The Real Truth

The Medicare Trustees released their annual report on Tuesday, with newspaper headlines the next day giving a false sense that the program is financially secure. But it is secure only if you don’t care that Medicare’s tap on the trough of general revenues will turn into a geyser in future years.

Here’s the real danger – which you are unlikely to read in any of the newspaper reports:

According to Public Trustee Thomas R. Saving, Medicare will consume 21% of all federal income tax receipts in 2030 – in addition to the earmarked taxes and premiums already flowing into the program. And if you add in Social Security, the number jumps to one-third. That means one third of all federal income taxes – in addition to payroll taxes and premiums – will go just to fund two programs for the elderly three decades from now!

It is a fiction to believe that Medicare is solvent and that Congress can add a $350 to $750 billion prescription drug benefit that will balloon to trillions of dollars in additional spending over 75 years.

Medicare Part B, which pays for physician, home health, and other outpatient services, has an open call on the federal treasury, and can take as much money as it needs to pay its bills. So as long as the federal government doesn’t go bankrupt, Medicare won’t either. But the crowd-out of other federal programs will be shocking.

Saving was one of the panelists explaining the new Trustees’ report at an American Enterprise Institute forum on Wednesday, moderated by Resident Scholar Joe Antos.

Separately, Aventis Pasteur pharmaceuticals has found in its freezers 70 million to 90 million doses of smallpox vaccine, “instantly increasing the known U.S. inventory of the vaccine six-fold and ensuring the nation an adequate supply in the event of a bioterrorist attack,” the Washington Post reports. Aventis is negotiating to make the vaccine – made decades ago but apparently still potent – available to the federal government.

This is the perfect time for the Bush administration to reconsider its misguided strategy.

The administration’s current plan is to stockpile vaccine supplies until we are attacked. This is terribly dangerous. Imagine eight million people in New York City all trying to get to doctor’s offices and hospitals to get vaccinated for smallpox within the three-day window before the infection turns into disease.

Smallpox spreads easily through the air, and at least 30 percent of those exposed would be expected to die from the disease unless they are quickly inoculated.

Because the virus had been contained for more than two decades, children have not been routinely immunized since 1972. Even adults who were vaccinated as children now are being told that their immunity has largely worn off. All of us are vulnerable.

To avoid this certain catastrophe, everyone should be able to make his or her own choice about whether or not to be inoculated before any attack.

According to an Associated Press poll last fall, 61 percent of adults said they would voluntarily get vaccinated against smallpox if permitted.

But they don’t have that option because a vaccine is not available to the public.

A well-vaccinated population creates a community of immunity, protecting even those who are not themselves inoculated. Prevention is always the best treatment, including protection from a biological attack.

This new supply gives Washington an opportunity to rethink its policy and employ prevention as its first line of defense.

Here’s a link to a commentary article I wrote on this subject earlier this year –

Grace-Marie Turner


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