USA Today Examines Future Of Medicare

USA Today on Thursday examined how a "projectedlong-term explosion of health care costs could force sweeping changes" inMedicare, private health insurance and Social Security, as part of a series onthe effects of the retirement of baby boomers.

The Congressional Budget Office estimates that combined spending onMedicare and Medicaid likely will account for 19% of gross domestic product by2082, compared with 4% today, without changes to the programs. According to theAmerican Academy of Actuaries, elimination of the expectedMedicare deficit over 75 years would require a 122% increase in the Medicarepayroll tax, a 51% reduction in benefits or a combination of the two.

CBO Director Peter Orszag said of the long-term financial problems withMedicare, "I'm an optimist," adding, "There are opportunities toremove costs from the system without harming health care," such astargeted reimbursements for the most effective treatments. Changes in "howMedicare pays health providers could reduce spending" and "promptother changes in the broader health care system," and "steps byCongress to reform the broader health care system by moving towardgovernment-mandated insurance or greater use of tax incentives could alsoaffect Medicare," USA Today reports.

Tricia Neuman, a Kaiser Family Foundation vice president and director of theMedicare Policy Project at the foundation, said, "There are wide-rangingoptions," adding, "There are changes that could directly affectbeneficiaries ... providers, doctors, hospitals; there are changes that couldaffect insurers. And there are more structural changes" that could affecthealth care for all U.S. residents. In addition, she said, "Changes are onthe long-term horizon, but it doesn't appear that major changes are imminent inthe short term," adding, "The good news for people who areapproaching Medicare age is that there is now a drug benefit" (Kirchhoff,USA Today, 1/17).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.