NCPA - National Center for Policy Analysis

The Age Of Entitlements Must End

August 20, 2010

If we really want to get our nation back on track, one of our top priorities must be to end the age of entitlements, says Conn Carroll, assistant director for the Heritage Foundation's Strategic Communications. 

The Heritage Foundation has several recommendations -- 

Put Medicare, Medicaid and Social Security on a budget: 

  • Congress should set firm and enforceable budget caps for Medicare, Medicaid and Social Security.
  • Put these programs on a firm, long-term budget -- say 30 years -- and require Congress to review these budgets regularly.
  • Triggers or other mechanisms should be deployed to enforce budget limits if Congress fails to act. 

Fix Medicare: 

  • Establish a new Medicare "defined contribution" system as we transition away from today's costly and inefficient fee-for-service system.
  • New retirees, just like federal workers, would receive a government contribution to purchase the health insurance that best meets their needs.
  • The contribution, or "premium assistance," would be capped but reviewed periodically and an individual's contribution would be adjusted according to income and underlying medical condition. 

Fix Medicaid: 

  • Healthier families should be allowed into private health insurance with their share of Medicaid money.
  • We need patient-centered care to give the disabled, elderly, and their families a say in the care and services they receive.
  • Medicaid's long-term care benefit must be transformed from an open-ended entitlement to an insurance-based model of private coverage as part of a general strategy to boost long-term care insurance. 

Fix Social Security: 

  • To boost savings, we need to include a system of voluntary personal accounts within Social Security.
  • The system as a whole should be made solvent by transforming the remainder of Social Security to "real insurance," focusing benefits on those who really need them during retirement while strengthening the safety net for poorer retirees.
  • Incentives such as removing payroll taxes for workers over the retirement age should accompany these changes. 

Ending America's entitlement mentality is not just an economic challenge, but a moral one.  It is simply wrong to make unsustainable promises to today's adults by shackling our children and grandchildren with crippling debt or heavy taxes, says Carroll. 

Source: Conn Carroll, "The Age of Entitlements Must End," Heritage Foundation, August 19, 2010. 

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