Reforming Medicare--toward a modified Ryan plan.

To the Editor: Wilensky (May 19 issue)1 and Jost (May 12 issue)2 highlighted the relative merits of the Affordable Care Act (ACA) and the “Roadmap for America’s Future” offered by Representative Paul Ryan (R-WI). Neither plan considers a simple, common-sense route to substantial savings. Medicare coverage began in 1966, when the average U.S. life expectancy was 70 years; it is now 78 years.3 In 2004, average spending on health care for individual citizens 65 to 74 years of age was $10,778,4 half of which was covered by Medicare or Medicaid. Assuming growth of 3% in Medicare spending in the future and a population of 6.4 million 65 and 66 years of age,5 extending the minimum age of eligibility to 67 years would reduce Medicare spending by $60 billion annually. This actually underestimates savings, since elderly people who continue to work at the ages of 65 to 67 years would pay the tax levied under the Federal Insurance Contributions Act (FICA), thereby accruing additional “savings.” Although this strategy would reduce benefits as compared with those provided today, it would provide proportionally greater coverage than was offered at the initiation of Medicare in 1966, covering an average of 11 years out of 78, or 14%, of citizens’ lives as compared with 6 years out of 70, or 8.6%, in 1966. Realistic plans to repair Medicare will require sacrifice, but this rational alternative guarantees savings and may be no less palatable than shifting the ever-escalating, unpredictable costs to the elderly. C.A. Manthous, M.D.