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COPYRIGHT 2004 Thomson Financial Inc.
This is the second part of a Perspectives series on Medicare and the nation's fiscal future. The first part was published July 5.
If you think that Medicare can persist over the long haul without significant tax increases, benefit redesign, and greater cost sharing for higher-income beneficiaries, not to mention stark changes in the way health-care technology is allowed to develop in the United States, think again.
That was the message delivered by conservative scholar Daniel Shaviro of New York University at an American Enterprise Institute forum June 28. And, despite some specific disagreements, much of Shaviro's thesis was seconded by a panel of more left-leaning economists assembled to discuss the relationship between Medicare and the nation's fiscal future.
* Raise taxes. To sustain Medicare for future generations, "we're going to have to raise taxes. Get over it," said Len Nichols of the Center for Studying Health System Change. "The point of Medicare reform is to minimize that."
Shaviro offered his ideas about just what taxes must be raised and also highlighted the political difficulties of doing so.
When both Part A and Part B are considered, income and payroll taxes are Medicare's main fiscal engines. And income and payroll taxes, "as the main instruments in the United States fiscal system for distributing burdens based on some measure of ability to pay, should play a major role in narrowing the fiscal gap," Shaviro said. But even though action is needed now, "any increase would be hard to enact in the near term and would risk being dissipated by a congenitally imprudent and undisciplined Congress," said the mince-no-words tax professor.
Shaviro said...
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