The NYT gives the incorrect impression that Medicare’s designated funds will be used to pay for President Obama’s health care reform. An article discussing the attitude of the elderly toward reform reports:
“Knowing that Medicare itself faces a financial crisis, many older Americans object to Congress’s tapping the program to help pay for coverage of the uninsured. They say they do not believe that all the Medicare savings will come from eliminating waste and inefficiency, as Mr. Obama says.
‘Medicare is nearly broke,’ said James P. Ivey, 66, of Deer Park, Wis. Mr. Ivey predicted its financial problems would grow as the ratio of beneficiaries to workers increased in coming years.”
While Medicare’s trust fund is projected to go into a deficit by 2017, there is no proposal that would take money from this trust fund to pay for health care reform. President Obama does propose to reduce overall Medicare spending as a way to offset the cost of extending coverage, but this will in no way worsen the finances of Medicare’s trust fund. In fact, by slowing the growth of Medicare expenditures, it should improve the finances of Medicare’s trust fund.
–Dean Baker
