The Looming Medicare Crunch
Jul 31, 202080.4K Shares1M Views
The New York Times’ Robert Pear has been covering health care policy for years, and today he’s got a nice succinct pieceabout the trouble facing Medicare and Medicaid. It’s not a pretty picture. As Pear points out, the cost of the two programs last year was $627 billion, constituting 23 percent of all federal spending. In a decade that dollar figure will double, representing 30 percent of the budget.
Part of the projected increase is a consequence of the retiring Baby Boomers, the first of whom will be Medicare-eligible in 2011. But the more significant factor, experts say, is not the aging population but the rate of health inflation, which is leaping much more quickly than wages, federal revenues and the overall economy. This means that it’s not the number of Medicare patients, but the rising cost to treat each one, that’s the most significant problem facing the federal budget.
None of this is news. Nor is it difficult to understand why the nation’s lawmakers have been slow to react: Politicians are in the business of being liked, and of the few available remedies, none will be popular. Congress will have to raise taxes, cut benefits or increase cost-sharing for beneficiaries. (Most likely, they will choose some combination of all three.)
The question is, when? Because even the presidential candidates — for all their talk of health care reform — have said little about how they would address the underlying spending crisis. As Pear writes:
“„[T]he need for cutbacks is not a popular theme for political candidates wooing voters who want more care at a lower cost.
“„The Democrats do not say, in any detail, how they would slow the growth of Medicare and Medicaid or what they think about the main policy options: rationing care, raising taxes, cutting payments to providers or requiring beneficiaries to pay more.
Nor do they say how they would overcome the health care industry lobby, which has blocked proposals for even modest reductions in Medicare payment rates.
“„Instead, scores of lawyers and lobbyists are continually urging Congress to expand Medicare coverage of specific drugs, medical devices, tests and procedures.
This silence, perhaps, is understandable in an election year. But folks who call themselves leaders will soon have some explaining as to why they put the pharmaceutical and device lobbies above the fiscal health of the country they’re leaving for future generations. Because the longer they wait to act on health reforms, the more severe the shockwaves emanating from those reforms will be.
As Peter Orszag, director of the Congressional Budget Office, told lawmakers last year: “I think the best time to start is about 10 years ago.”
Rhyley Carney
Reviewer
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