For most employer health plans, Part B of Medicare and Medicaid spending open-ended. There is no cap on their rate of growth or a cap on total costs. That’s pretty much true for private health insurance too and look how we scream when premiums are increased.
Employers have been talking about these two words and many have acted on them for years. Republicans in Congress don’t use these words but substitutes like block grants or vouchers.
Those two words are “defined contribution.” No doubt Republicans are going to be battered by Democrats who do not favor such an approach to government spending. The alternative is simple, more and higher spending and more and higher taxes.
There are consequences to the defined contribution approach to be sure. Sooner later more costs are shifted to the beneficiaries under these plans or coverage is limited and/or they become less viable because fees to providers are further reduced.
So as Democrats decry the harshness of the defined contribution approach and Republicans seek to control government spending, there are millions of Americans caught in the middle (not to mention millions of workers facing the same dilemma).
The question for taxpayers is are we willing to spend unlimited funds for every government program? If the answer is yes, are we (everybody) also willing to pay more in taxes? If the answer is no, then what approach do we use to manage our spending?
Keep in mind the US is still spending nearly half a trillion dollars a year more than its revenue while adding to a $19.8 trillion debt
Categories: Observations on life