Posts Tagged 'medicare'

Obamacare, Medicare, and Rationing

I am looking at a Heritage Foundation chart entitled “Entitlements Will Consume All Tax Revenues by 2052”.  It is, as one might expect from the Heritage Foundation, persuasive and thought-provoking.  It shows the extent to which entitlement growth (Social Security, Medicare, Medicaid) will engulf and devour all current revenues in 40 years. Persuasive.

But the chart shows something else that the Heritagers did not note.  Medicare, not Social Security or Medicaid, is the really exploding entitlement.

By my eyeballing of the chart, Social Security now consumes about 5% of GDP, and by 2052 it will rise to a bit over 6%.  Medicaid, currently under 2%, may rise to about 4%.

Compare those numbers to Medicare: currently at 3% of GDP, it will mushroom to 14% of GDP

In other words, Social Security cost will grow 20% faster than GDP;  Medicaid cost will grow 100% faster than GDP;  But Medicare will grow 366% FASTER THAN GDP!

Currently, Social Security costs as much as Medicaid plus Medicare.  In 40 years, Medicare will cost 40% MORE than Social Security PLUS Medicaid! 

The INCREASE in Medicare is more than the TOTAL current cost of the other two!

Since I’m running out of exclamation points, I’ll cut to the chase.  If Medicare costs are not controlled, the other two entitlements barely matter. 

All of which brings us to Obamacare.  The push for health care reform was driven by two things. The scandal of having a sizeable number of Americans uninsured was the primary rhetorical point. But the main driver was in fact the explosive cost of health care, translated for most people into the cost of health insurance.  For workers, the cost of health insurance has been the primary drag on wage growth for several decades.  For employers, it has hurt profits.  Unless costs are controlled, “fringe benefits” will overtake wages for most employees and employers. Continue reading ‘Obamacare, Medicare, and Rationing’

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