United Liberty

Over at the Cato Institute, Michael Tanner explains what is wrong with the deal over ObamaCare in the Senate:

Rather than set-up a completely government-run insurance plan to compete with private insurance, Congress would establish a program similar to the Federal Employees Health Benefit Program (FEHBP), which currently covers government workers, including Members of Congress.  The FEHBP offers a variety of private insurance plans under a program managed by the US Office of Personnel Management (OPM).  Each year OPM uses the Federal procurement process to solicit bids from insurance companies to be one of the plans offered.  Premiums can vary, but participating plans operate under stringent rules.   As a model, the FEHBP is apparently acceptable to moderate Democrats because the insurance plans are private rather than government entities, while liberals like it because it is government regulated and managed.

In addition, the compromise plan would expand Medicare, allowing workers ages 55 to 65 to “buy in” to the program, and may also expand Medicaid.

Tanner lists seven points as to why using FEHBP is a bad idea, the most glaring (at least to me) is #4, which says, “Medicare is currently $50-100 trillion in debt, depending on which accounting measure you use.  Allowing younger workers to join the program is the equivalent of crowding a few more passengers onto the Titanic.”

The federal government itself put the unfunded liabilities of Medicare at $31.8 trillion (p. 16), though that’s likely higher now due to the economic climate, though those estimates are conservative. You simply cannot justify adding to already massive future deficits that are going to require massive tax increases down the road. Unfortunately, just like when Republicans pushed Medicare Part D through in 2003, Democrats aren’t thinking about what this bill will do to the budget and taxes in the future.