In 2030, as 77 million baby boomers hobble into old age, walkers will outnumber strollers; there will be twice as many retirees as there are today but only 18 percent more workers. How will America handle this demographic overload? How will Social Security and Medicare function with fewer working taxpayers to support these programs?
Going Critical that much fun to consume. A good example here is bypass surgery. If you had clogged arteries in the 1970s, you might have opted for a rather invasive operation in which a surgeon would cut out a vein from your leg, then cut open your chest, then cut out your artery, and then try to keep you alive while replacing your damaged artery with your vein. Lots of potential bypass customers thought about it for all of two seconds and decided to take a pass, even though they could get the operation for free. This meant that Medicare paid for a relatively small number of very expensive operations.
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Today, things have changed. The surgeons have developed angioplasty, in which a small incision is made in your groin. Then your clogged artery is gently threaded and expanded with a balloon. Goodbye heart clog, goodbye pain. The good news is that angioplasty costs a lot less than a bypass operation. The bad news is that having angioplasty is tons more fun than having a bypass. Its so much fun that anyone with even mildly clogged arteries is signing up for the experience. Consequently, Medicare is spending more of our money cleaning oldsters pipes than ever before. Medicaid is the other major entitlement program whose real benets could potentially be eroded by ination. Unlike Medicare recipients, young and middle-aged Medicaid beneciaries are poorindeed, very poor. Consequently, they have no money to spend on Washington lobbyists. Older Medicaid beneciaries are also very poor and live, for the most part, in nursing homes. They too are in no position to start complaining about the qu
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Given this, one might presume that Medicaid spending hasnt kept up with economic growth. Nothing could be further from the truth. Over the years, Medicaid spending has grown as fast asindeed, somewhat faster thanMedicare spending. This growth has occurred under Republican and Democratic administrations alike, but, interestingly enough, the fastest growth has occurred under Republican administrations. Today, believe it or not, total Medicaid expenditures exceed total Medicare spending.
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The explanation for Medicaid growth appears to be the same as that for Medicare growth. Both programs provide their benets in kind as opposed to in cash. Theres also no straightforward way to limit how much of this free, or nearly free, health care is demanded by program recipients and therefore provided by the all-too-eager-to-comply health care sector. 131 132
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