Why Not Let the Dead Pay for Medicare?
Kevin Drum at Mother Jones has a novel (if not original) idea. Why not let the dead pay for Medicare? Everyone knows Medicare will go bankrupt in the coming years. The program is not sustainable without reform.
So Medicare stays roughly the same, but every time you receive medical care you also get a bill. You don’t have to pay it, though. It’s just there for accounting purposes. When you die, the bill gets paid out of your estate. If your estate is small or nonexistent, you’ve gotten lots of free medical care. If it’s large, you’ll pay for it all. If you’re somewhere in between, you’ll end up paying for part of the care you’ve received.
In theory, this is how Medicaid long term care is supposed to work. If someone applied to Medicaid to pay nursing home bills, the state tries to recoup the funds in from the estate at time of death. The raises a good point. Why should taxpayers provide seniors with a subsidy worth hundreds of thousands of dollars just so aging Baby Boomers can leave a similar amount to their children?
Good luck following the accounting on that one. There are thousands of lawyers and estate planners actively engaged in hiding funds from the government. Add to that the moral hazard of seniors who know their bills will be substantial and instead use their nest eggs to live extravagantly for their last few years. Novel, but not necessarily the best idea.
@Virginia
That’s why seniors need a personal account, where their payroll contributions are held and accumulate. That would also give them an added incentive to be prudent health care consumers. In the event of a shortfall near end of life, then Medicare could step in and pay claims that are later recouped from the estate if there is one.
I agree with Virgina. It seems like there would be huge moral hazard problem with system.