As the cost of this over-consumption has risen, Congress, under both parties, has enacted Medicare "cost cutting." The first round may have actually encouraged increased efficiencies, but subsequent rounds were actually exercises in cost-shifting. Hospitals lost money on treatment of Medicare patients but paid for the extra capacity to provide those treatments by raising prices to non-government consumers. Eventually insurance companies began to demand the same prices as the government was getting. This concentrated the cost-shift on the only group with power to negotiate prices with health-care providers: the uninsured.
Thus we have reached a point where we have a system where poor, mostly minority, people subsidize older, mostly richer, mostly white, people. This does not seem compatible with the supposed ideology of either party. And yet, since Social Security and Medicare remain the "third rail" of politics, both parties are trying to solve the problem without actually changing anything. Remember, it was the Freeloaders, at the urging of the Liberal from Texas, who just a few years ago added the largest expansion of Medicare since the program was launched.
The bad news is that we are likely to get some sort of health-care reform this year or in two years time. The good news is that it will be a colossal failure and will likely result in real health-care and entitlement reform down the road. If we live that long.
