Happy 50th birthday, Medicare! In just 15 years, you'll qualify for federally funded health insurance. Well, maybe. The fiscal situation of said program is growing increasingly precarious, so don't hold your breath.
On this occasion, one is reminded of a quip so often found in birthday cards: Growing old is mandatory. Growing up is optional.
This may seem like a passing wisecrack, but there's a deep truth lurking beneath the humor. And it applies precisely to Medicare: the program has grown old, and it's time it grows up.
If it doesn't, it will crumble under impossible fiscal pressures. And will be a barrier to national economic growth along the way. In a sense, Medicare at 50 does deliver healthcare to lots of Americans who need it; and, also to many who don't.
So it's time to confront 21st century facts. On Medicare's 50th birthday, let's have a look at how things have changed - and why it's time to adapt.
We are getting older. The American population is aging: lives are extending, birthrates are falling, the 77 million Baby Boomers are passing into retirement - and beginning to qualify for Medicare. And the weight of the population that will qualify for Medicare coverage towers over what it was in 1965.
When Medicare was passed back in the sixties -- and when it could be fiscally solvent -- it was designed to provide coverage to the over-65 demographic, which added up to 9.5% of the overall population, or roughly 19 million beneficiaries. Now, Medicare is still covering those over-65, but this age group has shot up to 14.8 percent of the overall population, which now adds up to 52 million beneficiaries. In the decade ahead, these numbers will skew completely out of whack as it has gone from 0.6 percent of GDP back in 1967 to today's 4 percentof GDP. But this is just the beginning of the untenable spiral as a consequence of longevity.
Are there solutions, other than scrapping it? Maybe.
One idea is to apply the original math to today's demographics. Providing coverage to the oldest 9.5 percent of the population as it did when created, would mean eligibility based on age alone would kick-in today at 68 today - and then jump to 77 in 2020, when we start to get in real trouble. So, simply changing the age for eligibility ought to be obvious.
But, what if we further amended it to align with the wealth creation the last 50 years has brought - the Warren Buffets, Donald Trumps, Hillary Clintons and tens of millions of others who, thank you, can take care of themselves would also not be eligible. Solutions, then are both to raise the eligibility age to something akin to today's demographic realities where we are living into our nineties and in parallel make it "needs-based". Of course, on the needs-based, we already have Medicaid, which helps seniors in need. So if you're puzzled, well, don't be, this is logic inside the beltway style.
By the way, since there are already millions of us in the over-65 population who are or want to keep working, employers will continue to play a role in health insurance as well. The 21st century changes taking place in the marketplace on retirement, work, and savings ought certainly play a role in our decisions about federally-funded programs created 50 years ago.
A lot else has changed in these 50 years with direct bearing on what we as a nation do about Medicare.
Medical innovation is unbound. The healthcare we enjoy today were science fiction when Medicare was formed. We can now treat and cure diseases that were certain death sentences a half-century ago. Of all the progress over the past fifty years, medicine surely sits at the top of the list.
Yet it has become common refrain to blame pharmaceutical companies for charging too much for medicines. This blame-game misses what's really at issue.
Because we have these breakthrough medicines, devices and procedures, we are living longer. And because we are living longer, we are requiring more medicines and procedures.
But that's not all. Given the new availability of these innovations, the demand for them is going up. So to blame the innovators is to take a bizarre aim at precisely those who have been the creators of our "longevity miracle." In effect, we are creating demand by inventing and innovating the supply side.
And that's a tremendous place to be. It's the engine of healthy and active aging. But it also means that the actuarial tables we had in 1965 are obsolete. And if programs continue to be based on them, they quickly become obsolete also.
We're aging at home. Though we don't often think of home-care as a space of innovation, it is. With the 80+ demographic growing faster than any other, we are creating new ways to provide care at home and give people greater and more durable choice and independence. This is a social and human triumph that translates to huge economic value.
It's time for Medicare to get on board. If Medicare can learn from innovative home care, then the exorbitant costs of institutional care can drop - and older persons and their families will get the satisfaction and security that Medicare originally set out to provide.
It is admittedly a deeply complex intersection of policies and programs, but if we can find a way for Medicare to allow for innovation in the home-care space, one of the major drains on Medicare expenditure can be plugged. And it's sustainability - and ability to meet its mission - might be re-invigorated.
Well, Medicare, enjoy this milestone birthday. But if you don't grow up you will go down and take us with you.
Earlier on Huff/Post50:
