August 21, 2012 by Anders Ingemarson
It appears Medicare reform may play a role in the upcoming presidential election. Early on the stress has been on who will best preserve Medicare. Not much reform if you ask me. I hope Romney & Ryan have the vision and guts to move the debate beyond this level and initiate a real discussion of the future of Medicare.
What would the future look like? As an advocate for the total separation of state and the economy the answer is obvious. Get the government out of Medicare altogether. Forcing some people to pay for other peoples’ healthcare is morally wrong; it is a violation of the payers’ individual rights.
While the end goal shouldn’t be in doubt, we have to acknowledge that today the majority of American seniors depend on and wouldn’t easily replace Medicare with something else, either for financial reasons or due to lack of other options.
So how do we do it? I think we need a gradual “detox”. Realistically, we’re probably talking decades not unlike my thoughts on getting out of Social Security.
We need an age limit above which Medicare coverage is maintained. Maybe Paul Ryan’s proposal of 55 is ok, maybe it should be later. Whatever the age limit, it must be combined with options for individuals to opt-out altogether, ideally in return for tax credits. And to make opting out an attractive alternative, we need to deregulate the health insurance and healthcare provider markets to get the creativity of American insurance and healthcare professionals going. This will encourage the 55 and over to look for better alternatives.
What about those under the age limit? How about a combination of gradual increase in deductibles and copays? Let’s say 5 percentage points per year of age, meaning that anybody under 35 (if the age limit is 55) would have to plan for taking care of his own healthcare in old age. This is plenty of time for good planning. And offering to opt-out in return for tax credits for this group as well will most likely speed up the process.
This would end new Medicare enrollment after 20 years. With a cashing out option added to entice the holdouts to leave the system, we’d be rid of the entire thing after 50 years. Too long? I’m listening; I’d love to see a proposal cutting it in half or more.
These are just a few ideas that I’m sure have been kicked around in different political, policy-wonk and think-tank circles. The practical implementation is not that difficult folks, once we get acceptance for the idea that robbing Peter to pay Paul’s Medicare costs is morally wrong. The latter is the real challenge. But offering a realistic, practical, and non-threatening way out of our current Medicare mess will go a long way towards the separation of government and healthcare for seniors.