Media Releases
The Coming Crisis of Medicare
The Coming Crisis of Medicare
Medicare is becoming an anachronism. The ‘free and universal’ taxpayer-funded health systems of the twentieth century were created in an age when medicine was rudimentary and inexpensive, when the old died relatively young, and doctors mainly saved people from misadventure rather than from the consequences of their lifestyle choices.
The demographic and medical realities of the twenty-first century mean that Medicare can no longer provide every citizen with ‘free’ access to all the new medicine. Without reform, healthcare in the 2040s is likely to be increasingly about rationing.
In a report released today by the Centre for Independent Studies, The Coming Crisis of Medicare, Jeremy Sammut outlines the combined impact of demographic trends toward ageing and the increasing costs of new high-tech medical technology on healthcare supply and demand in the future.
‘New medicines and procedures to treat diseases and conditions associated with old age will increase health expenditure more than anticipated by the Federal government’s Intergenerational Reports. Ageing, in interaction with new technology, will lead to much higher than anticipated health spending in the future.’
Jeremy Sammut says that ‘as the baby boomers grow grey, the most important source of ‘fiscal pressure’—of expenditure outstripping revenue—will be federal spending on health. The current policies of the Federal government, especially Medicare, are fiscally unsustainable in the long term. In 2021, in the absence of policy changes, the Commonwealth budget will go into deficit, and net Commonwealth debt will re-emerge.’
‘Population ageing in the twenty-first century will rewrite the generational social contract. The baby-boomers will expect future generations of taxpayers to pay for an expanded range of life-enhancing and life-prolonging medical treatments that they did not have to pay tax to provide for the present generation of elderly. This will set the stage for real intergenerational conflict, if a rising tax burden reduces the ability of Gen X and Gen Y to accumulate wealth.’
Jeremy Sammut is a Research Fellow at the Centre for Independent Studies.
He is available for comment.
Copies of the report The Coming Crisis of Medicare are available online: www.cis.org.au
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