The truth about Medicare

Calculating its limits

We all get old and we all get sick before we die when we get old. These days we usually get expensively sick, which is why Medicare has been such an important program for the elderly. Unfortunately, it cannot go on much longer in its current form. Yet a reform of Medicare poses a nasty social dilemma. Highly popular politically, it is deep in trouble economically. Medicare now covers 34 million elderly, but over the next three decades there will be an increase to an estimated 72 million elderly, encompassing close to 20 percent of the population. The Medicare Trust Fund is expected to run out of money in 2008 and-if the program is not changed-to incur annual deficits in the range of hundreds of billions of dollars in the decades thereafter. Yes, hundreds.

Perhaps the most discouraging news is that (according to a late-1998 survey supported by the Kaiser Family Foundation) only 22 percent of Americans believe Medicare is headed for a "crisis," though some 40 percent concede that it has some "major problems." Only one reform option is currently favored by a majority of Americans, and that is that higher-income elders should pay more. Medicare is well liked, even considered indispensable, but only 31 percent favor an increase in payroll taxes to fund it.

Sound familiar? Recall the 1994 Clinton health-care debate, which showed that most Americans wanted universal health care and believed that, if necessary...

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About the Author

Daniel Callahan, a former Commonweal editor, is president emeritus of the Hastings Center and the author of What Price Better Health: Hazards of the Research Imperative.