My bet is people won't allow it... .
IMO, the public is far behind the curve when it comes to understanding the nation's long-term fiscal challenges. The prevalent attitude is 'do something about the debt, but don't touch Social Security, Medicare, and Medicaid.' The idea that the nation's fiscal challenges can be addressed without reforming the programs most responsible for the long-term imbalances is akin to a belief that a magician can make the debt simply disappear.
Medicare accounts for the largest share of the nation's long-term imbalances. Paul Ryan has offered one approach. The recent health care law offered another. Unfortunately, neither approach actually addresses the underlying problem that Medicare's rapidly rising costs result not only from its own structural shortcomings, but from a system that has a chronic excessive cost growth problem. The industry, specifically the hospital system, is highly uncompetitive in a financial sense and, arguably in a outcomes per cost sense, too. The hospital sector is an inflation generator.
Since the beginning of 2000 (through the April 2011 CPI report), the average annual increase in key inflation indices was:
CPI: 2.6%
Core CPI (excludes food and energy prices): 2.0%
CPI excluding Medical Care: 2.5%
Medical Care: 4.1%
Medical Care Commodities: 2.9%
Medical Care Professional Services: 3.3%
Medical Care Hospital and Related Services: 6.7%
Put another way, overall Medical Care prices rose 1.56 times faster than overall consumer prices and 1.62 times faster than all consumer prices excluding medical care. Hospital and related services rose 2.58 times the rate of overall consumer prices and 2.67 times the rate of all consumer prices excluding medical care. In short, fundamental health care reform that dramatically restructures the nation's hospital system will be essential to addressing the chronic excessive cost growth problem. The present cost trajectory is not sustainable. It will push the U.S. toward a long-term fiscal crisis. That crisis could be amplified on account of a combination of excessive government debt and excessive household debt (household deleveraging appears to be ending or have ended recently).
Whether Medicare services are rationed via a Board (as set forth in the health care law) or via vouchers that rapidly lose purchasing power, won't necessarily address that problem given the relative inelasticity of demand for such services. Indeed, given Congress' inability to implement extremely small cost savings that are already part of existing law, it is highly unlikely that Congress would accept either rationing approach. Instead, the Board's decision would be waived as happens regularly concerning phsyician fees payments or the vouchers would be increased in size beyond what had been envisioned. If so, the nation's long-term fiscal challenges would continue to mount.