NCPA - National Center for Policy Analysis

Proposed Changes to Medicare and Medicaid are Sweeping

February 24, 2003

The magnitude of President Bush's proposals to reinvent Medicare and Medicaid is only gradually dawning on Congress and medical policy experts, observers say. What he is seeking is nothing less than a complete overhaul and redirection of the two programs created 38 years ago.

  • States would have far more power to determine who receives what benefits in the Medicaid program -- which covers 45 million low income Americans.
  • The elderly would rely more on private health plans, and less on the government, for their health benefits under Medicare -- which covers 45 million elderly and disabled people.
  • The administration's vision for Medicare and Social Security moves away from the notion that everyone should be in the same government-managed system with the same benefits.
  • It promises individuals more choices -- including the option of picking a private health plan or investing some of their Social Security taxes in the stock market.

Medicaid, Medicare and Social Security accounted for 42 percent of all federal spending last year -- and that is expected to grow.

Administration officials and their allies in Congress -- including some centrist Democrats -- say such changes are essential to modernize creaky government programs and to stem the growth in entitlement spending.

Although nearly all participants in the debate recognize that change is needed in order to prepare for the retirement of the baby-boom generation, many Democrats still adhere to -- and are expected to fight for -- these programs which date back to President Lyndon Johnson's Great Society era.

Source: Robin Toner and Robert Pear, "Bush Proposes Major Changes in Health Plans," New York Times, February 24, 2003.


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