Economics professor calls for Medicare means testing, expansion of Medicaid

Given the current economic climate and strains on the federal budget, George Mason University economics professor Tyler Cowen proposes in a New York Times op-ed piece that the federal government could save money in the long run if it expands Medicaid, funding it exclusively with federal dollars, and applies means testing to Medicare (Source: “Means Testing, for Medicare,” New York Times, July 20, 2008).

The means testing proposed by Cowen would involve measuring lifetime income, which he said is fairly easy to ascertain and would be difficult to manipulate. He said that would address the criticism of Medicaid that recipients can too easily hide wealth in order to become eligible for benefits. The trade-off for those well-off seniors who would see their Medicare benefits limited, Cowen said, is that the program would reach a level of sustainability that would negate the need for tax increases that would otherwise be
inevitable to keep the program afloat.