Monday, July 21, 2008

Means Testing Medicare

Tyler Cowen is my favorite conservative. Sometimes I actually agree with -- not very much, but sometimes I do. Today in his New York Times article he advocates means testing for Medicare. He acknowledges the possibility that means testing will make Medicare a welfare program, causing it to lose support -- but he suggests that things are so dire we do not have another choice he does not seem to take seriously Mark Thoma's suggestion that single-payer could create substantial cost savings.

I am not sure how big a threat Medicare really is. Any sane political system would find massive savings in the defense budget, but sanity is a scarce commodity. Taxes on the very rich and taxes on purely speculative activities could go a long way to supplement Medicare. Unfortunately, such policies will not be discussed outside of third-party politics.

8 comments:

rosserjb@jmu.edu said...

Somehow in Germany they have everybody covered for health care, they have a very generous social security system, they have the population ratios by age the US will have only some decades from now, but at the same time they are net creditors internationally with their national debt now viewed as safer than the US national debt. How did we get to this?

Shag from Brookline said...

"Means testing" can turn into "mean testing."

Bruce Webb said...

"He acknowledges the possibility that means testing will make Medicare a welfare program, causing it to lose support"

Change "acknowledges" to "relishes" and I suspect you would get closer to Cowan's true position.

Means testing popped up as a troll talking point on Angry Bear a couple of weeks ago (that time in relation to Social Security, and by two different trolls), then I saw a link to a column reacting to a letter to the editor on the same topic, which led me to post on "Means Testing as a Trojan Horse" on AB last Mon (the 14th), And now Cowan.

I don't know exactly how the mechanism for sending out Right Talking Points works, it may be as simple as an e-mail from Norquist to Limbaugh but you can recognize it when you see it.

Medicare Part A is financed by a payroll tax with no income cap, meaning it has a big incidence on the upper middle class, particularly professionals. Parts B to D are financed mostly by income tax which falls largely on the upper middle class but also by premiums. And the Medicare Modernization Act of 2003 tripled premiums on recipients earning more than $80,000. It is not that I am really shedding tears for those of us who are fortunate enough to be Medicare eligible and still making $80k but these people have already been paying in a lot more than their share for Medicare all their working lives (well after 1983). Means testing them out of Medicare benefits is such an obviously cynical ploy to undercut support for this program from a very politically influential sector.

Cowan et ilk need to be beaten back and not just rhetorically: "fetch me a switch boy!".

rosserjb@jmu.edu said...

"Cowen" not "Cowan"
tsk

Eric said...

If means testing is "such an obviously cynical ploy to undercut support for this program from a very politically influential sector"...

isn't NOT means testing just a cynical ploy to maintain support for this program from a very politically influential sector?

Robert D Feinman said...

There are parallel discussions on Mark Thoma's and Paul Krugman's blogs.

Unless you are interested in attracting your own home-grown trolls here, I suggest putting in your two cents in one of the other sites, pretty much all the points have been covered.

BillCinSD said...

That may be true, Robert, but not everyone that reads EconoSpeak reads Thoma or Krugman regularly. ie I don't read those blogs, although it is good to know where more discussion is occurring.

Jack said...

Bruce,
Thanks for the post. Even my wife, who is a dyed in the wool populist, read Cowan's solumn and thought there was some sense to the column. It's what I would call common nonsense.