Last month’s Medicare Trustees’ report confirms that Medicare is going bankrupt faster than Social Security, even though they serve the same population.
Social Security subsidizes demand by seniors for all goods and services, whereas Medicare subsidizes the supply of health goods and services to seniors at fixed prices, which creates worse incentives and higher spending.
The federal government forbids Medicare beneficiaries from taking full advantage of consumer-driven reforms that exist in the private sector, such as Health Savings Accounts – a burden it must remove in order to restore solvency.
