Research Briefing

Democrats Are Content To Let Medicare “March Into Insolvency,”

While Falling Back On Shameless Partisan Attacks

The Chicago Tribune: “If Not The Ryan Plan, Democrats, Then What?” (Editorial, “What Real Leaders Do,” The Chicago Tribune, 4/5/11)

• USA Today: “Democrats Have Already Begun To Demonize The Ryan Plan, But Where Is Theirs?” (Editorial, “Dems Bash GOP Budget, But Where’s Theirs?,” USA Today, 4/6/11)

MEDICARE IS ON “A MARCH INTO INSOLVENCY”

AND IS BRINGING THE COUNTRY WITH IT

“Nothing Will Sooner Finish Off ‘Medicare As We Know It’ Than To Continue Its Present March Into Insolvency.” (Editorial, “Medicare For A New Century,” The Wall Street Journal, 4/6/11)

After Taking Into Account Medicare And Medicaid Obligations, The U.S.’s Debt Is $75 Trillion. “The U.S. has unrecorded debt of $75 trillion, or close to 500 percent of gross domestic product, counting what it owes on its bonds plus obligations for Social Security, Medicare and Medicaid, Gross wrote in his monthly investment outlook.” (Wes Goodman, “Bill Gross Says U.S. Debt Has Little Value, Echoes Buffett,” Bloomberg, 3/31/11)

CBO:  Medicare Spending Continues To Increase Leading To “Growing Budget Deficits And Surging Federal Debt.”  “In particular, spending on the government’s major mandatory health care programs— Medicare, Medicaid, CHIP, and health insurance subsidies to be provided through the new insurance exchanges—along with Social Security will increase from roughly 10 percent of GDP in 2011 to about 16 percent over the next 25 years. If revenues stay close to their average share of GDP for the past 40 years, that rise in spending will lead to rapidly growing budget deficits and surging federal debt.”  (Congressional Budget Office, “The Budget And Economic Outlook: Fiscal Years 2011-2021,” 1/26/11)

Medicare Expenditures Are Going To Increase At A Faster Rate Than Economic Growth. “Total Medicare expenditures were $509 billion in 2009 and are projected under current law to increase in future years at a somewhat faster pace than either workers’ earnings or the economy overall.” (“The 2010 Annual Report Of The Boards Of Trustees Of The Federal Hospital Insurance And Federal Supplementary Medical Insurance Trust Funds,” CMS.gov, 8/5/10)

 “Total Medicare Expenditures Also Are Projected To Increase As A Share Of GDP, Thereby Threatening Medicare’s Long-Term Sustainability.” (Medicare’s Financial Condition: Beyond Actuarial Balance,” The American Academy Of Actuaries, November 2010)

• And That’s When “More Realistic Assumptions” Are Ignored. “Nevertheless, serious long-term challenges remain and must be addressed— especially when more realistic assumptions regarding future Medicare spending are incorporated into the projections.” (Medicare’s Financial Condition: Beyond Actuarial Balance,” The American Academy Of Actuaries, November 2010)
  
  
• Richard Foster, The Chief Actuary At CMS, Says “Portrayal Of Future Costs Under Current Law” Are An Understatement Of The Real Costs.  “While the Part B projections in this report are reasonable in their portrayal of future costs under current law, they are not reasonable as an indication of actual future costs. Current law would require physician fee reductions totaling an estimated 30 percent over the next 3 years—an implausible result.” (“The 2010 Annual Report Of The Boards Of Trustees Of The Federal Hospital Insurance And Federal Supplementary Medical Insurance Trust Funds,” CMS.gov, 8/5/10)

The Medicare Board Of Trustees Is Urging Congress To Reform Medicare Before It’s Too Late

The Medicare Trustees: “Prompt Action Is Necessary” To Keep The Trust Fund From Going Bankrupt. “We believe that prompt action is necessary to address both the exhaustion of the HI trust fund and the anticipated excess growth in HI, SMI Part B, and SMI Part D expenditures.” (“The 2010 Annual Report Of The Boards Of Trustees Of The Federal Hospital Insurance And Federal Supplementary Medical Insurance Trust Funds,” CMS.gov, 8/5/10)

• “Delaying Action Would Require More Drastic Tax Increases Or Benefit Reductions In The Future.” (Medicare’s Financial Condition: Beyond Actuarial Balance,” The American Academy Of Actuaries, November 2010)
  
  
• The Medicare Trustees Report: “Consideration Of Further Reforms Should Occur In The Near Future. The Sooner Solutions Are Enacted, The More Flexible And Gradual They Can Be.” (“The 2010 Annual Report Of The Boards Of Trustees Of The Federal Hospital Insurance And Federal Supplementary Medical Insurance Trust Funds,” CMS.gov, 8/5/10)
  
  
• Quick Reform Will Mean Less Uncertainty For Businesses And Taxpayers. “Moreover, the early introduction of reforms increases the time available for affected individuals and organizations—including health care providers, beneficiaries, and taxpayers—to adjust their expectations.” (“The 2010 Annual Report Of The Boards Of Trustees Of The Federal Hospital Insurance And Federal Supplementary Medical Insurance Trust Funds,” CMS.gov, 8/5/10)

AND ACCESS TO CARE WILL BE IN SERIOUS JEOPARDY IF CONGRESS DOESN’T CHANGE THE STATUS QUO

The Medicare Trustees Report: Congress Will Have To Intervene To Prevent “Severe Problems” With Access To Health Care. “Well before that point, Congress would have to intervene to prevent the withdrawal of providers from the Medicare market and the severe problems with beneficiary access to care that would result.” (“The 2010 Annual Report Of The Boards Of Trustees Of The Federal Hospital Insurance And Federal Supplementary Medical Insurance Trust Funds,” CMS.gov, 8/5/10)

Doctors Across The Country Say They’ve Been Forced To Shift Away From Medicare Patients Toward High-Paying, Privately Insured Or Self-Paying Patients In Response To Years Of Penny-Pinching By Congress. “Top-ranked primary care doctor Linda Yau is one of three physicians with the District's Foxhall Internists group who recently announced they will no longer be accepting Medicare patients. ‘It's not easy. But you realize you either do this or you don't stay in business,’ she said. Doctors across the country describe similar decisions, complaining that they've been forced to shift away from Medicare toward higher-paying, privately insured or self-paying patients in response to years of penny-pinching by Congress. And that's not even taking into account a long-postponed rate-setting method that is on track to slash Medicare's payment rates to doctors by 23 percent Dec. 1.” (N.C. Aizenman, “Doctors Say Medicare Cuts Force Painful Decision About Elderly Patients,” The Washington Post, 11/26/10)