Medicare

The problem we are encountering with Medicare is the same that we saw with the Bush attempt to fix Social Security. In both situations the cost problem has developed into one of ideology. The Republicans want to privatize the system and the Democrats want to keep these as government plans. As long as they continue to fight this battle ideologically nothing will be done.

I think the Republicans have to concede that now is not the time to privatize. Current Medicare premiums rage from $96.40 per month to $369.10 per month depending on income. The higher amount is for individuals whose income is greater than $200,000 per year. By doing the math it can be shown that there is room for adjustments here. A single person who gets $10,000 per year from social security pays 12% of their income for part B whereas a person who earns $200,000 pays 2.2%. One way to improve the cost problem is to increase the amount paid by higher income people. The second change is to increase the age when people become eligible for Medicare. It was set at age 65 when Medicare was started back in 1965 and has never been changed. This age could gradually be increased as the baby boomers retire.

In addition to the above changes it is also necessary to formally ration benefits. The current Republican plan allows insurance companies to ration and Obama’s plan sets up a committee of 15 government employees to ration. We know that we cannot provide every medical service to every Medicare recipient so the question is how do we ration? The first step is for everyone to understand that we have been rationing health care in both private and public plans for many years and then we can formalize how we ration. Up to now we have been doing this on the sly.