A lesson from Econ 101: There's no such thing as a free
lunch.
Another lesson from Econ 101, courtesy of The Heritage Foundation:
There's no such thing as a free drug either.
If Congress allows Medicare to cover prescription drugs-making them
less expensive for most seniors-the costs will be staggering. As
Heritage economists Brian Riedl and William Beach show in a
forthcoming research paper, such an entitlement would:
• Cost taxpayers $2 trillion through 2030 alone, with
escalating costs thereafter.
• Mean today's 40-year-olds could expect their families to pay
$16,217 in extra taxes until retirement.
• Mean babies born today would, by age 27, pay extra taxes
averaging $1,125 per household in 2030. (That's on top of
Medicare's payroll taxes and other taxes needed to cover future
shortfalls in Social Security and Medicare itself.)
In short, adding a prescription drugs to Medicare would kill just
about any tax relief in the future-a major factor for economic
growth, jobs and general prosperity. "Responsible lawmakers who
oppose substantial tax increases should look beyond the 2004
election and examine the burden that a Medicare drug entitlement
will impose on future generations," Riedl and Beach write.
Read more of Heritage's Medicare research at heritage.org.
For more information or to receive an e-mail version of "Medicare
Maladies," contact [email protected]
or call Heritage Media Services at (202) 675-1761.
Report Health Care Reform
Medicare Malady #11: "Free" Drugs Will Cost $2,000,000,000,000 By2030
July 23, 2003 1 min read
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