In 1960, the Kerr-Mills Act created the Medical Assistance for the Aged (MAA) program which gave states the power to decide which patients needed financial assistance. The federal government would provide matching funds to the states for the program. Some states did not participate or abide by the Act.

Hoping to create a universal health benefit for senior citizens, and a state-matched benefit for those near or below the poverty level, President Johnson signed into law the Social Security Act of 1965, the two primary components of which were Medicaid and Medicare.

What the social engineers in congress hadn’t thought out was how to make the system self-sufficient and how to manage the costs to both the federal and state governments.  Amidst the baby-boom, the federal government hadn’t considered what happened if there wasn’t a second baby-boom to cover the costs of an aging population, which is fact what happened.  It also didn’t consider the effect of medical improvements extending the lifespan and the Medicare collection years nor the explosion in health care costs as a result of aging population and the growth of medical technology.

The family dynamic changed drastically as the baby boomers became adults and an ever-growing female workforce lead to smaller family sizes.  Many families either choose not to have children or delayed marriage and therefore had fewer children.  The post baby-boom generations became smaller and the number of young adults entering the workforce shrunk dramatically.

When Medicare was enacted there were nearly 9 workers for every Medicare beneficiary.  That number started to shrink almost immediately to the point we find ourselves today with approximately 4.3 workers per Medicare enrollee.  By the time all baby boomers have entered the system in 2030 it will be less than 2.3 contributors per beneficiary.  Currently Medicare and Medicaid account for 23% of federal spending which exceeds any other single entity.  All of defense spending only accounts for 20%, discretionary spending (what the supposed cuts we heard about this past March were based on) only accounts for 19% and even Social Security lags behind Medicare by more than $90 billion dollars annually.

U_S__Federal_Spending_-_FY_2007
The government has tinkered with Medicare numerous times since its enactment, though primarily to create new benefits or fine tune existing ones.  Unlike Social Security, nothing has been done deal with the fact at the time of inception Medicare had 19 million enrollees and as of 2009 that number had ballooned to 46 million.

So what does all this mean without all the government facts and figures?  Simply put Medicare cannot continue as it currently stands.  If there is to be a Medicare for the generations that follow the baby boomers something has got to give.  As long as the public allows legislators to use Medicare, Medicaid and Social Security as political footballs we won’t address the basic fact that we simply do not have enough contributors for those that consume benefits.  Even if we found a way to freeze the growth of medical costs 2.3 workers simply cannot carry the cost of each beneficiary.

Perhaps I simplify because I am a simple man.  I know that the government is the worst administrator of any program, health insurance being no different.  This is demonstrated annually as government figures show that Medicaid and Medicare are the most fraud burdened government programs.  Why not get government out of the administration of these programs?  Congressman Paul Ryan offered a solution to provide vouchers to those under the age of 55 to allow them to purchase insurance on the open market.  Immediately calls of “throwing Grandma off the cliff,” started to show up on the television including a faceless person, clearly representing Ryan,  shown wheeling Grandma to her demise.

I have no problem with someone disagreeing with Ryan’s plan, or anyone else’s plan, if you’re willing to offer an alternative.  Burying your head in the sand while tossing out “Mediscare” talking points does nothing to address the problem; but therein lies the rub.  Representative Ryan is the first person with the, pardon the term, cojones, to offer up a plan and providing a basis to debate and formulate a solution.  Nothing can happen as long as the liberals response is to demagogue the issue rather than being adults and facing the issue head-on.  Personally I do not like Paul Ryan’s program but I give him kudos for having the courage to lead.  I’d rather see the enter trust fund turned over to a commercially administered health insurance advocacy organization – I just believe some things are better done in the free market because efficiency and government are antithetical.  There are almost certainly some ideas to be found within the halls of congress that are kept hidden away so as to avoid giving political opponents a target to shoot at.  Paul Ryan is a hero for putting the public good above political benefit and for that we all owe him a debt of gratitude.

Grandma and Grandpa are fine.  No one on Medicare nor anyone that will become eligible over the next decade will see any change in the program.  It’s those of us under the age of 55 that need to demand this be fixed and fixed today or we’ll arrive at the Medicare sign-up desk and find no one home.  Democrats may like to scare Grandma and Grandpa, but those on Medicare should not allow the liberals to drive them away from demanding a solution be found today so that their kids and grandkids will have a program that meets their needs tomorrow.