Health Affairs, 25, no. 3 (2006): w114-w134 (Published online 21 March 2006) doi: 10.1377/hlthaff.25.w114 © 2006 by Project HOPE	New Online   Pay Cuts For Medicare Docs   Access To Care Woes   Public Coverage More Efficient   Empowering Consumers

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Understanding Social Insurance: Fairness, Affordability, And The ‘Modernization’ Of Social Security And Medicare

Americans have been urged for several decades to view Social Security and Medicare as political relics—both unaffordable and unfair in light of contemporary demographic and fiscal circumstances and the practices of modern financial markets and modern medicine. Proposals abound for "modernizing" both systems to emphasize choice, competition, and individual ownership. This paper contends that critics of Social Security and Medicare have misanalyzed the problems of both programs and are urging misdirected reforms. The critics, we argue, are often wrong factually and sometimes confused conceptually. More fundamentally, these critiques and proposals are either ignorant of or hostile to the fundamental logic of social insurance.

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