Extending Medicare to everyone makes good economic sense
In yet another attempt to bridge the debt ceiling impasse by reigning in entitlement spending, President Barack Obama recently proposed raising the eligibility age for Medicare from 65 to 67. As we pass Medicare’s 46th anniversary on July 30, I propose that rather than raising the age for Medicare, we consider lowering it instead. In fact, let’s lower it to zero.
This is not as offbeat as it sounds. Expanding and improving Medicare -- essentially creating a Medicare-for-All national health insurance program -- would eliminate the administrative duplication that pervades the private insurance industry, capture economies of scale, and use more of the health care dollar for actually improving health and preventing illness.
Employers would have the health insurance monkey off their backs, allowing them to better compete in the global marketplace. And a national health program modeled on Medicare would allow the U.S. to join the ranks of other advanced democracies that provide health insurance to all their citizens.
Since its creation, Medicare has turned out to be an enormously successful program, as measured by universal access to benefits, portability, minimal administrative costs, and overall popularity among its 47 million current beneficiaries. And relative to private for-profit insurance, it has done a better job in pooling risk, bending the cost curve, and making timely payments to doctors and hospitals. Yet Medicare as it exists now is by no means perfect.
The average Medicare recipient is finding it increasingly harder to afford the growing out-of-pocket costs of health care. Many will skimp on necessary care, or just go without. And Medicare’s looming insolvency, currently projected to occur in 2024, is deeply concerning to beneficiaries, government actuaries, Congress and health policymakers alike.
Expanding Medicare to cover everyone would address these problems. Since young and middle-aged adults and their families are healthier than current Medicare beneficiaries, and therefore have lower health care expenses, an expanded risk pool under Medicare-for-All would have an average per-beneficiary cost that’s much less than the current cost for seniors (over $10,000 per current enrollee). And since expanded revenues would be greater than projected expenses,
Medicare’s Trust Fund could be replenished, and personal out-of-pocket costs could be minimized. Of course, financing an expanded Medicare program would require the non-elderly to pay an increased tax on income, but this would be modest, progressive, and a fraction of the exorbitant private insurance premiums they’re paying now.
To my critics who would decry a universal Medicare program as “government-run health care” with its implied rationing and restrictions, think about how the for-profit insurance companies control your choices now. Then recall the image of the health care townhall protestor in 2009 who shouted, “Keep your government hands off my Medicare.” Can you think of a better testimonial to the non-intrusiveness of the federal government in individual health care decisions? And as a physician, I find it much easier to deal with Medicare than with managed care plans.
It is clear that reducing government spending and thus forcing beneficiaries to pay more out-of-pocket will not by itself preserve Medicare and keep it sustainable for the baby boomers. Rather, what needs to be done is to find a better way of financing this important social insurance program so that it remains viable and available to future retirees. The solution is a single-payer national health insurance program modeled on the success of Medicare. That would be the icing on the Medicare birthday cake.
Dr. James Mitchiner, an emergency medicine physician, is the former president of the Washtenaw County Medical Society, and a member of Physicians for a National Health Program.