Making Medicare Work: Ensuring Coverage in an Age of Exploding Costs

Since its inception in 1965, Medicare, the national health-insurance plan for the elderly, has transformed health care for the nation's retirees and the disabled. Nearly every elderly American is covered by the program, dramatically improving both the health and financial well-being of Americans senior citizens. Unfortunately, several powerful trends spell financial trouble for Medicare in the near future. (Find out more about our "Choicework" discussion guides, or download the PDF version of this choicework guide).

Perspective 1

Maintain Our Current Commitment to the Elderly

Keep the basic structure of Medicare intact, ensuring that all Americans are eligible for benefits when they retire.
Make modest adjustments that cut costs without threatening the basic structure, such as stronger penalties for fraud and more preventive medicine so that the need for expensive treatments can be minimized.
Raise taxes or cut other government programs so that Medicare’s increasing costs do not drive the nation into unsupportable debt.

Arguments for:

Providing for individuals as they age is one of the fundamental responsibilities of government.
Everyone who has paid into Medicare, regardless of their income, deserves to have their health care costs covered in retirement through public funds.

Arguments against:

Unless we rethink how we do Medicare, the costs will become staggering in the years ahead, and we won’t have enough for other critical needs, such as national security, education, or developing new sources of energy.
It’s wrong for wealthy retirees get benefits at the nation’s expense while 40 million Americans have no health insurance at all.

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Perspective 2

Make Medicare Affordable by Focusing on Those Who Need it the Most

Require that retirees who can afford it pay a larger portion of their health care costs.
Gradually raise the Medicare eligibility age a reasonable amount to account for the fact that people are living and working a lot longer than they used to.
As difficult as it is, we simply have to find a fair and acceptable way to set limits on “heroic” health care measures for senior citizens that is contributing so much to rising health care costs. We simply can’t afford for everyone, no matter how old they are, to have a liver or heart transplant.

Arguments for:

If we don't take serious measures to contain costs, the soaring expense of providing health care to the elderly will force us to cut back on other essential public program, raise taxes through the roof or drive up our federal debt to crippling levels.
The existing Medicare system provides generous benefits to millions of well-heeled retirees who don't need public subsidies.

Arguments against:

Linking benefits to retirees' income will undermine support for Medicare, which is popular because it is a “universal” rather than a “targeted” program (that is, it is a program for everyone once they reach a certain age).
Health care is uniquely important and isn't an area in which we should cut corners. If doctors can help elderly patients with a certain procedure, Medicare should provide funds to make it possible.

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Perspective 3

Make Health Care in Retirement a Matter of Personal Choice, not a Shared Responsibility

Replace Medicare with a system of medical savings accounts for the retirement years, similar to the tax-deferred retirement accounts that millions of Americans already manage for themselves. People would use these accounts in retirement to pay routine medical bills as well as premiums on catastrophic illness insurance.
Maintain a free market that will respond to individual consumer choices by minimizing regulations on doctors, insurance companies and drug companies.

Arguments for:

This approach emphasizes personal responsibility and limited government, basic values America has embraced throughout its history.
Under this system, individuals who pay for their own health care have an incentive to shop around, which will cut costs.

Arguments against:

Ensuring that elderly persons get good health care is a public responsibility and an expression of our shared concern for older Americans, which is why Medicare and Social Security are two of the most popular and important government programs in our history.
Under a self-financed system, lower-income retirees would suffer disproportionately, as would those who plan poorly or simply have bad luck.

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