Guys, Medicare's Bankruptcy is No Big Deal

Posted: Sep 29, 2009 6:13 PM

Washington Post wunderkind Ezra Klein thinks that Medicare is, like, an awesome program that may be driving us bankrupt, but in the process of driving us bankrupt, will help reign in our health care costs! Come again?

Medicare is going broke. It will bankrupt us. Case closed! Except for one thing:

So will private-sector health care.

The story here is simple. You've heard it a thousand times. Health-care costs are growing more quickly than wages or GDP growth. Much more quickly, in fact. If that trend isn't arrested, there's only one outcome: Costs will overwhelm us. That's true for Medicare and true for the rest of the health-care system.

The relevant question, then, is not whether Medicare will bankrupt us, but will it do so more quickly than private health-care insurance?

...Medicare's rate of spending will bankrupt us, but more slowly than private health insurance. Which would give us more time to figure out a fix.

This is not the relevant question. As has been well-catalogued, Americans' private health care spending has risen in conjunction with the percentage of their incomes spent on other life necessities (food, housing) has been precipitously dropping. Medicare's costs have been skyrocketing and are projected to overwhelm us at the same time that most other sectors of government spending are doing the same thing.

The other relevant question that immediately pops to mind is: whose behavior is more likely to change? Politicians who have a sweet handout program to an important voting bloc that don't want to see their benefits cut? Or private persons who will sit at home and see that no, they shouldn't get an MRI when they feel like they're coming down with a case of the sniffles? (Example has been exaggerated for effect.)