Don't mean to be a wise guy, but the big reason Medicare costs have gotten out of control is that a) the over-65 population is getting quite large; and b) the health care system is much more effective than it was even 10 years ago. Neither development should be big news - we all knew that baby boomers would be reaching Medicare age some day. And now that we're there, I don't see anyone volunteering to return to 1965-era medicine. Politicians, meanwhile, have been putting off reform efforts for years (decades really) because, well, that's what politicians do. And I suspect that's what they'll continue to do no matter who wins in November (just as local pols will put off adequate pension reform). From the New Yorker's John Cassidy:
Medicare's big challenge is demographics, not cost inflation. We've all seen the projections: if nothing is done to constrain it, spending on retiree health care will virtually swallow the federal budget. But what's driving that spending is the growing number of enrollees--another million and a half Baby Boomers every year--rather than rising spending per person. "[W]hen it comes to what health-care costs per person, Medicare's growth rate is remarkably low," Feder pointed out--about three per cent a year over the next decade, according to the latest projections, which is considerably less than the cost inflation in the private-insurance sector.
Slate's Matthew Yglesia adds this:
In broad economic terms, the problem with senior citizens is that they're retired. Just idle mouths to feed, collecting governmnt benefits and spending down wealth accumulated in the past. In terms of per capita GDP, the quicker they die the better. But it sounds perverse to say that the goal of our Medicare reform policy should be to kill the elderly as quickly as possible. Indeed it sounds perverse because it is perverse. But again the question is what are the "costs" of Medicare that we're worried about? If we're not worried about the impact on economic growth, then it isn't obvious why high levels of Medicare spending is a problem. But if we are worried about the impact on economic growth, then the biggest problem with Medicare isn't that it's wasteful it's that it may be succeeding in its policy objective of keeping retirees alive and healthy.