Author: Medicare Faces Midlife Crisis

Published May 1, 2002

“Midlife crisis” is the term given to the feeling many of us get around age 40: a fear that our time on this Earth is running out. This is a fair description of Medicare, a socialized health care experiment whose time is running out.

Some psychology experts don’t acknowledge the existence of a “midlife crisis.” They suggest at around age 40 we become aware of an unidentifiable gnawing concern or dissatisfaction with the way things are … but no crisis. That, too, could also describe Medicare, born in 1965 of a liberal desire for national health care, and now dysfunctional in the twenty-first century.

In Medicare’s Midlife Crisis, Sue Blevins explains, in almost John Grisham detail, the fascinating, almost clandestine background of how Medicare came about: who was singularly responsible, how details were hidden from the public, and why there was no review or balanced discussion on the legislation. If you think the Enron tale makes interesting reading, try reading Medicare’s Midlife Crisis for a satisfying dose of conspiracy, manipulation, and fraud.

All About Politics

The book is organized into six chapters:

  • an introduction to Medicare and broad overview;
  • an examination of the history of health care in the United States and early efforts to impose single-payer health care;
  • a discussion of the evolution of Medicare and the political climate at the time;
  • a look at how government officials hid the true cost of the program during its early stages;
  • an analysis of the Medicare program’s costs since 1965; and
  • ideas for reform.

Blevins clarifies why Congress created three separate government programs—Medicare Part A, Medicare Part B, and Medicaid—and who benefitted the most from this approach. Clue: It was not consumers. Blevins writes, “Combining the three programs would make it appear as though Medicare were voluntary and that seniors would have access to private health insurance.”

Of the many surprises in store for readers are the factual and little-known consequences of the Medicare mandate. Anyone who declines Medicare Part A, for example, forfeits all claim to earned benefits under years of payments to Social Security. Part B, while allegedly “voluntary,” traps citizens by increasing the premium 10 percent a year for every year a citizen delays enrollment beyond age 65.

Because of these forced incentives, senior citizens can no longer access a private, individual insurance market for full health insurance coverage—that market has gone the way of dinosaurs, killed by the government’s desire to have a monopoly over senior care. Moreover, cash no longer works either. Congress has made it illegal, with stiff financial penalties and up to 10 years in jail, for any doctor who accepts Medicare patients to take money for services provided to eligible but non-Medicare patients.

Blevins explains how seniors now pay nearly as much of their income for out-of-pocket medical costs as they did before Medicare. She notes that despite the massive financial resources taxpayers pay into the system, many retirees discover (usually too late) that Medicare does not cover catastrophic illness, nor does it cover long-term care.

So why do we have a restrictive government-run health plan for seniors, when private alternatives would be cheaper?

Blevins suggests one answer is politics: “Politicians gained too, by creating a government program that personally affects a very large and powerful voting constituency. Today, many politicians seek seniors’ votes with the promise to expand benefits while [keeping] Medicare solvent.”

No Panacea, Just a Plan

The book does not offer a panacea for fixing the problem. “Rather,” writes Blevins, “in order to cure the problems we face with Medicare, we need to first establish a diagnosis.”

Nevertheless, she does offer up a reform proposal. She presents the work of Andrew Rettenmaier and Thomas Saving, both economists at Texas A&M University, who have developed a proposal to transition pay-as-you-go Medicare to a program that relies on fully funded medical accounts owned by individuals. I won’t give away the plot here, so please go to Chapter 6, “Reforming Medicare in the 21st Century.”

Any book worth the price of admission has to deliver something of value. In the case of Medicare’s Midlife Crisis, readers get their money’s worth in an overview of how Medicare affects the public today and how, if not reinvented, it will burden health care users, both financially and emotionally, 30 years from now.

If you have an interest in Medicare by virtue of your profession or your age, you should read this book. If you have no interest in Medicare, you really need to read this book, before you too are trapped in government-run health care.

For more information …

Medicare’s Midlife Crisis was published by the Cato Institute in November 2001. You can order the book on the Internet at the Cato Institute’s Web site,, or by pointing your Web browser to You can also order by phone, toll-free, by calling 1-800/767-1241.