The only other route to savings, Ryan said, would be cutting provider payments beyond the targets in the Affordable Care Act — a sure path to Medicare’s collapse, he said. Budget analysts throughout the government doubt that even the legislation’s targets can be sustained past 2021. The act’s rates will “eventually become inadequate to compensate providers for their costs of treating beneficiaries,” the Medicare trustees wrote in their 2011 report.
Medicare “is going from 40 million people to 80 million people. You’re doubling the consumers of the program. Spending is going to go up,” Ryan said. “The question is: Is it going up in the stratosphere, where it bankrupts us? Or is it going up in a way where our economy can manage it?”
‘Misaligned incentives’
Rep. Chris Van Hollen (Md.) is the senior Democrat on the House Budget Committee and a veteran of this year’s skirmishes over the national debt. He argues that Ryan’s approach would jettison the nearly 50-year-old commitment to providing seniors with affordable health care. Even if traditional Medicare were preserved as an option, he said, limited subsidies would improve the federal budget by shifting costs to the elderly.
“This is how they save money. Just to be clear,” Van Hollen said. “And let’s just remember, the whole reason we have Medicare to begin with is that, in 1965, the private health insurance market did not work for older people.”
Van Hollen considers the cost slowdown evidence that Medicare is on the right track under the Affordable Care Act.
Jonathan Blum, a top Medicare official, echoed that view. He attributed much of the drop in cost growth to Obama administration initiatives, including the ACA. “When I look at the data,” he said, “it says to me the strategies are working.”
To tame the federal debt, however, Van Hollen acknowledged that Medicare must reduce costs further. He is exploring several options, including a limit on out-of-pocket spending. That would eliminate the need for seniors to buy Medigap policies, which cover catastrophic costs but also co-pays and deductibles — encouraging unnecessary doctor visits.
“We recognize there are some misaligned incentives,” he said. “But we’re not going to end the Medicare guarantee.”
Reischauer, the former CBO director, is one of the intellectual fathers of premium support, the concept advocated by Ryan. It bears similarities to the health insurance system that the Affordable Care Act will create for non-elderly people, including a regulated insurance marketplace and limited federal subsidies.
Reischauer said premium support is still a promising option for dealing with exploding Medicare enrollment. But the best option, he said, may be to let the Affordable Care Act take its course.
“Anything we’re talking about” — including premium support — “is going to take a long time to bear significant fruit,” he said. “This is an opportunity, if we stick with ACA policies, to get these more fundamental structural changes embedded in the system” — and find out whether they’re going to work.
Loading...
Comments