NCPA - National Center for Policy Analysis

Medicare and Medicaid at 50

September 25, 2015

The federal Medicare and Medicaid programs turn 50 years old this year. They have become two of the largest health insurance plans in the country and account for an ever-increasing share of federal and state taxpayer dollars.

Today, almost 30 percent of Americans are enrolled in these two programs. In the state of Washington, some 1.13 million people are in Medicare and 1.8 million are in Medicaid. This means over 40 percent of the state's population has health insurance paid for by taxpayers.

If Medicare is to continue in its present form, one or more of the following three things must happen:

    • Benefits will need to be decreased;
    • Payroll taxes will need to be increased, or;
    • Seniors will need to pay more out of pocket.
    • A fourth option, of course, would be to use general taxes to cover more of Medicare deficits.

The Medicaid entitlement has resulted in several harmful consequences. First, it discourages work and job improvement for low-paid employees, since with increasing income workers lose their Medicaid benefits. It also encourages low-wage paying employers to not offer health benefits. The real tragedy for people in Medicaid is the program provides no better medical outcomes than having no insurance.

More government intervention can control costs, but only by rationing health care services people may receive. To increase choice, maintain or improve quality and control costs, seniors and low-income patients must be allowed to control their own health care dollars and make their own health care decisions. This patient-centered approach is the only practical and moral way to make the Medicaid and Medicare programs financially viable over the long term.

Source: Roger Stark, MD, "Medicare and Medicaid at Fifty," Washington Policy Center, September 2015.


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