Here’s a quick question that might have an answer you don’t expect. I certainly didn’t.
Which government program(s) will add more to the federal deficit over the next ten years according the the Congressional Budget Office and other independent analysts?
A) Medicare Part D – the prescription drug benefit,
B) the Patient Protection and Affordable Care Act – aka Health Care reform
C) the stimulus package
D) the bank bailouts,
E) the Patient Protection and Affordable Care Act, the stimulus package and the bank bailouts all together?
The correct answer to this question is A. The Medicare Prescription Drug benefit, Part D, is expected to add $1.1 trillion to the federal deficit over the next ten years.* It was passed by the Republican controlled Congress in 2003, but no provision was made to pay for it. People aged 65 and older who do not have prescription benefit coverage that is at least equal to that provided by Medicare Part D must enroll in a Part D plan when they first become eligible to do so. If they do not enroll when first eligible, when the time comes that they do enroll, they will pay an extra penalty fee as part of their premium every month for the rest of the time they have the benefit.
The health care reform program (answer B) is set up in such a way that it has the potential to decrease the federal deficit over the ten year period by decreasing the cost of providing care and increasing the number of persons covered by private health insurers. Insuring more people on the private market will actually lower the cost of care by keeping people from having to use hospital Emergency Departments for non-life threatening conditions. By requiring insurers to cover preventive care and screenings, the severity of illness and rate of late detection of serious conditions will also decrease. It’s a well-recognized principle of public health that prevention is less costly than treatment – the old “an ounce of prevention is worth a pound of cure” principle. Increasingly, health insurance programs already include wellness benefits to help keep their insureds healthy as a means of cutting costs. The reform law encourages this trend.
The stimulus package (answer C) has only just begun to bear fruit. Monies appropriated included tax cuts for most employed Americans and funds for infrastructure projects. They also included funds for development of new technologies to help America be a world leader in sustainable energy and development. Not all of the stimulus money has been spent yet. More money will still be needed to repair and update our infrastructure, but the first projects are underway and people who would otherwise be unemployed are working. Instead of receiving help from the government because they’re unemployed, they’re now contributing to the economy.
The bank bailout (answer D) was actually approved by Congress before President Obama was inaugurated. It was a huge amount of money that was poured into the financial system to prevent the failure of more of the financial industry. Most of that money has now been returned to the Treasury with interest. Banks that have not yet returned the money are seeking ways to do so as quickly as possible. The reforms that were passed this past year are designed to prevent the financial industry from getting into the same kind of trouble again. No guarantees they won’t find other ways to get into trouble, but it won’t be due to making the same mistakes that caused this Great Recession.
One might think that the cost of health care insurance reform, the stimulus and the bailout (answer E) would be greater than the cost of Medicare Part D. However, due to the way these three programs were designed and structured, they will actually either pay for themselves or at the very least reduce the speed at which the deficit is growing.
Not a bad couple of years of work. Seems like we should be saying “Thank you” rather than shouting about what a bad deal we’ve gotten from the people we sent to Washington to work for us.
(*Source: The San Jose Mercury News, Wednesday Oct 20, 2010, p A4)
