Congressman Paul Ryan, chairman of the House Budget Committee, indicated over the weekend that as part of the budget proposal he’s unveiling this Tuesday, he’ll seek to dismantle the Affordable Care Act, or as he put it on Fox News Sunday, “repeal Obamacare.”
With the sequester a firm reality – at least for now – Washington has moved along to other serious discussions about the nation’s long-term debt. And it is Congressman Ryan’s point that when it comes to entitlement spending, saving Medicare will require changes as to who gets the benefit and at what age, reforms that are currently not possible under Obamacare – thus the continued commitment to repeal.
The inevitable debate about Medicare and a sustainable budget does tend to be avoided, since politicians are then forced to deal with the pesky truths of the massive demographic transformation of our society from young to old. As we live longer by decades and stop having babies by the tens of millions, America in the 21st century, like all other countries, will look different than when our social welfare programs – principally for health care (America’s Medicare) and retirement (America’s Social Security) – were enacted. It seems an unshakable part of our culture that we keep 65 as the magic date – but we’ve got update our thinking and culture to today’s new demographic truths.
The age at which these financial support mechanisms kick in – our mid-60s – and their actual construction both date back to the 19th century, with some minor updating in the first part of the 20th. It was Otto von Bismarck’s proposal for Germany in the 1880s that the state provide for those who were “disabled from work by age and disability.” The ideas themselves came from private pension systems in such valued and important industries of the time as the railroad.
That was then! But now we need to align our socio-economic public policies to today’s workers and industries. Beyond the fiscal impact, the most important consequence of a more honest political discourse in this arena would be to “update” what we, and the world, expect of those in their 60s, 70s, and 80s.
This will have a huge impact on how future generations live their lives. As Dr. Sarah Harper of the Oxford Institute on Ageing pointed out a year ago in her London Oxford Lecture, “a young girl who was born in the mid-nineties [in London, New York or even Beijing] is likely to see three centuries.” Or at least it ought to have some impact, as it ought to have consequences for how we shift our public policy thinking.
There will be 1 billion of us over the age of 60 as soon as 2020 – and shortly more than that under the age of 14. Given that, neither America nor the rest of the world can continue to afford the presumed dependence and disability model for a 65-year-old that might have been reasonable in 1880 or even in the 1960s when we created Medicare. So we should also change both the sociology of “aging” and the public policies that might actually be designed to enable a healthy and active population aging.
For those over 65 in 1880, Bismarck asked: How can we help them? The answer was with social support programs, which would also be good for society, since those “old 65ers” were in their last years and needed and deserved the help. The question to ask today is: How can we enable this massively growing demographic segment of society to remain economically active and socially engaged?
Doing that is good for one’s health and great for the political economy’s fiscal sustainability. It also takes us down different policy debate paths. Today we want to know how to invest to keep people well for longer decades of life and offer incentives to keep them working and active. This approach would also help solve our long-term debt issues. And can only happen if people like Paul Ryan challenge some basic assumptions that went into the creation of Medicare and other entitlement programs.