Reduce benefits to a level we can sustain
Unless we revisit what Medicare promised, and cut back certain benefits, Medicare's trust fund will be depleted within a few years. When this program was created in the 1960s, no one anticipated that so many expensive medical technologies would be developed or that the cost of this program would escalate at 10 percent or more per year. Before the baby boomers retire, we need to pare down benefits, revise the eligibility rules, and make affluent retirees pay more of their own health care costs. To ensure that the needs of future generations are met, commitments to the elderly need to be trimmed to a level we can afford.
What Should be Done?
To reduce costs, restrict the procedures Medicare covers, especially high-cost procedures for older retirees, such as kidney transplants. Require retirees to get their health care through HMOs, which have a proven record of reducing costs. Accelerate the schedule for raising the eligibility age for Medicare to 67, and consider raising it to 70. Retirees who can afford to pay a larger portion of their health care should be required to do so. This applies particularly to Medicare Part B, which is paid out of general revenues. Place strict limits on home health care, one of the main reasons for the soaring cost of Medicare. Medicare recipients should pay higher deductibles to convince people to think twice about whether they really need certain medical procedures.
Arguments For This Approach
Over the long term, the federal budget cannot be controlled without restraining spending for Medicare, the fastest growing major program in the federal budget. The only realistic way to sustain Medicare is to substantially change the program, cutting back some benefits and imposing restrictions on how retirees get their health care. People will continue to overuse expensive medical services unless they bear more of the cost through higher deductables. The existing Medicare system provides generous benefits to millions of well-heeled retirees who don't need public subsidies. There's no reason to encourage people to retire at age 65 by offering full Medicare benefits. Most people in their mid- to late-60s are healthy and able to work for at least a few more years. Medicare costs have increased far more rapidly than private sector health care costs, largely because Medicare doesn't require people to use HMOs. If we don't take serious measures to contain the cost of Medicare, the soaring cost of providing health care to the elderly will force us to cut back on other essential public programs.
Arguments Against This Approach
Health care is uniquely important and isn't an area in which we should cut corners. If doctors can help elderly patients with a certain procedure, Medicare should provide funds to make it possible. The average elderly person pays almost $900 a year in out-of-pocket costs for medical care that is covered by Medicare. It's unacceptable to ask them to pay more. Medicare was supposed to protect retirees from financial insecurity in old age. Linking benefits to retirees' income will undermine support for Medicare, which is popular because it is universal. Furthermore, it punishes those who have worked hard and been financially prudent. Requiring retirees to use HMOs may result in inadequate medical care for older Americans. It takes away people's freedom to choose their own physician. Most people plan throughout their working life on retiring at a certain age. We shouldn't change the rules by raising the age at which people qualify for Medicare benefits. As long as retirees have a Medicare credit card that pays for their health care -- at a low personal cost -- the cost of health care for the elderly will continue to soar. Our system of providing for the health care of the elderly needs to be fundamentally changed.
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