Back when Obama passed Obummercare as many call it, or the "PPACA" formally, I warned that this was nothing more than a bailout of an about-to-collapse medical monopoly system, and that the impact of this on a forward basis was to simply kick a can that was increasingly being filled with cement and eventually someone would stuff some nitroglycerine in there.
The other funny thing about Obummercare was the repeated claims that it worked. Well, define "worked" please. The simplest objective evidence of "worked" would be that the death rate per 100,000 people went down. Did it?
Why no, it did not.
In fact the crude death rate per 100,000, according to the CDC, was declining from 1999 to 2009; it fell from 857.0 to 794.5. In other words objectively measured Americans were doing better in the 10 years before Obama passed his "big bill."
But from 2010 forward, which, I remind you, was right after Obamacare was passed, it has risen since ever year and now stands as of 2019 at 867.8, or worse than it was in 1999.
So much for Obummercare "helping" people -- provided you define "help" as don't die. I suspect most people would put "don't die" in the very elementary category of "works" in that if you can't accomplish that then you've accomplished nothing at all and the rest of the conversation is a waste of time. Of course if "works" means make people more dependent or feed them more opioids or give 'em diabetes but then fill 'em full of drugs or make some people billions of dollars..... perhaps then it did "work."
I remind you that Trump promised to stop all this bull**** during the 2016 campaign (which I threw shade on and said he'd never do it, and in fact it's why I voted for Cthulhu in 2016) and that he had the power to do it too since he controls the Executive. The Executive enforces laws. There is 100+ old law, specifically, 15 USC Chapter 1, that bears on this and it has twice been litigated to the US Supreme Court and found to apply. Said decisions are, at this point, close to 40 years old and the law in question is not just a civil liability statute -- it carries felony criminal penalties for violations.
Exactly zero prosecutions have come from that long-standing pair of decisions.
Trump did zero to resolve this issue over the last four years.
This last fiscal year (ending September) this is what Medicare and Medicaid spent:
And this is what it took in via taxes:
You can see there's a "small" problem; only about 15% of what is spent is being collected in health-care specific taxes.
Medicaid is a "gimme" program and thus on the Federal Budget (and ability to deficit spend) already. Medicare is not. It is barred by law from spending money it does not have the ability to convert from bonds purchased with previous tax receipts or that which comes in via current tax receipts.
Approximately seven dollars in ten that it spends are not funded with current tax receipts.
When that "held back" conversion capacity is exhausted which will happen in about 2-3 years this means that under current law it would look like Medicare can only pay three dollars of ten currently being spent.
In reality it's not that bad since there are premiums collected that are an offset but it definitely isn't good! There are all manner of confounding factors that nobody can value with complete accuracy, with one of the really big ones being adverse selection due to all the Advantage plans. Specifically, those plans allow you on option to pay one premium and they then "subsume" all of Medicare you would otherwise pay a premium for in part with the rest being paid by your earned credits -- Parts A, B and D. Normally, if you've worked enough "A" is "paid" but "B" and "D" have premiums, and "B" is an 80/20 plan while "D" has deductibles. Advantage plans roll that ball of yarn (which the cat has strewn all over the living room) up into one thing -- that is, one bill -- for you. The problem is that they are wildly subject to adverse selection (in my mother's case, for example Advantage was materially cheaper than paying the "B" and "D" premiums directly, yet had lower out of pocket cost making it appear she got something for nothing) and this means that for many people they are a good deal now but if their prices spike people will abandon them and go back to traditional, which they can do on any annual boundary. In short "Advantage" has been a big stabilizer for Medicare; if it gets hammered by adverse selection then all that boomerangs right back on Treasury.
Now obviously if the program gets fiscally destabilized and cannot pay if you're on Medicare you will get an effective zero and thus if you need it you will die.
This leaves Congress only a few potential choices:
- Ignore it and let it blow up. Rather unlikely, right?
