MediScare returns

But something has to change

Last Updated: 12:35 AM, August 15, 2012

Posted: 10:39 PM, August 14, 2012

Mitt Romney’s naming of Rep. Paul Ryan as his running mate has moved the debate over Medicare reform back to the political forefront. As everyone in range of a TV knows by now, Ryan is the author of the “Ryan budget” that “ends Medicare as we know it.”

According to New York Times columnist Paul Krugman, the plan “would kill people. No question.” Democratic consultant Paul Begala calls it “deeply evil.” Ryan’s plan, warns Obama’s campaign chairman, David Axlerod, would throw his 85-year-old, cancer-stricken father off Medicare.

If the Democrats are this hysterical already, what can we expect by Election Day? Ads showing Ryan throwing a wheelchair-bound grandmother off a cliff? Oh, wait . . .

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Ryan: Unlike President Obama, has ideas for saving Medicare from financial disaster.

But here’s a fact: No matter who wins this November, “Medicare as we know it” is doomed.

According to Medicare’s trustees, the program ran a combined deficit of more than $288 billion last year. Going forward, the most optimistic estimate puts Medicare’s future unfunded liabilities at more than $38.6 trillion. More realistic projections suggest the shortfall could actually top $90 trillion.

To put this in perspective, the total wealth of every American earning more than $1 million totals roughly $11 trillion. So we could confiscate every penny belonging to every millionaire and billionaire in America and still cover less than a third of Medicare’s red ink, even using the lowest estimate for its unfunded liabilities. There is no way to fix Medicare’s finances just by raising taxes on the rich.

Faced with this reality, Ryan has put forward a plan, co-sponsored by liberal Sen. Ron Wyden (D-Ore.), to restructure Medicare for today’s younger workers.

This is an important point. The Ryan plan wouldn’t make any changes to Medicare for anyone age 55 or older today. Given the perilous state of Medicare’s finances, it probably should include current seniors, but it doesn’t. No one on Medicare now gets thrown off the program, forced to pay more or has his benefits cut. Axlerod’s dad is safe.

Even those under age 55 would still have the option to stay in conventional Medicare if they wish. But the growth in spending under traditional Medicare would be capped at the growth in the economy plus 1 percent. This likely means a reduction in future benefits, but what those cuts would be aren’t specified.

For those who want another option, insurance companies would bid for the right to participate under Medicare. Plans would have to include certain minimum benefits and accept all applicants, regardless of age or current health.