Why Americans will never “grow up” as long as we have Medicare

Beth Haynes writes at Pajamas Media today that Americans need to grow up, and stop thinking we can, in her metaphor, choose and eat cake we haven’t paid for.

Her point is good, as far as it goes.  There ain’t no such thing as a free lunch.  But as long as we have “Medicare,” we’re going to continue, willy-nilly, to behave as if we think there is one.

It is not possible to do otherwise.  When people don’t see their arrangements for medical care as a fee-for-service proposition, but rather as a collective “social insurance” scheme, in which the emotion of the moment will always be the tiebreaker for lawmakers’ decisions about other people’s money, no one has to “grow up.”

How do people “grow up” in the course of normal life?  From what does the concept of “growing up” derive?

“Growing up” means assuming responsibility for yourself.  It seems absurd to have to point out anything so basic, but then, we’ve been living under a nanny state for quite a while now.  Growing up is what you do as you transition from infant to child, from child to adolescent, and from adolescent to adult.

At each step of the way, the transition is marked by your increased ability and willingness to assume responsibility for yourself.  At a certain point, you – and you alone – are held accountable for your actions.  With that accountability comes an autonomy that almost everyone looks forward to with longing, during his or her teenage years.  You can do what you want to do about the big choices in life: what career you choose, where and how you live, whom you marry.

The price of that autonomy is taking care of your own needs.  The more responsible you are about that, the less interference there will be from others – family, the civil authorities – in your life.

Before Medicare existed, “medical care” was something you planned for as part of that responsible mode of living.  Hard as it is to believe, people paid cash for all their routine check-ups, doctor visits, and prescription drugs.  Most in the middle class maintained insurance for what was called “hospitalization,” meaning the need for expensive in-patient care, whether because of an auto or work accident, childbirth, children’s illnesses, or the health problems of the elderly.

That insurance cost far less, as a percentage of income, than today’s health program premiums.  Premiums were higher, of course, for older rate-payers and those who were especially likely to make claims, such as young couples in their child-bearing years.  For many on the payrolls of large companies, medical insurance – on the “hospitalization” insurance basis – was a benefit provided by employers.  (Naturally, your pay was lower by the amount of the monthly premium.)  Whether you paid out of pocket or your employer paid, it was smart to enroll in medical insurance early in life, as that meant your premiums – if you stayed with your insurer – would be better when you got past 50.

People were very particular about buying their insurance, because they understood that their choices about it would determine the kind of services they could claim if they needed medical care.  The concept of paying some money by the month in order to have unlimited access to medical care did not exist.  It was understood that there would be limits on what the insurance company would pay for, just as there are limits with auto and home insurance.  Saving money “for a rainy day” was targeted on the kinds of contingencies insurance might not pay for.

But middle-class Americans had much more discretion over their income then.  They didn’t fork over everything they earned in the first four months of the year to three or four levels of government.  The social contract that was based on being responsible for your own medical needs came with the particular benefit that you kept more of what you earned.

None of this meant that there was no provision for the indigent.  States and counties across America maintained publicly funded hospitals and clinics whose purpose was to provide care for those who couldn’t pay.  Religious organizations provided medical care for the indigent as well, and in some places their facilities were the first resort.  The system wasn’t perfect, by any means, but it reflected the social contract of individual responsibility combined with compassion.

When Medicare came along, it changed all that.  Literally, all of it.  Medicare divorced medical care from any understanding about prior limits on contractual obligations.  It treated medical care not as an element of individual arrangements and responsibility, but as a political issue of collective entitlement.

When experts today point out that a Medicare beneficiary draws from Medicare several times what he paid into it, they are only noting what was supposed to happen.  It was the intention of Medicare to ensure that prior contributions and prior arrangements would not limit the care retirees would receive.  Of course that’s what it does.  That was the whole point.

Beth Haynes urges us to repudiate that idea, and she is right to.  But repudiating that idea is repudiating Medicare.  If we can be brought to repudiate it, we won’t need “Medicare” at all.  Indeed, it will be a hindrance to us.  There is no point in turning something over to the government if the basis for claims on it is not to be divorced from what we put into it.  Only if it is important to us that medical care be allocated on a political basis, for political purposes, is there a reason to continue Medicare on its current model.

No one has ever argued that today’s seniors should be left to fend for themselves.  We’ve had Medicare for nearly 44 years; most who are on it today spent most of their working lives paying into it – money they could have spent differently if it had been left in their pockets.  No changes to Medicare should adversely affect their access to care.

But I think one reason it has been so easy to flog the “Mediscare” theme is that at least some people intuitively understand that the Ryan plan may be a step in the right direction, but it doesn’t break firmly enough with the fundamentally unsound basis of Medicare.  If you “grow up,” as Ms. Haynes urges Americans to, and accept that what you get out of your medical insurance has to be limited, and has to be tied to what you chose to pay into it – then what do you need a government entitlement program for?

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.