Young voters in search of a reason to care about national politics were greeted last week with an eye-opening report on the fiscal health of the Medicare program. Trustees for the 40-year-old retiree health-insurance program warned that the trust fund covering hospital benefits will run dry in another 15 years. Unfortunately, the 20- and 30-somethings with the most to lose from a collapsing Medicare program have taken little interest in the looming crisis. That is too bad, because all young voters have a stake in making sure that the old-age programs they fund today will be around when they reach retirement.
This is not the first time the Medicare trustees have warned that the program is headed over a cliff. The insolvency prediction has become something of an annual rite in Washington. The trustees have warned of dire consequences every year since 1990, with the alarm bell tolling especially loudly in 1997. Then, the Clinton administration and Congress acted to restrain spending and temporarily avoid bankruptcy.
It is not likely to be that easy this time around. While Medicare projections – like all fiscal projections – are subject to much error, the Medicare crisis is real and quickly approaching. Recent Medicare costs have followed the steep trajectory of health-care spending in general, led by increases in prescription drug costs. The upward trend is unlikely to reverse course any time soon. The retirement of the baby boomers, longer life expectancies, increasingly expensive medical technologies and thinning employment ranks all loom over the demographic horizon.
There is no shortage of reform proposals. The John Kerry campaign has promised to restrain costs while protecting current benefits. While the devil is always in the details, Kerry at least recognizes that profligate spending and a stable Medicare program make a toxic combination. The Bush administration, however, seems blissfully unaware of the crisis. The president has responded to the Medicare challenge by rapidly expanding coverage to include prescription drugs and pushing reforms built around market competition and health savings accounts: All the more reason for young voters to follow this debate closely and head to the polls in November.