- Break the medical monopolies and drop cost by 80%, making it all work. Good luck with that; Trump did not do it and neither did anyone else despite having 40 years to do so. Biden and Harris will NOT choose that path and neither will Pelo****yousideways, Schuithead or Mc****ell. I've had a very effective plan to do this out on the table for roughly a decade; notice it's gotten zero debate among the "mainstream" media or politicians. Gee, I wonder why when it means the end of financially raping Americans....
- Attempt to increase tax rates enough to cover it. That would be a rough tripling of the Medicare tax immediately and permanently. This would ass-pound the lower and middle class American, as it would roughly double the lower-class American's effective tax rate. I think you can figure out how popular that would be and thus what the odds are of that path.
- Try to force all or effectively all of it onto private payers. This is illegal under present law for Medicare. Medical providers claim that Medicare pays "under cost" but that's a lie; if they really believe it there are formal means to contest it and not only win but get a penalty for CMS doing that. Medicaid does not have that constraint and is part of why we have the monopolist system on the private side with no prosecutions. Congress could remove the Medicare prohibition with a one-sentence bill (or hide that one sentence somewhere else) but doing so could easily collapse private health care entirely.
- Amend the law to allow Medicare to spend "whatever", backed and received or not. This is almost-certainly what they will choose to do since everyone will think it's a "save."
Note that that last choice puts roughly $700 billion or more (perhaps as much as a trillion) a year on the deficit on a permanent basis, escalating at about 10% annually, compounded. Down that road lies massive inflation within a decade, the end of the lower and middle classes in America and both riots and political upheaval, maybe including assassinations or even civil war.
But in the interim I can make a number of predictions for a Biden/Harris administration (and yes, folks, unless something material changes in the next few days, stolen election or not, Biden will be President) that I have a decent degree of confidence in relating to tax and spending policy, all of which I expect can and will be passed. Indeed even if somehow there are a series of injunctions that issue and hard proof of a stolen election emerges, and Trump has a second term, that changes nothing with the above nor the budgetary reality.
All of these items are going to be bad news for many people -- in fact, basically everyone other than the Jeff Beelzebezos' of the world. Remember, the problem here is thou shalt not let the ratings agencies downgrade us, therefore we must convince them we'll get the money somewhere. Let's go through some of the very few that would raise enough to get their attention and perhaps make them back off.
I expect all of this to happen within the next few years.
1. Medicaid. Right now there is a limited "lookback" on Medicaid if you use it and then come into having assets later on. This is going to go to a 100% lookback all the way to birth and it will not be just the Federal Government who demands and gets this, it will also be the states since Medicaid is a program only partially funded by the Feds. In short if you use Medicaid the government will track every dollar spent from the moment you first scream and have a priority lien on anything you acquire as a windfall or when you die. That recovery will be indexed to actual (not CPI) inflation too -- count on it. In short if you are on it and use it forget about leaving anything at all to anyone when you die. Most lower and middle-class people won't need a will anymore because none of your heirs will get anything more valuable than your mutt dog or cat. This change is dirt simple to sell to the "woke" masses since it will impact nobody who is actually poor as they have no assets when they die. But anyone who winds up on Medicaid (e.g. as a young person) and then "makes it" will get it up the ass later on in life.
2. Medicare. "Advantage" premiums are going to skyrocket, rising by 100% or more within the next few years and they will keep going up at 15-20% a year forevermore into the future too. At the same time rationing is coming. If you ate, drank or otherwise destroyed some part of your body through lifestyle choices there will be no soup for you. No more "free" joint replacements for anyone who is overweight or obese, for example. No more heart caths if you have an abnormal A1c and similar. In addition I fully expect the above Medicaid lien structure to be implemented in Medicare as well beyond whatever you personally paid in (with your pay-in not indexed, of course) which is where it will really be able to get something back since most people who are on Medicaid never wind up with much to seize. This is not true for Medicare; all the nice "somewhat well-off" people who retire to Florida's Villages are going to find out that they don't need a will either because everything they have when they die will be immediately seized to cover the stent and two new hips they had installed thinking they had "won." Sorry, once you're dead you can't bitch or vote anyone out of office anymore -- well, unless you live in Michigan. Be aware that there is a limited Medicare benefit for nursing homes; 100 days per benefit period, which includes any time spent in a "regular" hospital. Since the median life expectancy in a nursing home is six months many people wind up with Medicare paying for most or all of it. The adoption of a "lookback" period for Medicare will wildly whack most middle-class people's estate planning to the point of making it entirely unnecessary.
