Content Tagged: medicare

Medical Costs + Cosmetic Procedures

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March 2016

I found an interesting post from the American Enterprise Institute about the cost of cosmetic (optional) procedures, and what we can learn from this in terms of overall medical costs.

The last few months, we’ve been working hard on this side of UFR to update the information and data you find in the curriculum.  One thing that keeps coming up, especially in UFR lessons on medical costs and Medicare, is the extreme rise in average health care costs over the last 50 years.  AEI brings up a really interesting point – what if people had to pay for all  procedures out of pocket?  Would there still be so many procedures being done, and would costs still be rising so much?

They use cosmetic surgery numbers as a “case study” of sorts.  The table at left shows the top 5 most popular surgical cosmetic procedures, and the top 5 most popular non-surgical.  Remember, these are procedures insurance does not cover, so it is all paid out of pocket.  They provide prices in 1998 dollars and 2015 prices, and show the general increase in prices.  However, what must be taken into account is the 45.4% change in inflation over those years – meaning that many of these procedures have actually dropped in real prices.

Compare this to average health care prices, which have continued to rise exponentially over the last twenty years – AEI estimates a 98% increase in general health care costs over this same time period?

What’s the difference?  The article points out the decrease in out of pocket expenses, and the increase in third party payers, among other things.

Check out UFR Lesson 1.2 on Medicare and the National Debt, Lesson 2.2 on Medicare, Governance, and the National Debt, and Lesson 3.2 on The History of Medicare, and ask students to consider the trade-offs made in the last 20 years between out of pocket expenses and general cost of health care.



Federal Budget Crisis Averted – for now

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November 4, 2015

On Monday, President Obama signed the 2015 budget act (HR1314).  This came just in the nick of time to avoid another government shutdown, and puts immediate issues of federal spending to rest until after the 2016 presidential elections.  Tuesday, November 3, was the deadline for a debt ceiling change.

The budget provides federal revenue of a little over $3 trillion, which is still over $400 billion short to balance the budget.  The largest expenditures are Medicare and Medicaid (about $1 trillion), Social Security (just under $1 trillion), defense (1/2 trillion dollars), federal pensions, and net interest on the federal debt. The two largest expenditures (Medicare/Medicaid and Social Security) will continue to rise with our aging population and increasing health care costs.

US Deficit 1901 to 2020

Forbes has an interesting article about the history of the federal budget, pointing out that overspending did not really start happening on a non-wartime basis until the 1970s.  The chart shows federal budget deficits or surpluses from 1901 through 2020 (projected after 2016).

Understanding Fiscal Responsibility focuses on exactly these issues.  Use Lesson 1.1 to have students look at “what costs and trade-offs are we willing to accept to ensure the benefits of income security to Social Security recipients?”.  Lesson 1.2 looks at Medicare and the National Debt, while Lesson 1.3 has students analyze the defense budget.  Passing a new federal budget is kind of like the jackpot of teaching UFR!



Reforming Social Security – the Graham way

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May 5, 2015

South Carolina Representative Lindsey Graham has not yet announced his intended run for president in 2016, but he has outlined Social Security reform which will ask everyone to “give up a little bit to make sure the system doesn’t fail.”  In general, Republicans oppose anything that would cause taxes to rise, and Democrats oppose anything that would cause benefits to fall.  This has created a DC stalemate for years.

Borrowing heavily from the Simpson-Bowles commission (2010), provisions would include having wealthier Social Security recipients pay more, raising the benefits age for both Medicare and Social Security, raise the amount withheld from workers’ paychecks for Social Security, and elimination of certain personal and corporate tax breaks.

UFR Lesson 2.1 outlines the essential dilemma of Social Security:  What responsibility does the federal government have to ensure the elderly a secure and stable standard of living? Begin with the lessons for the unit, and bring Graham’s suggestions to students.  What is the feasibility of the proposal?  Would Congress vote for it?  Would the President?  What evidence do they have to support their opinion?


Chairman Paul Ryan and the Federal Budget Process

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April 8, 2014

House Budget Committee Chair Paul Ryan released his proposal for the 2015 federal budget on April 1.  The budget would cut $5 trillion out of the budget over the next 10 years, balancing it by 2024.  However, his suggested route to balancing the budget would severely offset the Affordable Care Act of 2010.  It would also increase defense spending and cut domestic programs dramatically.

What does all of this mean?  There are multiple ways that this could be incorporated into the UFR curriculum.  The biggest link is to Lesson 1.5 on Balancing the Budget, but it could also be tied to others:  Lesson 1.1 is about Social Security and the National Debt, while Lesson 1.2 is about Medicare and the National Debt (as Ryan’s budget shows significant cuts in Social Security and Medicare).

The Congressional Budget Office (CBO) has also released their analysis of Ryan’s budget.  Their major point is that for Ryan’s budget to work, there would be significant changes in current law, especially regarding the Affordable Care Act.

More information is bound to be forthcoming in the next few weeks!



