The Health Insurance Industry: The Greatest Debt Threat

The drumbeat about the long-term debt is continuing. But, we are not having a serious debate about the origins of the debt or its solutions. If you want to address the long-term debt, the only solution is a "Medicare For All" system that kills the private health insurance industry.

The newest alarm is being sounded by "deficit hawks" in the Democratic Party:

With the increased spending and more red ink provoking new Congressional alarm, a group of Democratic deficit hawks was insisting that Congress and the White House agree to new efforts to rein in the deficit or they would block a large increase in the debt limit...

"There are a number of us who feel very strongly that this is the moment we can get some kind of concession," said Senator Claire McCaskill, Democrat of Missouri and one of a group of lawmakers who met in the Capitol over the weekend to plot strategy.

She and others said they wanted a vote on a new proposal to create a bipartisan, independent commission to recommend spending cuts and revenue increases to pare the deficit. Others want an agreement by Congress to follow "pay as you go" rules when considering legislation.

I say this respectfully: the moment the Congress passed a bill that did not take seriously the economic facts--that only a "Medicare For All" option would relieve the economy of crushing health care costs--we were guaranteeing a transfer of health care costs and a huge debt burden...

but...not from the older generation to the younger generation--as the deficit hawks like to contend--but from the younger generation to future generations that come after them.

Here are the facts, thanks to a great study released last week by the Center for Economic and Policy Research:

The main factor is that per person health care costs are projected to far outpace the rate of per capita GDP growth. In other words, the main reason that today's young and those yet to be born are projected to impose a far larger burden on the government than their parents and grandparents is that their health care is projected to be far more costly.


If current projections for private-sector health care cost growth prove accurate, then the burden on the government will be unsustainable. Of course, if private-sector health care costs grow as projected, then the burden of health care costs on the private sector is also likely to prove unbearable. There are likely to be many more companies, such as General Motors and Chrysler, that are bankrupted in large part by health care costs. In short, rather than being a measure of intergenerational equity, or even a measure of government excess, the long-term debt burdens touted in budget debates are simply a measure of the inefficiency of the U.S. health care system.[emphasis added]

CEPR makes a final point, which I think is well-worth branding on the country's collective consciousness:

The debt is not a measure of intergenerational equity and it is extremely misleading to present it as one. The generations that came of age after World War II were handed the largest debt in the country's history (far larger than the debt levels currently projected), yet enjoyed the greatest period of prosperity the country has ever enjoyed. We hand a whole economy and society down to future generations, including a physical and social infrastructure, a level of development of technology, a level of education, and of course the natural environment. These factors will determine their well being, not the government debt.[emphasis]

So, to conclude: our problem today is that we are not having a serious debate about priorities, and the actions we need to take if we had a set of priorities that were in sync with the vision to create a sustainable society.

We certainly can afford to make investments that expand our collective wealth--"wealth" being defined, in my view, a healthy planet--if we were not draining our Treasury for immoral and ill-advised military actions. We could easily fund education if we had a serious debate (which we did not have) about a $650 billion defense budget (which was just approved with almost no debate, in a bi-partisan fashion).

And we would not be talking about our long-term debt if we were on the verge of passing a health care bill that had as its priorities not a windfall for the health insurance industry and the continued rhetoric about the so-called "free market" but making sure everyone had health care and we REDUCED the cost of health care--for future generations.