The Diagnosis and Treatment of Medicare

By Andrew J. Rettenmaier and Thomas R. Saving

The Diagnosis and Treatment of Medicare argues that Medicare is in critical condition. Spending has risen dramatically since the program's inception, growing from about $200 billion to $450 billion over the last decade. Expenditures have consistently grown at twice the rate of inflation, and at times much faster, outstripping economic growth and absorbing a growing share of federal revenue. The situation will only worsen in the coming decades. As the Baby Boom generation reaches 65, Medicare's demands on federal revenues will climb even more sharply. Left unchecked, Medicare spending threatens to crowd out federal funding for education, energy, the environment, defense, and other important policy priorities. Economists Andrew J. Rettenmaier and Thomas R. Saving offer an innovative remedy to Medicare's woes. The Diagnosis and Treatment of Medicare calls for a rethinking of Medicare's financing, its benefit structure and its future. They dissect the existing Medicare program, evaluate a series of previously suggested remedies, and put forward their own "prepayment" solution.

• Format: Paperback
• Language: English
• ISBN: 0844742511
• ISBN13: 9780844742519
• Release Date: March 2007
• Publisher: AEI Press
• Length: 179 Pages
• Weight: 0.84 lbs.
• Dimensions: 0.6" x 6.6" x 8.9"

Customer Reviews

A desperately needed, scholarly and practical analysis

Written by Andrew J. Rettenmaier (executive director of the Private Enterprise Research Center, Texas A & M University) and Thomas R. Saving (professor of economics, Texas A & M University), The Diagnosis & Treatment of Medicare is a timely scrutiny of the woes of Medicare, which has seen its expenses balloon from, $200 billion to, $450 billion over the past decade. As the Baby Boom generation approaches 65, Medicare's demands on the Federal Reserve climb, and threaten to overshadow other policy priorities. The Diagnosis & Treatment of Medicare is more than a catalogue of Medicare's woes; it proposes workable solutions, and offers meticulous ratings and scorings of different reform ideas from controlling first-dollar coverage to means-tested Medicare and more. Of especial interest is the idea of making a transition to prepaid retirement health insurance and how such a move can be accomplished. A desperately needed, scholarly and practical analysis of a looming governmental problem in dire need of solutions

We need to take this problem seriously now and not leave it for the future to solve

When you hear any statement prefaced by one of these three phrases you can be almost certain that something stupid is about to be said: "If we can put a man on the moon", or "We need a new Manhattan Project to", or, the most expensive of all stupidities, "We are the richest nation on earth (or richest in history) surely we can afford to". The claim is that if we have accomplished seemingly impossible things then all things must surely be possible. While this may be true on science fiction shows or in political speeches, it is sadly untrue in reality. For example, the moonshot and the atomic bomb were more or less engineering problems. The science was defined enough to understand what needed to be done. Yes, many new things had to be created, but they were new applications of known principles. Look at how little has come from the billions spent purusing fusion. And while the war on cancer has led to better and more efficacious treatment, the early hubris has been exposed and many millions continue to suffer with all kinds of cancer. The last claim, that the richest country can afford anything, is ridiculous on its face. Obviously, the richest country can be laid waste or we would still have Rome or the British Empire, or the Mongol Empire. Things can go wrong in a hurry when the adults stop running things and we pass off serious responsibilities to the irresponsible. This is what we are facing with Social Security and even more with Medicare. This excellent book provides a clear picture of what we are facing as a nation in meeting our present and unfounded commitments for these programs as the baby boomers retire and beyond. They simply cannot continue as they are and as the wonderful economist Herb Stein noted, "If something cannot continue it will stop." Rettenmaier and Saving help us see the reality of the problems Medicare is facing over the coming decades. If you respond by saying, "Oh, well, I will be dead long before the crisis hits." Or, "I will be out of office before the crisis hits." Or, "This is a publication from the American Enterprise Institute so it is just a bunch of Republican lies." If you think anything even like these statements, you are not being serious. We all must get serious about this coming crisis. Our choices will be to raise taxes to an absurd level to keep the current intergenerational funding going, use up an absurd amount of the "discretionary" funds of the federal trough, or to cut back on benefits (which, of course, can not actually happen outside of a financial collapse of our nation). The authors take us through several proposed changes in the way Medicare is funded. First, they look at what happens if the elderly are made to pay the shortfalls, then they examine four proposed reforms: the Medicare Commission proposed reform, Fixing Technology At Retirement, Controlling First Dollar Coverage, and Means Tested Medicare. They then propose something they think will work. Their system is base