The Hudson Institute’s Jeremiah Norris has a great article today in Investor’s Business Daily on the elephant in the room that’s being overlooked amidst all the health reform brouhaha.
In 20 years the country will have many more retired people as a proportion of the population. The population will therefore suffer from far higher rates of chronic diseases such as diabetes and cancer.
Old age inevitably means increased health care costs. According to the National Cancer Institute, the risk of being diagnosed with cancer doubles from age 50 to 60. In 1900, the average U.S. life expectancy was 47.3 years, and in 2008 it reached 78. By 2020, it is estimated at 82 years.
It is little wonder, therefore, that health spending as a proportion of GDP has risen from 1% in 1900 to 16% today.
The current debate simply does not factor in the massive increased costs of an aging population. In 2000, America had 4.6 workers per retired person. By 2040, that will plummet to just 2.6.
Although the government has stated that its plan will be sustainable – due in part to the savings that preventive care will deliver – this assertion has been challenged by both the Center for Budget and Policy Priorities and the Tax Policy Center (a joint Brookings-Urban Institute project), neither of which are particularly known for their free-market viewpoints.
Obviously, we’re not going to ask old people to jump off a cliff to save money (a solution that was satirized by Christopher Buckley in Boomsday a few years ago.) But in the face of mounting, inevitable costs, what’s a taxpayer to do?
Medicare is insolvent already, and due to run out of money completely by 2017. The program is unsustainable in its current incarnation and requires a complete overhaul – not just an “increase taxes to fund it” band-aid.
Unfortunately, a program that is ostensibly “voluntary” actually isn’t, as seniors who opt out also forfeit their social security benefits. This should be terminated immediately, so that those seniors who decide they’d prefer to be covered by private insurance are able to do so without an added financial hit. Penalizing individuals who don’t want to participate in a government program by taking away their money is childish and absurd.
In addition, seniors still under Medicare should be allowed to spend their own money on medical care if they want to – for more frequent visits, alternative care, medical privacy, or any other reason.
These fixes will not save Medicare, but they will alleviate a small part of the burden. If seniors want to shoulder their health costs, let them.