How to start an adult discussion of Medicare

Now is a good time to take a deep breath and entertain a serious discussion about the future of Medicare. Republicans just lost a special election in New York that should have been theirs. They lost largely due to their new-found embrace of Medicare cost containment. Democrats are rushing to exploit the unpopularity of the Republican approach, forcing Senate Republicans to go on record endorsing the Ryan budget. Former President Bill Clinton is worried about this approach and I agree:

“People made the judgment that the proposal in the Republican budget is not the right one,” Mr. Clinton said. “But I’m afraid that Democrats will draw the conclusion that because Congressman Ryan’s proposal is not the best one, we shouldn’t do anything. I completely disagree with that.”

Instead it would be nice if party leadership and voters would steer the debate in a more constructive direction. In my view, that would start with the articulation of a few consensus points, such as:

  • The Medicare financial crisis is upon us now. Contrary to common belief, there is no Medicare “trust fund” –at least in the traditional sense of the word– that is paying for Medicare from now until 2024. Instead, 43 percent of Medicare is paid for by general revenue
  • Medicare is fundamentally unfair to the younger generation of Americans. Current beneficiaries have not in fact paid into the program in a substantial way, even though they may feel otherwise. Their contributions have funded just a small minority of their expected payouts
  • Medicare cost containment does not have to be a zero sum game. Considering the large per capita spend on Medicare and the imperfections in the US health care system, it should be possible to do more with less

Agreement on those points (and maybe there are others to add) could lead to the formulation of some more detailed policy positions. I’d like to see:

  • A willingness to change Medicare for everyone, rather than exempting people who are already in the program or who are entering it soon
  • Needs testing for Medicare beneficiaries. I see no reason not to tie Medicare premium costs to income and wealth levels
  • An admission that we can’t afford everything, and the setting of an enforceable limit on spending levels
  • More humility in predicting the effects of sweeping changes to health care delivery and financing. Experimentation at the state and local levels
  • A change in consumer perception about the level of treatment needed. In other words, it would be good for people to develop a more conservative approach to medical intervention
May 26, 2011

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