Marginal Analysis of Medicare

We have blogged about over-consumption of medical care by seniors before, as it is a perfect illustration of the marginal analysis of Chapter 4:  if you reduce the MC of an activity, you get more of it.

• How many times do we have to repeat this until someone listens?
• taxes for every taxpayer would have to rise by roughly 81% to pay all of the benefits promised by these programs under current law over and above the payroll tax
• Election update: fiscal wake-up questions for candidates
• Medicare poses a much bigger challenge than Social Security. According to the 2007 trustees report, Medicare's projected costs over the next 75 years exceed its earmarked taxes and premiums by $34 trillion in present value. Measured as a share of the economy, Medicare will more than double by 2035.
• Them Geezers is Bleeding us Dry
• Sure enough, the number of enrollees increased somewhat, but expenditures per enrollee per year increased from ~$1,000 in 1980 to ~$10,000 in 2009. Folks, the automatic increases at this pace just aren't sustainable. I sure wish we could have an honest debate about it.
• Happy New Year: start worrying now
• ... an average-wage, two-earner couple together earning $89,000 a year. Upon retiring in 2011, they would have paid $114,000 in Medicare payroll taxes during their careers. But they can expect to receive medical services -- from prescriptions to hospital care -- worth $355,000, or about three times what they put in.

And every MBA student at Vanderbilt has had to watch Stossel's video, on GREEDY GEEZERS: