Some economists and policymakers have argued that one way to control federal government spending on Medicare is to have a board of experts decide whether new medical technologies are worth their higher costs. If the board decides that they are not worth the costs, Medicare would not pay for them. Other economists and policymakers argue that the costs to beneficiaries should more closely represent the costs of providing medical services. This result might be attained by raising premiums, deductibles, and co-payments or by "means testing," which would limit the Medicare benefits high-income individuals receive. Political columnist David Brooks has summarized these two ways to restrain the growth of spending on Medicare: "From the top, a body of experts can be empowered to make rationing decisions. . . . Alternatively, at the bottom, costs can be shifted to beneficiaries with premium supports to help them handle the burden."
a. What are "rationing decisions"? How would these decisions restrain the growth of Medicare spending?
b. How would shifting the costs of Medicare to beneficiaries restrain the growth of Medicare spending? What does Brooks mean by "premium supports"?
c. Should Congress and the president be concerned about the growth of Medicare spending? If so, which of these approaches should they adopt, or is there a third approach that might be better?
(Note: This last question is normative and has no definitive answer. It is intended to lead you to consider possible approaches to the Medicare program.)
Source: David Brooks, "The Missing Fifth," New York Times, May 9, 2011.