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Commentary

The Budget Health Shock
Sebastian Mallaby, Washington Post, 1-24-05

A new study has shown that implantable cardioverter-defibrillators can save lives, and the Bush Administration has said that it will implant them in Medicare patients who need them. Cost to taxpayers: $3 billion to $15 billion annually.

Pricey, right? Maybe not. Mallaby cites research from several different sources showing how targeted spending that reduces heart disease turns out to be a real bargain in terms of added health and longevity.

Translation: “spending ever growing billions on health care is likely to be worth it.” The problem Mallaby sees is that we’re not taking in enough taxes to pay for the nation’s expanding medical bills. The villain: the Bush tax cuts.

Not true. Medicare was heading into deeply troubled waters well before the Bush tax cuts took effect because states and the federal government have been spending money on Medicare and Medicaid like it was going out of style.

Currently, Medicare is in the midst of a sea-change in how it pays for care and allocates its dollars by setting better treatment guidelines and only paying for treatments that are cost-effective. More savings can be had by shifting the nation towards consumer-driven health care through Health Savings Accounts, and requiring that every American purchase health insurance. Through these and other market driven policies, we can limit government spending to a true insurance model, i.e. covering costs that individuals can’t.

In other words, taxes won’t solve the Medicare problem – but good policies can.



Project FDA.
  
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