NCPA - National Center for Policy Analysis


February 19, 2010

In the study "A Framework for Medicare Reform," John C. Goodman, President, CEO and the Kellye Wright Fellow for the National Center for Policy Analysis outlined a way to convert Medicare into a private, prefinanced system that by midcentury will require no higher payroll tax than the one we have today.  (The simulations were by Thomas Saving, a former Medicare trustee, and his colleagues.) 

There are no benefit cuts in this proposal.  There are demand-side and supply-side reforms that slow the rate of growth of costs, however, says Goodman: 

  • In the meantime, we should not make our entitlement spending crisis even worse by creating new unfinanced liabilities for young people -- which is what Obamacare would do.
  • Taking the proposed Medicare cuts off the table, says Goodman, would completely end that threat. 

According to Newt Gingrich, a former speaker of the House and founder of the Center for Health Transformation, both he and Goodman said that cutting $500 billion from Medicare is wrong, which New York Times op-ed columnist Paul Krugman castigates as hypocritical in a recent column. 

Krugman's argument would crumble if he had included the full quote, says Gingrich: "There is no question that Medicare is on an unsustainable course; the government has promised far more than it can deliver.  But this problem will not be solved by cutting Medicare in order to create new unfunded liabilities for young people." 

According to Gingrich: 

  • We should be 100 percent committed to fundamentally improve Medicare with health information technology, paying doctors for delivering quality care and eliminating waste and fraud. These will undoubtedly lead to savings and make Medicare solvent.
  • We should be 100 percent opposed to robbing the elderly through draconian cuts to enhanced benefits, doctors, hospitals and nursing facilities, which will merely be redistributed to younger Americans for a new health care entitlement.  

Source: John C. Goodman and Newt Gingrich, "Ideas About the Medicare of the Future," New York Times, February 18, 2010; John C. Goodman, "A Framework for Medicare Reform," Study No. 315, September 12, 2010; and Paul Krugman, "Republicans and Medicare," New York Times, February 12, 2010. 

For text:  

For NCPA study:  

For Krugman text: 


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