With all the hoorah going on about “fiscal cliffs”, tax rates, loopholes, debt limit and government deficit spending perhaps there may be a small but important quick fix for what is still the most rapidly growing cost to the Feds, employers and the public at large - health care.  Health care now costs almost 20% of the nation’s income either through Fed spending in Medicare and Medicaid or private programs.  And adding 40 million more to those covered by health insurance will certainly increase this cost smartly.  For starters, the Obama bill will have the Feds pay for those who cannot afford the insurance who promise to be many, if not most, of the newly insured. 

Most who look at these costs predict that this continued rapid increase in health care costs means Medicare will run out of funds in the not too distant future.   In spite of this the Congress once more delayed a modest effort to control Medicare costs, a reduction in what Medicare will pay doctors for their services.   This is indicative, suggesting nothing is in the cards to control health care costs. 

So rather than trying to control health care costs we should look at making sure there will be plenty of funds for Medicare in the future.  My suggestion, raise the Medicare contribution made by employees and employers from its current 1.45% of income for both sides or a total of 2.9% to a total 5% split 50-50 as is done currently.  This small increase could yield as much as $150 billion, probably enough to insure that Medicare will stay well funded well into the future. 

Beside raising sufficient funds to insure Medicare’s fiscal security this move would have two other benefits.  First, it would not be an increase in income taxes thus avoiding all the heated debate about raising “taxes,” second it would move government financing a bit further toward matching revenue to expenditure.  We already see this in local government financing where fees for services are common, instead of funding all services out of general revenues.  Sounds like a “win - win” solution to me.