Kevin Drum, taking as a given that most of us are perfectly satisfied with our current health coverage but scared of losing it, offers an interesting solution:
[E]xpand Medicare (or create a similar program) to cover every person in America under the age of 21. And then let them keep it as they grow older. In ten years everyone under 31 would be covered. By 2050 at the latest the whole country would be covered — and probably earlier than that once the program reaches a critical mass. Taxes would rise slowly to cover each new cohort, employer healthcare would gradually go away, union contracts would have decades to adjust, and no one would have to give up anything they have now.
This is just watercooler conversation. I’ve given it no serious thought at all. But why not?
Mostly, because it largely ignores the costs issue.
To be sure, insuring young people is relatively inexpensive, since they aren’t large consumers of medical care. And people in their 20s make up a significant chunk of the uninsured, too, so it would plug a significant hole in the current system.
But the major problem with the current system isn’t “lack of insurance” so much as ridiculously high health care costs owing to high doctor fees, overuse of incredibly expensive tests and procedures to cope with tort liability issues, and other issues. This would do nothing to address that — and would presumably delay the sense of urgency to do so — while increasing the number of people on the public entitlement rolls.
Update (Steve Verdon): The biggest financial problem facing this country from a fiscal perspective is Medicare. Medicare is going to run out of money well before 2050 and things are going to start looking pretty grim in ten years.
According to the CBO in 2050 Medicare and Medicaid will account for 20% of GDP. That is, one out of every five dollars the economy produces will go just to Medicare and Medicaid. Or think of it this way, the entire federal budget will be only for Medicare and Medicaid, all other spending will have been crowded assuming that the federal budget is no more than 20% of GDP. That means no more defense spending, no more environmental spending, no more monuments, Library of Congress, Commerce Department, Labor Department, FERC, FDA, FCC, or Department of Education. If we keep these things and at a share equivalent to what we have today that means government spending will account for 40% of GDP. Add in state and local governments and the government will basically be well over 50% of the economy. And all this is without expanding demand.
So while James’ point that insuring the young is relatively cheap, when you increase demand and supply doesn’t shift, you get an increase in price. So Kevin’s idea will only hasten the point at which things will get bad. Further, Medicare doesn’t worry about things like risk. Why should it? After all it has the entire tax base upon which to depend on for funds. If you want a health care system that is really screwed up like nothing we’ve every seen, then Kevin’s idea is for you.
