The current pay-as-you-go model for funding medicare is unsustainable given the needs of an aging population, according to a report from the University of Calgary’s School of Public Policy. Authors say that even modest increases in health spending will break the bank.
According to the report, it is too late to collect sufficient taxes from baby boomers—now aged 45 to 65—to fund their health care needs down the road. This shifts the burden of paying for baby boomers’ health care bills to their children and grandchildren—a tax bill potentially twice as large as it is currently—and raises the question of whether the next generation will accept having their taxes substantially increased to finance health care for older people. Authors predict that a tax revolt will threaten the future of medicare as we know it.
Reducing health care costs is the only way to sustain medicare, according to the report. Governments must encourage home care for the elderly, reduce the prevalence and severity of chronic diseases, and change how these diseases are managed to reduce reliance on doctors and hospitals.
The report, entitled “Can we avoid a sick fiscal future? The non-sustainability of health-care spending with an aging population,” can be viewed at http://policyschool.ucalgary.ca/sites/default/files/research/emery-gener....
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