July 27, 2015
That’s the assertion at the end of Robert Samuelson’s piece on the 50th anniversary of the creation of Medicare and Medicaid. Samuelson tells readers:
“By 2030, the number of Medicare beneficiaries is projected to reach 81 million, an almost 50 percent increase from today. Meanwhile, higher health spending has squeezed other programs. That’s an ironic footnote for the triumph of ’65: By threatening the rest of government, the instruments of a liberal agenda — Medicare and Medicaid — have bred illiberal consequences.”
In fact, the federal government spends considerably more, as a share of GDP, on education than it did before Medicare and Medicaid were created. There have also been expansions of spending in other areas, most notably the insurance subsidies in the Affordable Care Act. It is not clear that we would be spending more money in other areas if we did not have Medicare and Medicaid. It is possible that the success of these programs make the public willing to support spending in other areas.
Addendum:
Robert’s comment reminds me of the obvious point that I should have included originally. Because seniors have most of their health care costs covered by Medicare, they have more money to pay for other things, like taxes for other government services. Samuelson is effectively arguing that if people had their taxes reduced by the amount they pay for Medicare and Medicaid, but had their health care costs increase by an even larger amount (Medicare is far more efficient than the private health care system) then they would be willing to pay more in taxes for other services. There is no reason to believe this is true.
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