Medicare as a Model for Health-Care Reform?
By: Veronique de Rugy
The Corner
How often have you heard that Medicare should be the model for health care reform? Often. Papers like this one were written on the topic, praising the program for its ability to control costs, and it was the idea behind the public option. In fact, when on the road to campaign for health-care reform, the president was heard telling his audience that "if we're able to get something right like Medicare, then there should be a little more confidence that maybe the government can have a role."
Really? The government is proud of how it has managed Medicare?
In my piece this morning in The American, I look at Medicare's financial situation. The bottom line is that the program is broke, and things are about to get much worse. First, spending on Medicare will explode and consume a larger and increasing share of GDP. Also, since 2008, spending on the program has exceeded revenue. This means that U.S. Treasury will have to increase dramatically its coverage of the deficit with our tax dollars (labeled “General Revenue Transfers” above).
However, current law allows the use of General Funds up to a certain point but makes no provision to finance the rest of the deficit (labeled "deficit" above -- the orange portion of the chart). So unless Congress adopts a law to fund this deficit (which in the current financial environment won’t be easy), beneficiaries of these services could see its provision interrupted.
Medicare spending is clearly out of control, and I am the first one to advocate that it should be reformed and dramatically cut. Medicare, for instance, should exclusively cover those in our population who are too poor or too sick to take care of themselves. The rest of us should be in charge of our own medical care (and retirement, for that matter). However, the cuts should be the result of a legislative reform rather that due to an arbitrary lack of funding from a legislative loophole.
The whole thing here.
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