NCPA - National Center for Policy Analysis


December 15, 2009

Any plan to expand Medicare, which is the government's largest public plan, beyond its current scope does not solve the nation's health care crisis, but compounds it.  We need to fix Medicare by moving it to a system that pays for value -- quality health outcomes that are affordable over time -- and ensures its success, before bringing more people into a broken system, says the Mayo Clinic.

For instance:

  • Expanding this system to persons 55 to 64 years old would ultimately hurt patients by accelerating the financial ruin of hospitals and doctors across the country.
  • A majority of Medicare providers currently suffer great financial loss under the program. Mayo Clinic alone lost $840 million last year under Medicare.
  • As a result of these types of losses, a growing number of providers have begun to limit the number of Medicare patients in their practices.
  • Despite these provider losses, Medicare has not curbed overall spending, especially after adjusting for benefits covered and the cost shift from Medicare to private insurance.

This is clearly an unsustainable model, and one that would be disastrous for our nation's hospitals, doctors and eventually our patients if expanded to even more beneficiaries.  It's also clear that an expansion of the price-controlled Medicare payment system will not control overall Medicare spending or curb costs, says the Mayo Clinic:

  • The Commonwealth Fund has reported this result for Medicare overall by looking at two time periods -- one four-year period where Medicare physician fees increased and one four-year period where Medicare physician fees decreased.
  • Overall cost per beneficiary increased at the same rate during each time period; this scenario follows the typical pattern for price controls -- reduced access, compromised quality and increasing costs anyway.

Insurance coverage can be achieved without creating or expanding a government-run, price-controlled, Medicare-like insurance model.  Indeed, government should help people pay for insurance premiums through sliding scale subsidies as needed, says the Mayo Clinic.

Source: Blog post, "Medicare Expansion Won't Get Us There," Mayo Clinic, December 9, 2009.

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