Besides being perhaps one of the most intelligent, insightful, and articulate observers and critics of the US health care “system”, Bob Laszewski has an ability to make sense out of what is a complex and occasionally contradictory business.
In his latest observation, Bob notes that what is happening in the US health care system is “different than any other (year) I have watched.” The net – as a nation, a trade union,a government, a business, or a municipality, we can no longer afford making expensive promises re health care and/or pensions.
Bob cites the Pension Benefit Guaranty Corporation’s finding that it now has a deficit of $30 billion and the PBGC’s report that private plans and union plans are underfunded by $650 billion.
That’s bad. Health care is worse.
If Medicare grows by 1% more than the rest of the economy (which would be a lot slower than it has been growing over the past ten years) it will be larger than the entire US budget by 2050.
The first baby boomers are eligible for Medicare in six years. Six years.
GM, Ford, Delphi, big steel and airlines are all cutting health benefits or have already done so. Bob believes other big firms, in better financial shape than these behemoths, will soon follow suit.
State budgets are being hammered by Medicaid expenses, leading to higher copays, changes in benefits, and outright slashing of Medicaid rolls.
His point is that we are now in a phase of “renegotiation”; promises are not going to be kept whether they are promises made by our government or employers. These promises, made in the day of cheap health care, restrictions on wage increases, a booming national economy driven by the world’s dominant manufacturing companies and a much younger population, are no longer affordable.
What does this mean for you?
Significant changes in the health care delivery system are coming. Yes, there are barriers to change in the form of strong lobbying groups. Yes there are powerful politicians. Yes, these are incredibly hard problems. But the tsunami propelled by demographic change and the continued rapid influx of technology will blow these barriers away.
Dec
13
