NCPA - National Center for Policy Analysis

Medicare's Disaster Course

January 21, 2003

Advocates of universal health care are at it again -- clamoring for a single-payer system similar to Canada's. But inevitably, that would lead to price controls as it did when Medicare targeted hospital changes in the 1980s and physicians' charges in the 1990s.

And that will be no panacea.

  • The hospital insurance program (Part A) of Medicare is expected to grow from 2.4 percent of gross domestic product in 2001 to 5 percent by 2035 and 8.6 percent by 2076 -- with Part A spending more than it takes in by 2015.
  • According to Medicare's trustees, to get the fund into balance over the next 75 years, "outlays would have to be reduced by 38 percent or income increased by 60 percent" -- or some combination of the two.
  • Payments to doctors under Part B are already suffering -- cut by 5.4 percent this year, with another 4.4 percent next year -- resulting in doctors dropping out of the program.

In fact, the Tufts Health Plan, Massachusetts' largest Medicare HMO, has seen a 40 percent drop in physicians since 1998.

If single-payer advocates have their way, experts warn, waiting lines and rationing will become the order of the day -- just as they now are in Canada.

Source: Merrill Matthews Jr. (Council for Affordable Health Insurance), "Medicare Shows Failings of Single-Payer Health System," Investor's Business Daily, January 20, 2003.


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