Unpopular decisions aren't necessarily right.

I find it odd that government representatives appear to believe that the mere fact that a decision is unpopular is somehow proof of how right and appropriate it is. A wrong decision can be unpopular just as easily as a right one,. A popular decision is equally likely to be wrong or right. There is no intrinsic link between the two concepts. Either a decision is right or it is wrong. Revelling in the unpopularity as some marker that you're on the right course is all kinds of dense.

And let's face it the recent government decisions on medical cards, on class sizes, on cervical cancer vaccines are just plain wrong. Oddly enough a subsequent decision on the medical cards for the over 70s that the same amount of money would be paid by the state to doctors for treating people over 70s irrespective of their reasons for qualifying for the card is a correct decision. And while it is likely to be unpopular with doctors the government are due some credit for making it. Even if they've been damn slow to get around to it.

What if McCreevy had continued to extend medical card threshold?

I mentioned yesterday that I'd take a look at a counter factual where instead of abolishing income as a factor for the allocation of medical cards to those over 70 that the minister of finance had simply continued to aggressively extend the income threshold.

In 1999 the income thresholds for medical cards even for the over 70s were much lower than they are now. Of course, governments had considerably less revenue in those days before the Celtic Tiger and also had more outgoings in respect of unemployment etc. The thresholds were subsequently increased as per a budgetary commitment by roughly 33% each year until March of 2001. In Budget 2000 McCreevy announced that the next and final step would be to remove the income threshold completely for those over 70. Yet what if he had persisted with his original measure?

Taking the lower of those over 70 figures for 1999 of £133.00 which equates to €168.87 as our base point we see the intended increase of 33% or €55.72 per year in the threshold would have been up to €337.74 in March 2001. Note this is more than the initial revised threshold from last week! And it’s the figure from 7 years ago. So had Charlie McCreevy continued with the same level of increase annually (not % wise but in flat cash terms) the threshold would have been

March 2001 €337.74 (this is double the initial 1999 figure)

March 2002 €393.46

March 2003 €449.18

March 2004 €504.90

March 2005 €560.62

March 2006 €616.34

March 2007 €672.06

March 2008 €727.78

So think about that for a moment, the income threshold would now be higher than that most recent ‘final proposal’ of €700 per week gross to come from the government on Tuesday of this week. Plus, it wouldn’t have involved any re-negotiation with the IMO and consequent explosion in the cuts of the scheme which apparently cost us €254 million last year. Just imagine for a moment what else we could have done with the billion plus Euros over the last 6/7 years? How many more children in lower income families we could have offered medical cards to in that time or funding for nursing home care?

What am I saying sure they didn’t know what to do with the billions for Euros they did have so given them more would have only have lead to throwing good money after bad.

*Figures as from a Cork/Irish Examiner (it's TCM anyway) article in 1999

Medical card means test thresholds:
Up to 66, 66 to 69, 70 to 79*, Over 80*.
Single - living alone: £92.00, £100.00, £133.00, £140.00
Single - living with family: £81.50, £86.50, £115.00, £120.00.
Married couple: £133.00, £149.00, £198.50, £208.50.
Allowance for child under 16: £16.00.
Allowance for other dependants: £17.50.
Allowances for outgoings on house:
Excess over £16.00 a week
Reasonable expenses necessarily incurred in travelling to work
Excess over £14.50 a week
* These are the thresholds likely to apply from March 1, 1999.

There's a hole in the budget, dear Brian. A hole!

So it seems the threshold for the over 70s medical card is to be raised again. And FF (or the cabinet at the very least) must be hoping that this will lower the temperature enough that they can get through the week without more people going overboard.

However, at first reading one has to ask if most of those receiving the benefit of the card will now retain that benefit then the government has close to 100 million of a hole in its budget calculations. To be added on to this is the possible/probably changes in the income levy, we're told that about 800,000 people who work don't pay income tax, but they would be paying the levy as it is on all income. So let's at a minimum scenario and presume they're all earning the minimum wage that means they could be paying €180 per year under the Lenny Levy. If all 800,000 were to be exempt from the levy that would be another €150 million missing from the budget. A hundred million here, a hundred and fifty million there and soon we'll be talking about real money!

Update: It does sound from the statement that the government has adopted the idea from Fine Gael that savings could be made in the drugs area by more use of generics. I wonder if the media will even notice or acknowledge this. Also it now appears the government is modifying the competition act in order to make it possible for it to negotiate with the IMO in future, that might work locally but what about European competition law. They really are making it up as they go along.

Will Bertie be there?

So with the not unexpected announcement that pairs will be offered by FG only for those government TDs on actual proper business for the state, in this case the trip to China, the arithmetic for Wednesday's Dail vote on the Fine Gael motion starts to look somewhat interesting. For example, where will Bertie be I wonder? Is he even in the country? I've mailed them at his office to ask, I wonder if I'll get a reply. After all, I am a citizen, this is a republic, he still works for me, or is collecting a salary at my expense.

Possibly solution to the over 70s Medical Card mess

I'm talking out of turn here, but if anyone is interested in a practical solution to the over 70s medical card fiasco, there's my tuppence worth.

I might be asking a rather obvious question here but if the GPs charge the state €640 (the figure itself isn't really relevant at the moment) for giving people over 70 a level of card consistent with a medical card then shouldn't it be possible to set a number of bands of support and tailor the subvention from the state towards that 640 annualised figure that would relate to your income (we could look to factor in assets too but that would be really messy to administrate).

So let everyone under 17K (or whatever the annualised figure for the minimum wage is) per annum get 100% of that GP yearly charge paid by the state,
those between 17K and the average industry wage gets 75% of the figure paid by the state and pays 25% themselves (which at 100 odd quid for as many visits as you like isn't very bad value.)
Those at the 130% of the average industry wage pay 50%
those at 150% of the AIW pay 75% and
those on pensions over twice the AIW can pay the full whack or pay per visit.

I wonder if anyone will take the idea up, I've also no idea how much it would save. But this is the sort of pragmatic idea that our politics lacks. I believe that the government has acted in bad faith by removing the cover, but it also acted badly by providing the cover in such a profligate manner by giving the cover to all and sundry irrespective of income or wealth. I've long believed that the all or nothing status of the medical card is just plain wrong.

Perhaps someone from the department of finance might look to run the numbers...