Medicare Budget Concerns Easing
The changes are big. The difference between the current estimate for Medicare’s 2019 budget and the estimate for the 2019 budget four years ago is about $95 billion. That sum is greater than the government is expected to spend that year on unemployment insurance, welfare and Amtrak — combined. It’s equal to about one-fifth of the expected Pentagon budget in 2019. Widely discussed policy changes, like raising the estate tax, would generate just a tiny fraction of the budget savings relative to the recent changes in Medicare’s spending estimates.
The reason for the change:
Some of the recent reductions in Medicare spending are because of differences in estimates about the economy and demographics that affect the program.
And some are because of cuts in health care spending passed by Congress. The Affordable Care Act, in particular, made significant reductions to Medicare’s spending on hospitals and private Medicare plans, to help subsidize insurance coverage for low- and middle-income Americans. The Budget Control Act, which Congress passed in 2011, also made some across-the-board cuts to Medicare spending.
But much of the recent reductions come from changes in behavior among doctors, nurses, hospitals and patients. Medicare beneficiaries are using fewer high-cost health care services than in the past — taking fewer brand-name drugs, for example, or spending less time in the hospital.
We’re not out of the woods yet. There are lots of baby boomers retiring over the next decade and a half and a Congress that seems incapable of passing legislation. But at least we have bought some time.
Click here for reuse options!Copyright 2014 Liberaland
By: Stuart Shapiro
Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.
6 responses to Medicare Budget Concerns Easing
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Eric Trommater August 31st, 2014 at 07:38
The eminent collapse of Medicare under the weight of the Baby Boom retirement has been a scam from the get go from conservatives were ideologically apposed to it and liberals who wish to make defending it a stick in the eye to it’s opponents. This $95 billion is an example. If making Medicare work was the main goal we would make Medicare work.
Eric Trommater August 31st, 2014 at 07:38
The eminent collapse of Medicare under the weight of the Baby Boom retirement has been a scam from the get go from conservatives were ideologically apposed to it and liberals who wish to make defending it a stick in the eye to it’s opponents. This $95 billion is an example. If making Medicare work was the main goal we would make Medicare work.
mea_mark August 31st, 2014 at 08:55
I bet if we could just Americans to eat healthier we would really save a lot. Prevention is so much cheaper than fixing problems we create for ourselves.
mea_mark August 31st, 2014 at 08:55
I bet if we could just Americans to eat healthier we would really save a lot. Prevention is so much cheaper than fixing problems we create for ourselves.
liberalMD August 31st, 2014 at 22:12
The “Medicare crisis” may be easing but another is on the horizon: a significant amount of the “savings” Medicare has recently touted has been at the expense of doctors and hospitals, to the point that doctors and hospitals are being reimbursed less than their acquisition costs for supplies and drugs and the amount they clear after paying off these expenditures frequently does not cover the overhead. While some hospitals and doctors are getting by, others are having to subsidize their operations out of their own pockets. Private insurance companies are following Medicare’s lead. I foresee a significant number of closures of hospitals and doctor’s offices within the next 2-3 years and it will become exceedingly more difficult to obtain health care..
liberalMD August 31st, 2014 at 22:12
The “Medicare crisis” may be easing but another is on the horizon: a significant amount of the “savings” Medicare has recently touted has been at the expense of doctors and hospitals, to the point that doctors and hospitals are being reimbursed less than their acquisition costs for supplies and drugs and the amount they clear after paying off these expenditures frequently does not cover the overhead. While some hospitals and doctors are getting by, others are having to subsidize their operations out of their own pockets. Private insurance companies are following Medicare’s lead. I foresee a significant number of closures of hospitals and doctor’s offices within the next 2-3 years and it will become exceedingly more difficult to obtain health care..