President Obama’s 2013 Budget Proposal

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February 13, 2012

President Obama sent his budget proposal for 2013 to Congress today. According to Chris Moody’s Yahoo News article, in the outlined plan, Obama expresses the need to raise tax rates on the wealthy, increase funds for job training and infrastructure, and cut unnecessary spending on government programs. If approved, the federal deficit could decrease by $4 trillion over the next ten years, yet leave the federal government with a $901 billion shortfall at the conclusion of 2013.

The passing of the Budget Control Act last August, which eliminated discretionary spending by $900 billion over the next ten years, caused President Obama and the White House to make cuts to programs like Medicare and Medicaid. Moody states that the plan reduces the amount of funding for the aforementioned programs by $360 billion. Republicans have expressed their disapproval of the proposed budget because they believe it does not do enough to lower the federal deficit and does not justify the need to raise taxes. The Republicans, according to Moody, “also knocked Obama for submitting a budget that does not cut the federal deficit in half by the end of the president’s first term, a promise Obama made in February 2009.”

Republican presidential candidates Mitt Romney and Ron Paul both criticized Obama’s proposal. From the article:

“The President has failed to offer a single serious idea to save Social Security and is the only president in modern history to cut Medicare benefits for seniors,” Romney said in a statement in which his campaign also referred to the budget as “an insult to the American taxpayer.”


“I believe we can save Social Security and Medicare with a few commonsense reforms, and,” Romney added, “unlike President Obama — I’m not afraid to put them on the table.”

“When President Obama talks about spending ‘cuts’ it’s always some plan that will supposedly unfold over a decade and that the next president or Congress can change at whim,” Paul’s campaign said in a statement on its website. “In other words, cuts never happen. But budget deficits, as evidenced above, happen every year. And they will continue to happen every year. President Paul would offer $1 trillion cuts in the first year.”


Teachers could use this article as a class warm-up or “Do Now” to talk about the federal budget. Teachers could then use the provided link to read President Obama’s remarks on the budget and how he presented them to the American public. The White House blog has the digital edition of the budget at the bottom of the webpage (257 pg. document). Students could evaluate some of President Obama’s proposals and address these questions: What might be some issues of debate between Republicans and Democrats? What proposals will need modification for support from both sides? How does the proposal further address the federal deficit? How might the budget influence domestic policies like Social Security, Medicare, and national security? Upon discussing these questions, students should have a stronger understanding of how the federal budget impacts the federal deficit and the types of discussions that occur between the two major political parties involving the appropriation of governmental funding and taxation.


Social Programs and the National Debt

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December 17, 2010

In a recent article in the New York Times, Matt Bai writes that it will be quite some time until we can accurately judge the success or failure of President Obama’s health care legislation.  Comparing the bill to Social Security in the 1930s and Medicare in the 1960s, Bai believes that the “health care law is likely to become a campaign issue for the rest of Mr. Obama’s presidency, and probably beyond.”  Such legislation, Bai notes, does not immediately transform the political landscape, but gradually becomes “so absorbed into the culture that it can no longer be readily removed.”  From the article:

The pattern here is perhaps best illustrated by Social Security. Franklin D. Roosevelt signed the program into law in 1935, but it didn’t begin to pay out benefits until 1941. It was attacked both by conservatives, who tried repeatedly to repeal it, and by some on the far left, who thought the program insufficiently generous, and its survival remained in doubt for more than a decade.

Bai points out that there are “essential lessons that both parties can draw from the history of Social Security and other expansive programs”.  The same holds true for students studying the federal budget deficit and national debt.  The Understanding Fiscal Responsibility project has written several lessons designed to help students draw parallels between these programs and examine their effects on the federal budget and the national debt.

One such lesson, “Mandatory Programs and the National Debt“, asks if programs like Medicare, Medicaid, and Social Security should be modified to address the national debt.  Another lesson, “Medicare and LBJ’s ‘Great Society’“, asks students how Medicare became part of President Lyndon Johnson’s ‘Great Society’ initiative and why it was so controversial in 1965.  Yet another lesson, “Demographic Shifts, Social Security, and the Federal Budget“, explores whether or not the federal budget can survive the “graying” of America.

Through these lessons, teachers can help students understand the ways in which large-scale government programs like Medicare, Medicaid, Social Security, and the new health care legislation affect the federal budget.  By exploring similar historical issues, students will be better prepared to participate in the national discussion about the deficit and national debt.


Taxes, Spending and Debt: Has the Bill Arrived?

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Taxes, Spending and Debt is a resource prepared by Public Agenda to help citizens better understand the current challenges of U.S. fiscal policies. Three fiscal choices with detailed analysis are presented in this resource:

Choice 1: “Balance the budget as quickly as possible and make sure it’s balanced from here on out, including raising taxes to cover what we spend.”

Choice 2: “Immediately focus on Social Security and Medicare, including raising taxes and fees to recipients and trimming benefits for recipients down the road.”

Choice 3: “Keep taxes as low as possible, but reduce the size of government by making major cuts in popular areas such as defense, health care, education and higher education. “