Hillary Clinton

The Fatal Flaw in Hillary Clinton's Medicare Plan

Who will pay for it?

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Hillary Clinton
Credit: mdfriendofhillary / photo on flickr

Decades ago, the wealthy owner of the Washington Redskins lamented the free-spending ways of his head coach, George Allen: "I gave George an unlimited budget, and he exceeded it." Other owners knew there were ways to beat Allen, but outspending him was not one of them. 

Hillary Clinton ought to keep that in mind in her race against Bernie Sanders, who formulates budgets as though he were running the world's biggest counterfeiting operation. You can't match him when it comes to burning through cash, and it's dangerous to try. 

That's one puzzle with Clinton's proposal to let people of "a certain age"—say, "55 or 50 and up"—buy Medicare coverage instead of private insurance. This idea is not likely to win over anyone leaning toward Sanders, because he will always offer more. 

His "Medicare for all" blueprint is extravagantly generous: It would cover everyone, not just those close to the current retirement age, and it would provide far more than what Medicare now offers. 

You can do that when you assume that torrents of money will fall out of the sky to cover the expense. The bipartisan Committee for a Responsible Budget says that even with the gigantic tax increases Sanders would impose, his health care scheme would add at least $2.6 trillion to the federal debt over a decade. In a less rosy scenario, it could pile on $13.7 trillion—roughly as much as the entire current publicly held federal debt. 

Clinton has been a relative model of budgetary sobriety. Oh, she doesn't mind spending: Her proposals would add an estimated $1.75 trillion in federal outlays by 2026. But she also intends to finance almost all of that sum with higher taxes and various savings measures. 

The CRFB estimates her net addition to the debt would be just $200 billion over 10 years. Donald Trump, by the way, makes Sanders look like a penny-pincher: He would add between $10.7 trillion and $15.4 trillion. 

Clintons' Medicare buy-in, the details of which have not been released (or possibly even figured out), may or may not follow her comparatively disciplined fiscal approach. There are two basic paths she could take. 

The first is to charge these new enrollees the full cost of insuring them. In 2008, the Congressional Budget Office estimated that putting 62-to-64-year-olds on Medicare would add costs of about $7,600 per enrollee. Today, that would undoubtedly be larger. 

The problem with option No. 1 is that it wouldn't be terribly enticing to the voters whose favor she seeks. Thanks to Obamacare, which Clinton has so often extolled, they can already get private insurance, with federal subsidies to help many of them pay the premiums. 

Her proposal implies that Obamacare is not the glittering success she claims. "Aren't the exchanges supposed to offer 'affordable' coverage to these same people?" asks economist Joseph Antos of the conservative American Enterprise Institute. "What is the problem being addressed here?" 

Charging full fare would make the Medicare buy-in a good deal only to those afflicted by more than the usual quota of ailments—because their health care expenses will usually exceed the standard premium. In that case, Medicare would lose money on them, and the taxpaying public would bear the burden. 
That could be what Clinton has in mind—which brings us to option No. 2. As Sanders has demonstrated, it's easy to attract voters if you promise them lots of new benefits that will be paid for by someone else. 

George W. Bush also chose this route when he pushed through a program to cover prescription drugs for Medicare patients. The premiums they have to pay cover just 15 percent of the cost. 

Come to think of it, Medicare itself rests on the same gimmick. The CRFB says the average male earner turning 65 today has paid in $70,000 in taxes for the program and will get $195,000 in benefits. For the average woman, the payback is even bigger—$227,000. That's one reason the Medicare trust fund is on track to run out of money by 2030. 

This approach also happens to be the natural tendency of politicians. As president, Clinton would find it far easier to win public support and congressional cooperation if she doesn't insist on making the program fiscally self-sufficient. 

If we know anything about American voters, it's that no matter how much they want something from Washington, they strongly prefer not to pay for it. Clinton probably won't ask them to. 

© Copyright 2016 by Creators Syndicate Inc. 

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  1. “What Hillary Clinton’s Health Care Plan Is Lacking”

    Reality? Coherence? Hitler?

