Five myths about Medicare
By John Rother,
WashPost
Published: February 24
1. Medicare is inefficient and fails to control costs.
The trustees of Medicare last year projected that the program’s share of gross domestic product would increase from the current 3.7 percent to about 5 percent in 2030 and nearly 6 percent by 2050. But since Medicare’s inception in 1965, its spending growth, on a per-person basis, has stayed consistent with or lower than the increase in private health insurance premiums.
The Congressional Budget Office recently predicted that per capita Medicare spending will grow 1 percent faster than the rate of inflation over the next decade. The CBO attributes the slower projected trend in Medicare spending to the enactment of President Obama’s health-care overhaul, which reduced high payments to Medicare HMOs, and to the anticipated influx of younger, healthier baby boomers, which will lower the average cost per beneficiary. Medicare enrollment is projected to accelerate over the next 25 years, from 47.5 million today to 80 million in 2030.
The addition of baby boomers is the single largest factor in Medicare’s projected spending growth over the next few decades. In the short term, this shouldn’t be a problem, but as that vast generation ages, if systemwide health-care costs don’t come down, it will be.
(More here.)
WashPost
Published: February 24
1. Medicare is inefficient and fails to control costs.
The trustees of Medicare last year projected that the program’s share of gross domestic product would increase from the current 3.7 percent to about 5 percent in 2030 and nearly 6 percent by 2050. But since Medicare’s inception in 1965, its spending growth, on a per-person basis, has stayed consistent with or lower than the increase in private health insurance premiums.
The Congressional Budget Office recently predicted that per capita Medicare spending will grow 1 percent faster than the rate of inflation over the next decade. The CBO attributes the slower projected trend in Medicare spending to the enactment of President Obama’s health-care overhaul, which reduced high payments to Medicare HMOs, and to the anticipated influx of younger, healthier baby boomers, which will lower the average cost per beneficiary. Medicare enrollment is projected to accelerate over the next 25 years, from 47.5 million today to 80 million in 2030.
The addition of baby boomers is the single largest factor in Medicare’s projected spending growth over the next few decades. In the short term, this shouldn’t be a problem, but as that vast generation ages, if systemwide health-care costs don’t come down, it will be.
(More here.)
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