What to do about Medicare

We don’t talk about Medicare that often here, so in response to Dr. Donald May’s comments, I’ll point readers to what the Cato Handbook for Policy Makers has say about it. Here’s the summary table from the chapter (PDF) on Medicare.

Congress should

• establish, in all parts of Medicare, premiums proportionate to lifetime earnings;
• allow seniors to opt out of Medicare completely, without losing Social Security benefits;
• give Medicare enrollees a means-tested, risk-adjusted voucher with which they may purchase the health plan of their choice;
• limit the growth of Medicare vouchers to the level of inflation;
• allow workers to save their Medicare taxes in a personal, inheritable account dedicated to retirement health expenses; and
• fund any “transition costs” by reducing other government spending, not by raising taxes.

Cato makes a convincing case that a great deal of what’s wrong with health care today lies with Medicare. How can it be otherwise when it is the single largest “insurer” in the country, having not only market clout but the force of law?

That said, the attempt to squeeze Medicare to pay for an expanded role for Medicaid and government generally shows the danger of relying on a public program for health care: Your program is only as strong as the designs of politicians will allow.

Cross-posted from State House Call.

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.