Of all the entitlement programs in the U.S. requiring reform, Medicare – the federal health insurance program for people who are 65 or older – presents the most difficult problem of all. The program’s actuaries project, under intermediate assumptions including full implementation of the Patient Protection and Affordable Care Act (aka Obamacare), the program’s total deficits will reach $547.4 billion by 2022, in that one year alone, just for this single program.
In a new Policy Brief, Heartland Institute Senior Fellow Peter Ferrara describes two opposing approaches to addressing the Medicare crisis. Obamacare, he notes, attempts to address the problem by “cut[ting] Medicare by $716 billion over the next 10 years alone, mostly by slashing Medicare payments to doctors and hospitals.” Those Medicare cuts total $5 trillion over the next 20 years, he notes.
The far better alternative, says Ferrara, is the Medicare reform plan proposed by House Budget Committee Chairman Paul Ryan (R-WI):
Obamacare would raid Medicare to finance Obamacare through arbitrary, draconian cuts in payments to the doctors and hospitals that provide health care to seniors. Ryan’s reforms would allow seniors to escape these draconian Medicare cuts. They would choose from among competing private health plans that must pay doctors and hospitals adequately to attract customers for their health insurance, because if their customers can’t get health care with their insurance, those health plans are not going to have many customers.
Ferrara explains how the Ryan reforms would help not only seniors, but taxpayers as well. “These Medicare reforms would also contribute powerfully to increased economic growth and prosperity,” he writes. “Instead of sharp tax rate increases that reduce economic growth, the burden of health costs is sharply reduced through market competition and incentives.”
“A Better Medicare for Seniors and Taxpayers” is the fourth in a multi-part series Ferrara is writing on entitlement reform for The Heartland Institute.
Earlier installments in the series are available at the links below:
Peter Ferrara, “A Winning Plan for Entitlement Reform,” Policy Brief, The Heartland Institute, December 13, 2012, http://heartland.org/policy-documents/winning-plan-entitlement-reform
Peter Ferrara, “The Foundation for Entitlement Reform: Get American Booming Again,” Policy Brief, The Heartland Institute, March 11, 2013, http://heartland.org/policy-documents/ foundation-entitlement-reform-get-america-booming-again
Peter Ferrara, “Social Security Personal Accounts: Prosperity for All,” Policy Brief, The Heartland Institute, June 14, 2013, http://heartland.org/policy-documents/social-security-personal-accounts-prosperity-all