    1. Other people’s money?

      1. Children’s teeth?

  2. “I think of a man, then I take away reason and accountability”

  3. Hillary Clinton ought to keep that in mind in her race against Bernie Sanders, who formulates budgets as though he were running the world’s biggest counterfeiting operation. You can’t match him when it comes to burning through cash, and it’s dangerous to try.

    Sanders’ key to success is having never held appreciable power over anything he could bankrupt.

    1. So you’re saying he fits the mold of previous presidents to a tee?

    2. Unlike his wife, who bankrupted a college…

  4. Somewhat OT: Health care is one of the crown jewels of socialism. Everyone with a functioning brain knows that. CW: Some of the comments include either weapons-grade derp or masterful trolling.

    1. How long after Venezuela’s collapse will it take before leftist dipshits start using it as an example of a libertarian paradise?

      1. Probably not very long. The really smart people have already opined that South Sudan is a libertarian paradise and have even used oppression by the army as evidence.

        Oh, yeah, and my comment, which included what I thought was some obvious trolling, made it to “Readers’ Picks.”

    2. “This is the end game for inequality when the elites steal from the country and don’t invest or pay their fair share of taxes.

      This is our future under a republican agenda.

      Another “readers’ pick”. It’s like they get so close and then just veer off into crazy-land.

    3. Absolutely, see Canada.

  5. Clinton has been a relative model of budgetary sobriety.

    Well, to be fair, she has to set aside quite a bit for hush payments.

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  7. You can do that when you assume that torrents of money will fall out of the sky to cover the expense.

    I was under the impression that this was how the economy worked. Or at least that the rich could pay for it all.

    1. If that’s how the economy works, why do these money storms never happen over *my* house?

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  9. That’s one puzzle with Clinton’s proposal to let people of “a certain age”?say, “55 or 50 and up”?buy Medicare coverage instead of private insurance.

    One thing to look forward to should Hillary win: telling younguns with Hillary 2016 bumperstickers “thanks for paying for my med insurance, suckers”.

  10. There is no fucking way those numbers for Sanders and Clinton are correct.

  11. The fatal flaw with the plan is medicare itself. And chapman demonstrates his ignorance once again. The medicare trust fund is only for hospitalizations. The program has had to dip into the general fund from day one to cover expenses.

  12. RE: The Fatal Flaw in Hillary Clinton’s Medicare Plan
    Who will pay for it?

    1. We all know who is going to pay for Heil Hitlery’s medicare plan.

    2. Medicare is one of the programs that is bankrupting Amerika.

    3. Both parties are find with bankrupting our country. Then they can enact “emergency plans” to further enslave us all, like taking our bank accounts, more surveilliance (sp) of the citizenry, more incarceration for “crimes against the State,” etc.

    4. How’s that for some cheery thoughts?

  13. The fatal flaw in Hillary’s campaign is that she has the unenviable task of being Hillary Clinton.

    1. Which she has been running away from as fast as she can. Unfortunately for her, that voice and that face follow her.

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  15. Who? Private enterprise, because that’s where looter governments go to grab money?

  16. With medicare and the supplemental policy plus drugs, I pay $10k per year for 2. Medicare is nice and cost about 1300 per year for 1. But without the supplemental it isn’t the answer. And as the govt cuts reimbursements, they will do it more to save money if medicare is expanded. Clinton and the Dems never worry about who pays.

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  18. One reason our health care costs so much is that effectively from A to Z it is a government enforced monopoly that is extremely profitable for the health care providers, the hospitals, the drug companies, the insurance companies. To all of them they have the “best deal” available anywhere on Earth. Freedom from “competition” (which is an aspect of a free market), a legal government enforced monopoly over access to medical drugs. (FDR’s administration passed the laws that gave doctors a legal monopoly over medical drugs). Prior to this people could purchase non-narcotic medical drugs from their local drugstore. The druggist would also advise them if asked. Most people do not understand that with our prescription laws the doctor is the one who decides for you what medicines you will be allowed to have. Often his or her priorities will not be the same as yours, but under the law you have no choice.This may be one of the reasons why we have so many malpractice suits. That and the number of lawyers available. The medical profession however doesn’t understand this. That treating people like rightless serfs is not a winning policy.

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  25. How will Hillary pay for her plan?

    A. A tax on Internet spam
    B. Chapman can kick in the rest

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