Philadelphia Inquirer Examines Analysts’ Views on Future of Medicare

The Philadelphia Inquirer on Sunday examined analysts' reaction to the 2004 annual report released by Medicare trustees last week (Moritsugu, Philadelphia Inquirer, 3/28). The report found that the Medicare hospital trust fund will become insolvent by 2019, seven years earlier than the estimate last year. The report attributed the new estimate to increased health care costs, lower-than-expected revenue from payroll taxes and revisions to the program enacted in the new Medicare law (California Healthline, 3/26). Legislators will likely maintain the hospital trust fund in the short run with "some combination of raising taxes, borrowing money or cutting payments to hospitals," according to the Inquirer. "Tax contributions, either through payroll taxes or other taxes, will go up," Joseph Antos, a Medicare analyst for the American Enterprise Institute, said. "Right now, we want it all. We want whatever advances technology can provide, whatever the cost," Robert Reischauer, president of the Urban Institute, said. Douglas Holtz-Eakin, director of the Congressional Budget Office, said, "The growth of Medicare, Medicaid and health-care spending ... is the central domestic policy challenge of our time." According to the Inquirer, "the U.S. health-care system can't escape major, possibly wrenching, change" in the long run, with the number of Medicare beneficiaries projected to double to 84 million in 2035. "Unlike most tidal waves, this tidal wave will never recede. It is a permanent change in the demographic profile of our country," David Walker, head of the General Accounting Office, said. Lawmakers might consider limiting beneficiaries' access to expensive treatments "based on stricter definitions of need," the Inquirer reports. Beneficiaries also might be affected by slowed advances in medical technology and longer waiting times for treatment. However, Gail Wilensky, a senior fellow at Project HOPE, said that U.S. residents "are not keen on anything that steps between them and any new technology that comes." Reischauer said that the nation will "muddle along, gradually trying to restructure our health care system in ways that are unpredictable right now" (Philadelphia Inquirer, 3/28).