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End Medicare As We Know It

The intractable Israeli-Palestinian conflict has been raging and smoldering since I was born, over half a century ago. This suggests that it is an insoluble conundrum, yet all parties to the conflict and others admit that they know what the contours of the final peace would be. This reality heightens everyone’s frustration. The process is frozen within close view of the end zone.

The Medicare crisis is analogous to Middle East peace process. The challenges are well known and the solutions are obvious. Yet, decades go by and politics have kept politicians, and those they serve, out of the end zone. They’ve been fumbling the ball for a generation. Now, it’s 4th down and they want to punt again.

The problem is that the Medicare program is headed toward insolvency. The solution? Here’s three Mensa suggestions:

  • Scale back benefits
  • Spend more money
  • Raise the age of eligibility
Most folks support scaling back benefits, as long as it’s someone else’s benefits that will be adjusted. Similarly, Americans are prepared to pay more to keep Medicare viable, as long as it’s on someone else’s tab. Everyone supports raising the eligibility age, as long as it applies to folks younger than they are.

This is why reformers are proposing that changes in Medicare would apply only to those who are younger than 55-yrs-old. Of course, the proper Medicare reform proposal would be to implement changes on everyone, or perhaps excepting those who are current Medicare beneficiaries. While no one wants their existing benefits to be cut, this is happening in the private and government sectors throughout the country. Consider the new paradigm for public workers’ collective bargaining rights in Wisconsin and Ohio. With regard to Medicare reform, sparing the over 55 crowd is purely a political calculation. This transparent maneuver is designed to insulate politicians from the wrath of those in the Medicare program and those who are on-deck to enter it.

Representative Paul Ryan, Republican from Wisconsin, has proposed a Medicare reform plan where those under the age of 55 would be given a voucher that could be applied toward private insurance. This was the response from Democrats and President Obama.

This would end Medicare as we know it.

This response is clearly a product of Democratic focus groups, as the same phrase is coming out of so many different mouths.

Considering that American are living and working longer, shouldn’t the age that we become eligible for Medicare be raised, particularly since the program in its current form is not sustainable?

Is the Ryan proposal a panacea? It’s hard to judge the proposal on its merits since the Medicare issue is permeated with politics. I credit him and his supporters for a bold opening to a conversation our government needs to have with us. Instead we’ve been given their version of straight talk, which is as straight as the image below.

I’m under 55-yrs-old and I am willing to delay my entrance into Medicare and to accept reforms that will prevent the program from heading over a cliff. If that happens, and the system crashes to earth, wouldn’t that be a worse outcome than accepting some Medicare modifications?

I’ve conducted my own focus group. When folks ask me why I would change Medicare and toss our elderly overboard, here’s my response. If we don’t implement meaningful structural changes in the program, then

Medicare would end as we know it.


  1. Mike
    Not the answer. See KFF on this very subject--savings are a trifle. 65 and 66 year olds (or older depending on your vision) would go into Mcaid, or depending on how the system is reshaped, enter the world of the uninsured with all its attendant problems--increase morbidity, delay and catch up ($$) once entering Mcare, etc.

    Not the answer. MENSA says try bullet points 1&2, and add 4--providers of every stripe take a haircut due to efficiency purges.


  2. Medicare currently is the great savior of the population. If private insurance companies had to deal with the many illnesses of Medicare patients, then the companies would go broke. Diverting to Medicare to take care of the end stage COPD, stroke, MI and other complicated patients keeps the general Medicare and insurance system alive.
    Part of the problem with Mediare is the office visit copay of only 20% to yield around $14 in my area and the annual deductible of $162. Raising copays and deductibles for inpatient and outpatient care would make patients think twice about overutilizing the system. Medicare is not just for people over 65, but the disabled also use Medicare. Many services that Medicare covers, such as free $5,000 power chairs, free oxygen, and free diabetic supplies cost the system billions. To survive, Medicare also will need to limit CTs, MRIs, echos, and other very expensive tests that may provide little benefit to patients at the end of life. Unfortunately, I see a lot of prior auth work in the future of Medicare.

  3. Brad - I don't think your summary of the PDF from Kaiser is entirely accurate or even honest. The question is: what happens to all the folks who would have been eligible for Medicare but won't be when reform is enacted? You assume that the oldsters will have to deal within the current framework and will all be dumped into Medicaid. If reform were instituted RIGHT NOW, there would still be ten years before that happened, and by then maybe some sober voices would propose economically viable solutions to this entitlement mess.

    The "efficiency purge" I suppose means throwing out physicians, especially primary care physicians, who aren't salaried by hospitals and other corporations. Given the upcoming manpower shortages in medicine, it seems that you would be "acting stupidly", don't you think?

    Of course, we learned in last week's commentary that the cure for manpower shortages is to drop medical training standards and let anyone who can pay the tuition become a "health care provider".

    Can you imagine? We'd have to drive to Canada to get decent care.

    Anyway, I'm over 55, so those government SOBs better keep their hands off my Medicare ;)

  4. @ A. Bailey:
    I described KFF correctly, but the playing out of their scenario is contingent on implementation of the system as envisioned, with the tweaks Micheal outlines.

    All bets are off with modifications beyond those upcoming, or certainly if ACA is struck down or gutted.

    My point is, where there is a push in one aspect of the system, mainly Mcare exodus due to age restrictions on one side; there is a countervailing pull on the other--absorption of these folks into commercial, Medicaid, or uninsured domains. They all have costs (or savings), and the age change is not necessarily a net surplus for the budget.

    KFF illustrates that well.


  5. You said: Considering that American are living and working longer, shouldn’t the age that we become eligible for Medicare be raised,but if s/s benefits parallel Medical benefits, there is this to consider:

    But longevity improvements are highly concentrated among upper-income and well-educated Americans. Over the past twenty five years, life expectancy at age 65 has increased by just one year for lower-income men, compared to five years for upper-income men. As the graph below shows, men in the bottom half of the earnings distribution have shorter life expectancies today than men in the top half had back in 1982. For women in the bottom half of the earnings distribution, life expectancies actually have declined over the same period.

    Reducing benefits for everyone on the basis of longevity improvements for only the most prosperous Americans would be an inequitable and poorly reasoned policy response.


  6. Interesting point, Melody. Would would you suggest we do?

  7. Looks like Dems like Medicare the way it is. Their plan? Let the GOP take the heat for trying to make the system solvent.

  8. Melody, I begin by disagreeing with your opening sentence. You are adding much intellect to the blog. I agree with you that for profit insurance companies have not delivered us to the medical promised land. The government's programs, Medicare and Medicaid, are deeply flawed also. I fear that the current reform efforts will settle for mediocrity, rather than strive for excellence. Of course, we have a public who wants every conceivable medical benefit on someone else's tab. How long can that model go on? Your cynicism is understandable. Thanks for your excellent comments.

  9. Why do people have to retire at 65 and get free healthcare from the gov't. The retirement age has to rise. Yes, that will decrease our patient pool temporarily, but people will just work longer and have insurance thru work.

  10. While the solutions are obvious, I doubt that our politicians will have the political will to implement them. Look forward to either the status quo, or some trival tweaking of a broken system.

  11. Its interesting that you call to privatize medicare, yet wont free up the monopoly doctors have over their numbers. Free markets for everyone else, a thieving cartel for ourselves.

  12. You sound quite angry and cynical. I certainly don't feel I belong to a 'thieving cartel' or a monopoly. The government control of Medicare is taking the program toward a high cliff. Will you pay more? Will seniors accept less? What are your suggestions?


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