Congressional Budget Office, Experts Warn About Medicare, Medicaid Financial Situations
Congressional Budget Office Director Douglas Holtz-Eakin on Monday at the World Health Care Congress warned that cost growth in Medicare and Medicaid is "unsustainable" and will require major policy changes in the near future, Reuters/Arizona Daily Star reports.
According to Holtz-Eakin, Medicare and Medicaid currently consume 4% of the U.S. gross domestic product, but that proportion could rise to 20% in the next 50 years if changes are not made (Reuters/Arizona Daily Star, 2/1). He also estimated that prescription drugs will make up 20% of all Medicare spending within 10 years (CQ HealthBeat, 1/31).
"These current trends will not be allowed to persist," Holtz-Eakin said, predicting that lawmakers will enact a series of small changes aimed at slowing spending growth (Heil, CongressDaily, 1/31). Holtz-Eakin noted that eliminating unneeded surgery, diagnostic imaging and other services that do not result in improved patient outcomes could significantly reduce costs.
Gail Wilensky -- a former administrator of CMS, then known as HCFA, and currently a health policy analyst at Project Hope -- suggested that adjusting Social Security and Medicare to reflect increasing longevity also could help address cost problems (CQ HealthBeat, 1/31). "We have to rethink the entire retirement issue," she said (CongressDaily, 1/31).
She added that policy should be enacted to help keep people in the work force at between ages 65 and 70 (CQ HealthBeat, 1/31). Wilensky also said that Congress "lost an opportunity" to lower Medicare costs when it enacted the new prescription drug benefit in 2003 (Reuters/Arizona Daily Star, 2/1).
Urban Institute President and former CBO director Robert Reischauer, who also attended the meeting, noted that without restructuring, the Medicare trust fund will become insolvent in 2019. He offered five possible methods for controlling Medicare spending but said that "few are politically feasible," CongressDaily reports (CongressDaily, 1/31).
The recommendations include reducing benefits, restraining payments, increasing out-of-pocket payments for beneficiaries, increased provider competition and improving efficiency (CQ HealthBeat, 1/31).