Catherine Rampell used her column today to defend an earlier column complaining that baby boomers are taking from young people through Social Security and Medicare. She acknowledges that most baby boomers will not come out ahead on Social Security (actually they come out somewhat behind in the source she cites) but then tells readers:
"Medicare, on the other hand, is pretty much a steal no matter when you turned 65."
This is true, but it's hard to argue that it is the beneficiaries who are doing the stealing. We pay more than twice as much per person on average for our health care as people in other wealthy countries. We have little or nothing to show for this extra spending in terms of outcomes. For example, every other wealthy country has longer life expectancies than we do. It therefore is hard to argue that seniors are the beneficiaries of the exorbitant spending on Medicare.
On the other hand, we know who does benefit. The Centers for Medicare and Medicaid Services released data this week showing that a small number of doctors account for a grossly disproportionate share of Medicare's payments to doctors, with many collecting more than $1 million a year from the system. The top earner, a big campaign contributor, pocketed more than $20 million in a single year.
Doctors in the United States earn more than twice as much on average as their counterparts in other wealthy countries. We also pay more than twice as much for our prescription drugs and for medical equipment. If one were to look for people stealing from Medicare, these and other health care providers would be the obvious candidates.
It is also worth noting that the well-being of people of Rampell's generation (her explicit concern in the piece) will depend far more on stopping and reversing the pattern of upward redistribution of income that we have been seeing since 1980. If this is not reversed then millennials will see little of the 50 percent growth in real compensation over the next three decades that is projected by the Social Security trustees. If millennials are able to secure wage gains that track the economy's productivity growth then their gains in compensation will be an order of magnitude larger than any possible tax increases associated with Social Security and Medicare.
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