NYT: Means Testing for Medicare
“If taking care of the poor is the real value in welfare programs, those programs should be sold as such to the electorate. We shouldn’t give wealthier people benefits just to “trick” them, for selfish reasons, into voting for greater benefits for everyone, the poor included.”
“Means testing” — cutting back on payments to the relatively wealthy — is one way to better allocate benefits. For health care costs, this could be done by expanding Medicaid, which is focused on the needs of the poor, and making it an entirely federal program rather than one partly paid for by the states. At the same time, the government would need to limit the growth of Medicare, which is universally applied to all elderly people; as a segment of American society, the elderly are relatively wealthy. With limited resources, it would be better to reallocate health care subsidies toward the poor, whether they are young or old.
“Targeted social benefits have been used successfully around the world. Mostly for fiscal reasons, Finland, Sweden, Britain and Australia all have moved toward a greater use of targeted benefits for those who need them.”
“The best option is probably to tie the size of Medicare benefits to a person’s lifetime income, which is relatively easily measured and hard to game, rather than to one’s income or assets in any current year. In essence, higher earners would receive lower benefits instead of facing the prospect of higher taxes, as current trends predict. This policy reflects an ethic of individual responsibility — namely, that people who have earned well throughout their lives should be expected to take care of themselves, precisely so that the truly unfortunate can be helped.”
This article should be sobering to anyone who thinks that government involvement in the provision of health care for the needy is inherently unsustainable. The truth is that medicare has grown into a micro single-payer system, without the access restrictions that are necessary to keep such a system from running itself bankrupt. An ethically sound health care system, even one that doesn’t require centralization or rationing, is possible so long as public benefits are targeted to those who truly could not afford care otherwise. We don’t need to force the government’s hand completely away from health care and pretend that private charity would make everything work. We just need a system that draws more rational distinctions between private and public funding of health care, with the latter going only to the truly unfortunate. If the government covered the bill only for the poor, we wouldn’t see such a huge problem with the reimbursement rates that are paid for their care. Physicians would likely see the ethical legitimacy in being reimbursed at lower rates for this much smaller portion of the population, while the rest of the population pays fees that are determined in the market and are ultimately more sustainable. You have the innovation, flexibility, and efficiency of a private system, with a safety net for those at the bottom. I can only hope that this is discussed in the coming election, or at least once the victor has taken office.
