Monday, February 9, 2015

When Government Pays for End-Life Medicine, Government Makes End-Life Decisions

Paul Mulshine had a pretty good article in the New Jersey Star-Ledger titled My generation is kidding itself about Medicare, which was critical of Medicare. Mulshine cited Ezekiel Emanuel’s recent Atlantic article “Why I Hope to Die at 75.” Emanuel, notes Mulshine, intends “to forego any extraordinary measures that would artificially extend his life. He doesn’t want to become a burden on those younger than him.”

The first question that comes to mind is: Then why doesn’t Emanuel oppose Medicare, which in and of itself is precisely “a burden on those younger than him?”

That aside, Mulshine approvingly makes a crucial point:

As for all of those people who objected to Emanuel’s piece on the grounds that there should be no limits on end-of-life spending under Medicare, I don’t know what you’d call them. They’re certainly not conservatives.

They were all over the internet last week repeating some variant on this mantra: “End-of-life decisions should be between the patient and the doctor.”

But, Mulshine observes: “If the government’s picking up 83 percent of your medical bills, it’s silly to say the government should have no say in what services you receive.”

Exactly. When the government pays, the government can and will set the terms. Mulshine cites a “Dying in America” study, which deals with end-of-life considerations and possible solutions. His implicit point is that, if you want control over your end-of-life healthcare decisions, you must oppose Medicare. Personally, I’d much rather Medicare was never created, which means I would have been in charge of planning for, and paying for, my own old age health expenses—and in turn been in charge of my own end-of-life decisions. Of course, at 65 years, it’s too late for me. There is no insurance alternative to the Medicare monopoly, even if I could afford it. And planning for old age can’t start in old age. It must start in your younger years. So, I’m stuck.

Mulshine also points out that most people currently on Medicare will receive more in benefits than their Medicare payroll taxes will cover.

Here it gets interesting.

Sure, Medicare is in much deeper financial trouble than Social Security. The payroll tax of 2.9% (combined employer/employee share) doesn’t come close to covering Medicare outlays. But, the federal government can “print” money to cover the shortfall. As Mulshine points out, citing an internet comment from another article:

“The best medical care gets better (and more expensive) every year,” the guy wrote. “Ten thousand people a day turn 65. Good thing printing presses and paper are no longer needed to mint money, we would run out of ink.”

What “the guy” is referring to is inflation; the artificial expansion of the money supply to finance government spending. That payroll tax may not cover Medicare, but direct taxes aren’t the only way to fund government spending. The government can simply seize our purchasing power, leaving us with dollars of diminishing value. That’s what inflation is—a tax on purchasing power. You simply can’t “print” goods and services. So current beneficiaries may cash in. But younger people are going to get screwed coming and going. But so will retirees. In fact, inflation ordinarily hits retirees harder because they can’t recoup purchasing power losses through inflationary wage gains. Retirees are generally on a fixed income. So, mathematically, there may well be a large gap between taxes paid in and Medicare dollars cashed out. But the gap will not be as large as it otherwise would be, thanks to inflation.

Nonetheless, as Mulshine eloquently concludes: “The politicians will keep pandering to my generation. As for future generations, they better hope they die before they get old.”

[NOTE] This generated a lot of commentary, much of it hostile and even nasty. I engaged several correspondents’ comments, which I’ll post over the next several days.

Related Reading:

Unlike Ezekiel Emanuel, I Hope Not to Die at 75—Ari Armstrong, The Objective Standard

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