Seminar on Re-Envisioning Social Insurance: The Case of Medicare Hospital Insurance Program


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Seminar on Population and Health

When: Jun 30 2008 (All day)
Where: John Burns Hall room 3012

Seminar on Population and Health

Re-Envisioning Social Insurance:
The Case of Medicare
Hospital Insurance


(Bing) Chen, Ph.D.
Frank J. Manning Eminent Scholar's Chair in
Graduate School of Policy Studies
of Massachusetts

Monday, June 30, 2008
12:00 – 1:00 p.m.

John A. Burns Hall
Room 3012, 3rd floor

The trust fund of the Medicare hospital
insurance program is officially estimated to run dry in 2019. Then, absent
additional funding or reduced expenditures, the program will be able to meet
only 78% of its expenses using payroll-tax receipts alone. The reason is that
the payroll tax rate of 2.9%, shared equally by worker and employer, will be
insufficient to cover the costs.

Although the fundamental solution to
Medicare's funding problem lies in containing healthcare spending nationwide,
shoring up Medicare's shortfall cannot wait for the conclusion of cost
containment because cost containment is an ongoing effort.

though Congress is likely to adopt several
methods to increase revenues and decrease
spending, politically it can only impose modest changes which are insufficient to
remove the estimated deficit. To forestall further cuts, I propose adding a new
measure to the mix of methods to decrease spending and increase revenues.

could enact a "Medicare surtax" on seniors (age 65 and up) based on a
percentage of their personal income taxes. I would call this an
"intra-generational" funding method––older people contributing to meeting older
people's needs.
This new tax would make Medicare less reliant on the traditional
"inter-generational" approach of using payroll taxes from the young to support
the old.The paper discusses why and how
social insurance may be re-envisioned by using a new intra-generational funding
method to supplement the traditional inter-generational method of funding.

Yung-Ping (Bing) Chen is the Frank J. Manning Eminent Scholar's Chair in
Gerontology, McCormack Graduate School of Policy Studies, University of Massachusetts
Boston. Recipient of a Warren C. Scoville
Distinguished Teaching Award (economics) at UCLA, Chen's research interests are
in funding reforms of Social Security, Medicare, and long-term care;
differential pension coverage among African-American and Hispanic workers;
concept of and issues with reverse mortgages; and concept of and barriers to
phased retirement. As a delegate or consultant or both, he participated in four
consecutive White House Conferences on Aging (1971 to 2005) and the White House
Conference on Social Security (1998). He also served on the expert panel of the
1979 Advisory Council on Social Security. A fellow in the Gerontological
Society of America, a founding member of the National Academy of Social
Insurance, and a fellow in the World Demographic Association, Chen is a
graduate of the National Taiwan University
and received his Ph.D. in economics at the University
of Washington, Seattle. He has also had formal training in
law and in mental health sciences.

Primary Contact Info:
Name: Karen O. Mason
Phone: 944-7111