How to Save and Fix Medicare
It is often said that the American health-care system is an example of the free market failing. One can quibble about what failure means in this context. But no amount of Marx and Engels should be able to convince anyone that the American health-care system is a "free market." In particular, Medicare — our socialized health-insurance scheme for the elderly and disabled — covers 55 million people. That's 17% of the American population, or roughly the population of England. The program accounts for 15% of the federal budget and 3% of our economy.
While popular, this system is beginning to show its age and poses an ever-growing burden to the country's finances. Changes to the program in the coming years, whether through legislation or through pilot programs created by executive action, are unavoidable. What is less inevitable is the direction that these changes will take. Some wish to see a "Medicare-for-all" system, which would implement a universal socialized health-insurance scheme. In the 2016 presidential election, this was a key pillar of Senator Bernie Sanders's health-care platform. Others would sooner see a full privatization of Medicare. A better way might straddle the middle. Whatever the economic or social benefits of either approach, political reality dictates that a more incremental, targeted strategy has a much better chance of succeeding.
For those who see value in a larger private-sector role in the Medicare program, this incremental approach may very well be the ideal. Indeed, it would exploit innovations from the private sector to protect a program that is — and will remain — a vital part of the American safety net. The key will be shaping these changes in a way that will maintain the core goal of the program — protecting seniors from catastrophic medical costs — while enabling private-sector innovations to make the program more efficient.
Successfully navigating these politically challenging waters would pay dividends for taxpayers, Medicare beneficiaries, and America's health-care system as a whole.
A Brief History of Medicare
Medicare is one of the American political system's confused, rambling answers to the call for socialized health insurance akin to that of other countries. But that doesn't mean that Medicare's design problems today are....
Yevgeniy Feyman is an adjunct fellow at the Manhattan Institute and a senior research assistant at the Department of Health Policy and Management at the Harvard School of Public Health. Previously, he was MI's deputy director of health policy. Follow him on Twitter here.
This piece originally appeared in National Affairs