Admit it: Medicare changes are coming

A large part of the public and at least one of the political parties believes there is still a debate about keeping Medicare as it is or replacing it with some other program. That debate is long over and Medicare will change regardless of what any politician, including the president, says. In fact, President Obama and the Democratic Party started the process with the passage of Obamacare.

First, Obamacare already includes a $500 billion cut in Medicare spending to finance universal coverage for the uninsured who can’t pay for it. How do you take half a trillion dollars out of Medicare spending without changing something?

Second, the aging baby boomers will soon overwhelm Medicare. This generation has plowed through many established conventions by their force of sheer numbers. In the 1950s they had to attend elementary school in two shifts to accommodate the overwhelmed public school system. Is Medicare any better prepared than the public school system was 60 years ago. It doesn’t appear to be.

Third, the other arithmetic to impact Medicare is the yearly (compound) growth rate in medical costs. The long term growth rate of 5.9 percent for medical cost increases is multiplied times the total cost of Medicare each year after adding in the yearly increase in new eligible baby boomers. Repeat the calculation for the next 18 years and look at the results. As financial planners used to say, it’s the “magic of compound interest.”

Now, look in the mirror and say to yourself, “We don’t need to change Medicare and we certainly don’t need to replace it with some other approach!” If you can do that with a straight face, the Democratic Party needs you to explain to the voters how they will protect Medicare from any changes.

Richard Gylling

Palatine