As Federal Deficits Increase, so Do Threats to Medicare editor of the Washington Post, noting, in part, that “Placing the burden Last week, the Medicar e of paying for the tax Rights Center explained how the bill onto older adults and people House majority’s budget with disabilities who rely on plan for 2019 would Medicare and Medicaid is fundamentally restructure unconscionable.” Medicare and Medicaid, Days later, the nonpartisan slashing more than $2.1 trillion Congressional Budget Office from the programs over 10 (CBO) confirmedthat last years. Though this approach is year’s tax bill will add $1.84 not unexpected—as trillion to the federal deficit over lawmakers promised to use the next decade, ensuring that deficits created by last year’s tax Medicare will remain under bill as an excuse to pursue such threat for years to come. cuts—it is extremely troubling. In its long-term budget This week, Medicare Rights outlook, CBO projects that over and the Center for Medicare the next 30 years, debt levels Advocacy highlighted our will rise to “the highest in the concerns in a letter to the nation’s history by far.” The
agency notes that if Congress extends the individual tax cuts that are set to expire at the end of 2025— as Republican leaders have said they plan to do—debt would grow even faster. Lawmakers set those rates to expire to bring the tax bill into compliance with Senate rules that allowed it to pass using the fast-tracked, filibuster-proof reconciliation process. This outlook, CBO writes, “poses substantial risks for the nation and presents policymakers with significant challenges.” While we recognize the need to address our nation’s fiscal and demographic realities, we caution that undermining critical
programs on which older adults and people with disabilities rely—including Medicare and Medicaid—will only leave us less prepared for the challenges that lie ahead. Rising deficits must not provide cover for drastic changes to these programs, or for shifting costs onto beneficiaries. Instead, we urge policymakers to pursue balanced, fiscally responsible solutions that seek to build and maintain the health and economic security of all Americans. Read CBO’s 2018 LongTerm Budget Outlook. Read our letter to the editor of the Washington Post. Read the House Republicans 2019 budget proposal.
Kaiser Family Foundation Places Medicare Spending Trends in Historical Context This week, the Kaiser Family Foundation released a new issue brief on Medicare spending. The brief analyzes the most recent historical and projected Medicare spending data published in the 2018 annual report of the Boards of Medicare Trustees and the 2018 Medicare baseline and projections from the Congressional Budget Office (CBO). In 2017, Medicare spending accounted for 15% of the federal budget, and for 20% of total national health spending in 2016. It also accounted for 29% of spending on retail sales of prescription drugs, 25% of spending on hospital care, and 23% of spending on physician services. The brief finds that while benefit payments for each part of Medicare increased in dollar terms over these years, the share of total benefit payments represented by each part changed. Spending on Part A benefits (mainly hospital inpatient services) decreased
accountable care organizations (ACOs), medical homes, bundled payments, and value-based purchasing initiatives. In addition, they find that although Medicare enrollment has been growing around 3% annually with the aging of the baby boom generation, the influx of younger, healthier beneficiaries has contributed to lower per capita spending and a slower rate of growth in from 47% to 42%, spending on faster growth in enrollment overall program spending. Part B benefits (mainly since 2011 when the baby boom The brief also examines physician services and hospital generation started becoming longer-term spending outpatient services) increased eligible for Medicare. projections, beyond the next 10 from 41% to 44%, and spending Kaiser Family Foundation years, and financing challenges, on Part D prescription drug attributes the slower growth in and concludes that Medicare benefits increased from 11% to Medicare spending in recent spending is likely to trend 14%. years to policy changes adopted higher because of growth in They also note that “recent as part of the Affordable Care both enrollment and per capita years have seen a notable Act (ACA) and the Budget costs. In addition, the report reduction in the growth of Control Act of 2011 (BCA). points to recent legislative Medicare spending compared to These changes reduced changes, including repeal of the prior decades, both overall and Medicare payments to plans and ACA’s individual mandate, as per beneficiary,” with average providers, increased revenues, contributors to this growth in annual growth in total Medicare and began delivery system spending. spending at 4.5% between 2010 reforms to improve efficiency Read the Kaiser Family and 2017. This is down from 9% and quality of patient care and Foundation issue brief. between 2000 and 2010, despite reduce costs, including
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