Brilliant!

Kevin Drum is onto something regarding Medicare: 

So why not have dead people pay? They don’t need the money any more, after all.

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.

Obviously this gives people incentives to spend all their money before they die. That’s fine. I suspect they wouldn’t end up spending as much as you’d think. What it does mean, though, is that Medicare has first claim on their estate, not their kids. But that seems fair, doesn’t it?

Do you want to make sure to credit estates with all the Medicare taxes that have been paid over the years? Fine. Do you want to exempt a certain smallish amount to account for genuine family heirlooms? Fine. Do you want to pass laws making sure that estates can’t be transferred to other people or trusts in order to evade this rule? Or regulate the use of reverse mortgages? Or make special rules for heirs who are minors? Fine, fine, and fine. Whatever.

But I’ll bet this would raise a fair amount of money. What’s more, that Medicare bill, with its continuously increasing grand total, would give people a pretty good sense of just how much medical care they’re really getting. And it wouldn’t impoverish the elderly with means testing while they were living. It would come solely from dead people, who have taken advantage of Medicare while they were alive and have no use for their money after they’re dead. So what’s not to like?

Drum manages to find a partial solution to two of the major issues of the day.  First, his idea would help make Medicare less expensive for the government because money would come back into the system from estates after people pass away.  Second, Drum’s idea would deliver a boost to an economy just coming out of a recession, as it would be an added incentive for people to spend the money they have while they’re alive instead of hoarding it away and passing it on via their estates.  Finally, a common complaint about Social Security/Medicare is that it burdens the younger generations with the debts of older generations.  Drum’s proposal would addresses that complaint by ensuring that each generation will help make up the difference between the money that goes into medicare and the money that comes out, by paying in a portion of what they owe via their estates.   

The republicans have managed to convince a good portion of the country that people have some inherent right to transfer wealth without it being taxed after their death. There is no such right, your money/property is your own, but once you seek to transfer that wealth the government has the right to tax it if it chooses.  America is supposed to be the land of opportunity.  Today it is a place where the wealthy stay wealthy and the poor stay poor, and part of the problem is that millionaires and billionaires get to just pass on their wealth generation to generation like in the feudal systems that used to dominate Europe.

I’m not saying Drum’s proposal would solve all our problems with Medicare, or even most of them.  But it would be a step in the right direction.

(H/T Gars)

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