Saturday, November 28, 2009

The Young and the Productive

David Brooks’ article is very helpful in seeing what is at stake in the current healthcare debate. Obamacare promises to reconcile two apparent opposites:

1) Cover 31 million Americans who are currently uninsured.
2) Bend the cost curve

Now these two claims are incompatible since it should increase costs to cover people who were previously not covered. Brooks explains how these incompatible claims will be made compatible:

1) Cut Medicare payments
2) Raise taxes in the future (the present Congress requests future Congresses to do this.)

Lets look at the first one. Who will decide what Medicare payments are cut and what criterion will they use? A technocrat, a government bureaucrat with scientific expertise, will do so on the basis of “productivity.” In other words, the person’s medical costs will be covered if he is deemed productive member of society. This tips the scales in favor of the young and industrious in society.

This doesn’t mean the young have it made because there is still number two: Raise taxes in the future. Remember, taxes will be raised later, not now. It will be the young and productive who get stuck with the bill.


  1. I won't try to change your mind here, but I do want to offer three technical corrections in the interest of fair debate.

    First, 'bending the curve' doesn't refer to decreasing the total cost of healthcare in America, it refers to decreasing the marginal cost of healthcare. That is, the program might be more expensive, but it would be less expensive per person.

    Second, it is not true that taxes will have to be raised in the future. The current bills raise them immediately. They do so in different ways: the House by imposing a tax on the top 5% of income earners, the Senate by imposing some taxes on certain insurance policies and medical services that they hope will bend the curve. But both bills are already covered. The CBO scoring of the Senate bill can be seen here (page 2, first subheading is the important bit):

    Third, the provisions of the Senate bill that affect medicare payments are again intended to bend the curve, not cover the cost of the bill, which is taken care of elsewhere. I don't know the exact provision Brooks is thinking of here so I will admit to some confusion myself.

  2. And as one final note, Flier's claim that no economist believes that the bill will bend the curve is not accurate. There are many who do, a few of who are quoted here:

    There are at least some economists who believe it will, and likely more.