Cut Medicare? Cut Medicaid? Why?

kbmgmedicareterms.jpgIn the 1980s, I worked for a health economist named Carl Schramm. His mantra was that the real problem was health care costs, not the cost of insurance. This message landed him a great job with the health insurance industry and he played it forward while leading its lobbying group in the prelude to the Clinton’s health reform efforts.

While I get that health insurers would rather blame providers (hospitals and doctors at that time more than pharmaceutical companies) rather than shoulder the blame for ever-increasing costs, policymakers might want to think about what Schramm was trying to get across nearly 25 years ago.

Here’s my favorite example. In 2006, a Republican-led effort added a prescription drug benefit to  Medicare. The law specifically states that Medicare could not negotiate prices (it was reasoned the market will do that and how is that working exactly?).

Before tearing up the social contract with older Americans and throwing in the towel, let’s empower Medicare and Medicaid to negotiate health care costs across the board. Giving them more control over costs might, just might save these crucial programs for future generations.

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