3. If you have a ROTH anything, you're ****ed. I have warned people about this repeatedly since the ROTH first showed up; you are taking on blind faith that Congress will not tax the withdrawals. Oh, I know, you say they "promised." Well, they did and they will have lied. You can count on it. There's not a thing you can do about it either; the Supreme Court has repeatedly ruled that such political promises are unenforceable and not contracts. This is why the traditional IRA and SEP/401k are preferable; you will still get taxed on the withdrawals but you can't get taxed twice because you didn't get taxed on the front end, and on the Roth you did and thus will. Go ahead and try to claim it's unconstitutional; you'll lose as corporate dividends have been taxed twice for generations and this specific sort of issue of political promises on taxation has been litigated before to the USSC. You will lose and Kamala will use your tears for a sexual lubricant while laughing at you for providing them to her.
4. Exactly nothing will be done about the medical monopolists until and unless there are credit downgrades on the US. If that happens we might well see some action in that regard, and it's entirely possible -- but likely not for a few years. The various agencies will do their level best to avoid that, but eventually, if #1 and #2 don't stop the arterial bleeding they will have no choice when we keep putting 20% or more on the national debt every year on a sequential basis. You can make an excuse for it this year due to Covid19 but not on a forward, every year basis. No way, no how.
Note: All this except possibly the downgrades comes out of the next Administration from Biden and Harris. Congratulations folks; you ****ed yourselves and that's just tough ****. Oh by the way if Trump manages to remain in office somehow add riots to all of that; no, he's not going to fix a damn thing either.
He had four years and didn't, why would you believe he will now? Take your "swamp" nonsense and shove it up your ass sideways; as head of the Executive he needed exactly zero cooperation from anyone else to solve this problem. As someone who has run businesses for decades he knows damn well what the problem is as I'm absolutely certain he modeled it exactly as I did back in the 1990s and knew then, as he knows now, there is exactly one way to fix it. He had the power to do so and refused with malice aforethought, so his place in Hell awaits for he's just as responsible for what's coming as Obama, Bush and Clinton, among others.
If you're a younger American and expect something from your dear old parents when they die you better have a nice talk with them and see if they intend to go take a walk in the woods and blow their own brains out when, not if, they start to consume large amounts of medical services. I'm not kidding -- if they don't intend to do that or you don't believe they will do it no matter what they tell you you had better expect to get a big fat goose egg in terms of inheritance unless your parents have tens of millions of dollars or more.
We're talking about the 99.9% of Americans here who typically would get something -- you will get zero when your parents die as the government will attach and seize all of it before their body has reached room temperature.
There are plenty of people -- a VERY material percentage -- who rack up six-figure Medicare and Medicaid spends, and a not-inconsequential percentage who rack up 7-digit and better numbers in the last years of their life. This exceeds the value of nearly all estates so the number of people who actually will get something as the "next generation" as the current one dies off is going to shrink to an effective zero.
Hope you folks all like the ride because this is what you bought the ticket for -- and yeah, the first parts of it are very likely to show up during the next administration, with a possibility you get all of it right in the face.
By the way if you're one of those younger people, say, under 35 or 40? If you think us older folks are going to rise up and go wage war, politically or otherwise, while all you've done and continue to do is burn down the local black-owned bar while screaming "black lives matter" you got another think coming.