The Debate Over Privatizing Medicare: Can Anyone Say $20.5 Trillion?

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Tuesday, 12 April 2011 04:27

The NYT has a front page story on the debate over Representative Ryan's plan to privatize Medicare. The article is entirely in the form of he said/she said, providing readers with absolutely no information that would allow them to assess the arguments over the plan. This is especially important since the article reports that changes like those in the Ryan plan are necessary to control costs.

The assessment from the non-partisan Congressional Budget Office (CBO) is that the Ryan plan raises, not lowers, the cost of insurance. The CBO assessment implies that the Ryan plan would raise the cost to the country of buying Medicare equivalent policies by $20.5 trillion over the next 75 years (Medicare's planning period). This amount is almost four times as large as the projected Social Security shortfall. It comes to more than $60,000 for every man, woman, and child in the country. While this extra cost would not be borne by the government under the Ryan plan, it implies an enormous burden on future generations of retirees who may have to spend more than half of their income on health care.