Bush’s Budget Presumes Slower Medicare Growth Than CBO

Predictions for Medicare growth over the next decade in President Bush's fiscal year 2003 budget plan are "unrealistic[ally]" low, according to some experts and lawmakers, the New York Times reports. Estimates on Medicare growth have "major fiscal and political implications" for the entire budget because Medicare is one of the largest federal programs. Based on HHS projections, Bush's budget predicts that under existing Medicare law, spending for the program will grow 73% in the next 10 years to $3 trillion, even though enrollment figures will "swell" beginning in 2011 and 2012 when the baby boom generation becomes eligible for coverage. The Congressional Budget Office, however, estimates that Medicare spending will double in the next decade under current policy to $3.3 trillion, $300 billion more than White House estimates. Over the past 10 years, Medicare grew by an average of 7.6% annually. The White House is predicting an annual growth rate of 5.5% over the next 10 years, while the CBO expects an average of 7% growth annually. Although the budget does not explain why lower enrollment estimates were used, an administration official said the CBO estimates expect "greater use" of services and higher inflation of medical costs than the White House budget.

By "[a]ssuming" a slower growth rate in the program, the White House budget saves money while avoiding the "political uproar" that would ensue by actually cutting the budget, the Times reports. Predicting slow or moderate growth makes it "easier" for Bush and Congress to add benefits to the program, such as prescription drug coverage. "Rapid growth," however, runs the possibility of reducing a surplus or running a deficit. Lawmakers, however, say they see "no signs" of slowing Medicare growth. Sen. Edward Kennedy (D-Mass.) questioned how growth would slow when "health care costs are going up and the number of seniors is on the rise" (Pear, New York Times, 2/6).