Fiat Lux

So, for the first time in the Bush administration, there's a bill in play - the "Deficit Reduction Act" - that actually cuts Federal spending. Typically, it does so by screwing the poor. The CBO has weighed in on this bill, currently awating House approval. It's not a pretty picture, according to the NY Times:

The budget office predicted that 13 million low-income people, about a fifth of Medicaid recipients, would face new or higher co-payments for medical services like doctor's visits and hospital care.

It said that by 2010 about 13 million low-income people would have to pay more for prescription drugs, and that this number would rise to 20 million by 2015.

"About one-third of those affected would be children, and almost half would be individuals with income below the poverty level," the report said in addressing co-payments for prescription drugs.

Under the bill, states could end Medicaid coverage for people who failed to pay premiums for 60 days or more. Doctors and hospitals could deny services to Medicaid beneficiaries who did not make the required co-payments.

The budget office said the new co-payments would save money by reducing the use of medical services.

"About 80 percent of the savings from higher cost-sharing would be due to decreased use of services," the report said.

That last line is the money quote. This plan is pathetic.

Let's say a company is losing money. One easy way to get the bottom line under control is to fire a bunch of employees. However, if you don't look at why you're not making enough money and take steps to change that, the layoffs won't really solve anything. You'll just be a smaller money-losing company. The same holds true for Medicaid. If you don't fix the system, then forcing people off the rolls isn't really going to solve anything.

Oh, and no, HSAs are not a good solution.