per year? While these two will naturally exist in a free market, I have a hard time believing that the impact of paying an income tax rate of 39% versus 35% on income over ~$380k will destroy job creation. Raising the gas tax will cause incomes across the income spectrum to be involved in helping to balance the budget.
Anyway, states have been forced to cut budgets too, and naturally medical services have been cut to help balance state budgets. One area this impacts is preventive medical services, especially for people who are mentally ill. As I mentioned above, when people lose medical insurance, the emergency room becomes the default insurer. Emergency rooms are costly parts of a hospital, and are more costly than running a clinic. So a result of the slow economy is that there has been an increase in mentally ill patients coming to emergency rooms. The web link below is to a report describing this issue.
http://www.msnbc.msn.com/id/45790987/ns/health-mental_health/#.TvlEMvKx4mE
While this report isn’t scathing, I think it supports the idea that we’re seeing a negative impact of state budget cuts on mentally ill people and local hospitals.
Currently the list of plausible GOP presidential candidates is shrinking, with Ron Paul, Newt Gingrich and Mitt Romney being the top three, based on news reports I’ve seen. Of these three, according to their websites, only one of them mentions how Medicare is currently funded; rather all three address reform. I don’t see how taking the time to reform healthcare policy will help the immediate need for emergency rooms seeing the increase in mentally ill patients. But the bigger issue I see with the promises these three are making is that the immediate priority is repealing the Patient Protect and Affordable Care Act (PPACA), which with the exception of the individual mandate, is a more free-market policy than Medicare, attempts to finance itself, and actually covers people better than the current laws have set up.
So if it bothers you that your current premiums and state or local taxes are increasing, you can expect more of it. If you also oppose PPACA, then I ask you to consider what the alternative is? As states and localities cut budgets, hospitals and clinics will either need to find funding elsewhere, or they will reduce services.
My suggestion is that we write our legislators or support politicians who in the near term will work to keep Medicare and Medicaid from cuts but also support targeted budget cuts I listed above. Would this require us to pay more in taxes? Yes. Will the economy be impacted? I have a hard time believing it. Medicare and Medicaid taxes are monies spent here in the US. Emergency rooms (and homeless shelters) will see some reprieve, or at least hopefully won’t see more increases in demand. It seems to me that preventing ER visits will cost us less in our health insurance premiums and local taxes.
I’m not really surprised by much these days. I think a line from the movie Christmas Vacation sums it up well.
Eddie: You surprised to see us, Clark?
Clark: Oh, Eddie... If I woke up tomorrow with my head sewn to the carpet, I wouldn't be more surprised than I am now.
Do you believe a major hospital would refuse ER services to people? If their budgets become so constrained, I wouldn’t rule it out. Do you want that? Would you be surprised if you heard that on the evening news?
