Another Idea For Medicare Reform

by Stuart Shapiro

Reform to Medicare is coming.  The unsustainability of the program demands it.  Step one is to reduce medical costs, but Congress seems incapable of that (and gets accused of supporting death panels whenever they try).  Some have argued that raising the eligibility age is the solution.  The difficulty here is that while lifespans have increased, they have not increased uniformly.  Those who are in the best physical shape at age 65, are also the ones who financially need Medicare the least.  Ezekeil Emanueal (pictured) has an idea to address this:

But here is a better bipartisan reform: Graduated eligibility. Instead of having a fixed age at which people can get Social Security and Medicare, we should link the age of eligibility to lifetime wealth. The richer you are, the older you would have to be to be eligible for Social Security and Medicare.

Here’s how it would work. People in the bottom half of the lifetime earnings distribution would become eligible for normal retirement benefits at age 65 for Medicare and 66 for Social Security, just as they are today. But people in the next quarter of the lifetime earnings distribution would become eligible for the respective programs at 67 and 68, and those in the top quarter would become eligible at 70 and 71. All eligibility ages would increase over time, as they are scheduled to now.

I’m not fond of the idea for Social Security (just requiring all income to be eligible for social security deductions will take care of this program for a long time) but for Medicare, it has merit.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.