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December 05, 2012 12:50 PM This Is Not Entitlement Reform

By Austin Frakt

When “entitlement reform” comes up these days, just about the only thing I hear mentioned is raising the age of Medicare eligibility. I could offer up another link rant on this, but it’d be a waste of time. Aaron’s done it. Or see the FAQ.

Look, this is not “entitlement reform” any more than political football is an “adult conversation.” To me, “entitlement reform” implies something substantial, something that addresses the problems of an entitlement so thoroughly that it removes the issue from the debate for many years. “Entitlement reform” actually addresses something that needs fixing in a way that actually contributes toward fixing it.

Raising the Medicare age by two years, gradually over time, will not do that. As we’ve discussed, the savings are too small. As we’ve described, it raises other problems. As is clear, it’s controversial. Nobody serious will claim it fixes Medicare. Of course it does nothing for the broader health system. At best it’s a tweak. Yet some speak of it as if it is the most important thing we can do on entitlements today. Really, it is not.

Moreover, it does nothing, absolutely nothing, to increase the efficiency of Medicare or the health system. Contrary to conventional wisdom and all the political hyperventilating, the real problems of the health system are not its cost to the federal government, but the degree of inefficiency of our spending on it, public and private. Shifting spending from one sector (public) to another (private) and piling additional spending on top of that — which is what raising the Medicare age would do — is orthogonal to efficiency enhancement. It has nothing whatsoever to do with it.

Thus, it is not only small potatoes, it is huge distraction. It is not entitlement reform. In time, this will be proven. Mark my words, in no more than one year after a law is passed to raise the Medicare age, Medicare will be back in the spotlight. The words “entitlement reform” will be uttered again, and very soon. Will anyone mean it?

[Cross-posted at The Incidental Economist]

Austin Frakt is a health economist and an assistant professor at Boston University's School of Medicine and School of Public Health. He blogs at The Incidental Economist.
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Comments

  • paul on December 05, 2012 9:08 PM:

    It's been a long long time since "reform" meant anything in DC other than "screwing up a mostly-working system to extract more money from ordinary people." Social-security "reform", bankruptcy "reform", the financial "reform" that repealed Glass-Steagall. It's more like the way a car is reformed when someone crashes it into a bridge abutment.