The economist blog raised this issue of how to pay for the upcoming massive deficit for social security sand medicare.
Here are some ideas:
1. Raise the age at which people can get benefits for social security and medicare. Given that people live longer they are going to have to work for longer. I would propose raising it immediately to age 70 and then indexing it life expectancy. Put it at 0.9 of life expectancy - that way you would always have a reasonable number of people paying into the system relative to those receiving benefits.
2. Abolish the Social Security Wage Base - currently set at $106,800. Right now you pay 6.20% up to $106,800 - so the marginal rate goes down when you earn above that figure. That is bizarre and unconscionable - it needs to be instantly changed so that the tax is applied to all income.
3. Reduce heavy duty health spending on those over age 80 or 1.03 times life expectancy. Look, we don't 'mind' if a 10 year old kid dies because of lack of insurance, but we are willing to spend $500,000 on a double bypass for an 80 year old. Once your 80 years old - you've had 80 years of life - now its time to let someone else have health care resources. Cap medicare spending on those over 80 at $50,000 a year and index that amount to GDP per capita.
4. Provide automatic medicaid for all uninsured up to age 25 (providing health care early in life helps in ensure better health and lower costs later in life + the young are the least able to get it independently.)
5. Apply a medicaid tax on all employers who don't provide health insurance and apply it proportionately to part time work. - 10% of payroll. (Yes I know there is something like this in the works but it doesn't do enough. This tax is above and beyond it)
5. Negotiate severely discounted prices for drugs for medicaid - similar to prices paid in the EU.
Until health care costs in general are dealt with (that would require a whole separate post) you cannot truly solve the whole problem but applying the solutions above would completely eliminate the fiscal deficit.
