During a panel discussion a few years ago in which I was the token advocate for individual (privatized) retirement accounts, a skeptic in the audience asked why I was talking about Social Security at all, insofar as Medicare threatened to be a much larger financial problem over the coming half-century.  "Because Social Security is what organizers of the meeting asked me to talk about," was my unassailable answer.  But putting aside the strong likelihood that the chap in the audience jabbed as he did because he didn't like the free market things I was saying, his point was sound. 

Getting Social Security's numbers to work upon the retirement of 77 million baby boomers will be tough.  Getting Medicare's numbers to jibe will be gargantuan.

Exactly how big are all these respective problems?  I've seen projections for Social Security's unfunded liability in the vicinity of $11 trillion.  I've seen projections for Medicare more than five times larger.  For perspective, we're currently spending a comparatively chintzy $2 trillion annually for American health care in toto, never mind mainly on seniors.

So what exactly might we try?  One Medicare possibility to which Americans have never resonated would be to means-test it -- or more precisely, to means-test it much more seriously than is currently the case.  People earning larger incomes do, in fact, currently contribute more in Medicare taxes than do people earning smaller incomes.  Also, wealthy senior citizens already pay more for Part D prescription drug coverage than do poor senior citizens.  But save for these two ways in which people of different means shell out different amounts of money (plus a relatively new provision that calls for a comparatively small group of well-to-do older men and women to pay higher premiums for Part B coverage), it's accurate to say Medicare remains fundamentally an entitlement.  This means recipients, regardless of their economic fortune or lack thereof, avail themselves of the program more or less equally, as all folks need to do is make it to 65 and they're covered.  (Part B, by the way, essentially covers physician fees.) 

For the sake of argument, let's say everybody in the United States with a laptop wakes up tomorrow morning, and in patriotic recognition that something big and painful must be done to save the system, e-mails everyone they can think of in Washington, urging them to tie Medicare services to personal and familial wealth more than is currently the case.  How much sacrifice of this sort might you suppose would be necessary to make a consequential dent in the problem?

Here's where the numbers get really scary.

John Goodman is president of the Dallas-based National Center for Policy Analysis and one of the country's best health care economists.  In an essay written for a recent American Experiment symposium on Medicare, he poses a means-testing plan in which subsidies are reduced on a sliding scale above the poverty line, "so that at the maximum Social Security wage level of about $90,000 annually, seniors would pay 80 percent of the full cost of Medicare."  This would mean, he calculates, "better-off men and women would pay $8,000 a year in premiums for a Medicare plan worth only $10,000."  Yet even when taken to such an extreme -- a plan he correctly describes as "far too aggressive ever to pass Congress" -- Goodman figures that Medicare's 75-year unfunded liability would fall by only 20 percent.  This is simply stunning, though not in a dazzling way. 

Dr. Goodman is one of 28 writers to contribute to the recently released symposium in which most suggested reforms stress choice, competition, transparency, and other components of what's increasingly described and understood as consumer-directed or consumer-driven health care.  For instance, Grover Norquist, president of the Washington-based Americans for Tax Reform, argues that "we must reform/replace Medicare in the same way as Social Security," as it "must move from a government program to a compulsory savings program for health care in old age."  Doing so, he writes, likely would entail allowing young Americans to invest their Medicare taxes in Health Savings Accounts "that would grow to the point where at age 65 they could buy insurance for the rest of their lives."

Rather than blueprints to be followed, many other writers focus on principles to be pursued.  A sizable number of contributors, for instance, emphasize how reforms, whatever shape they may take, must be fair to younger workers.  Steve Sviggum, who served as Speaker of the Minnesota House of Representatives from 1999 to 2006, urges that "we must not forget the kids and the grandkids as we care for grandpa and grandma."  But he also then asks:  "If grandpa has the personal wealth and income to be self-sufficient, why is it our taxpayers' responsibility to pick up the tab?"   And it's tough to argue with the title of a piece by Michael Cannon of the Cato Institute in Washington:  "Bill Gates Doesn't Need Any Help from Younger Workers."

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There's much more to say about the 28 essays, especially about their frequent focus on generational equity.  Also interesting and important is the fact that no consensus whatsoever emerges in regards to the symposium's core question:  Should Medicare be Means-Tested?  Views are vividly mixed, and not just between right and left, as conservatives themselves are decidedly split on the issue.  I'll return to these and other points in future columns on the anthology.  To link to the full symposium, go to: http://www.americanexperiment.org/uploaded/files/should_medicare_be_meanstested.pdf, or the Center's web site at www.americanexperiment.org.