Using Medicaid dollars to provide premium assistance would help these people and create an insurance market that would grow over the years. It would turn Medicaid into a true insurance program (protecting people against sickness) instead of an entitlement program (buying things for people with taxpayer money). And it would save Uncle Sam billions, possibly trillions, in the years ahead.
Medicare, the federal program to cover the elderly, also needs critical reform. The trustees charged with managing the program forecast it will cost $85.6 trillion in the decades ahead, a number six times larger than our entire national economy today. And that figure almost certainly understates the problem, since it assumes that payments to doctors will grow less quickly than they have in recent years.
Again, the solution is the market. Instead of serving as a single-payer and buying medical care for people, Washington should use Medicare dollars to help recipients buy their own insurance. That way, they’d be able to shop around, switching plans or companies whenever a better deal was available.
A thriving health insurance market would only serve to drive prices down, which would benefit consumers and taxpayers -- in other words, all of us.
As economist Herb Stein once put it, “if something cannot go on forever, it will stop.” The economic turmoil on Wall Street must stop, and it will. Our government’s big-spending ways must stop, as well. There’s simply no way future taxpayers will be able to afford all the promises today’s policymakers are making through Medicare, Medicaid and Social Security.
The time to fix our federal financial house is now -- before the completely predictable entitlement crisis overwhelms Washington, today’s lender of last resort.