NCPA - National Center for Policy Analysis

Medicare Fixes aren't Popular

March 29, 2004

According to last week's report of the Medicare Board of Trustees, new projections have Medicare going broke in 2019, seven years earlier than last year's estimate (see highlights of public trustee and NCPA Senior Fellow Thomas R. Saving).

Medicare will run out of money at the time its costs are set to explode as the nation's 77 million baby boomers join the plan, beginning in 2011. However, the new prescription drug benefit, expected to cost more than $500 billion during the next 10 years, wasn't included in the projections.

There are a number of possible solutions, say observers, but opposition has so far stymied all of them. For example:

  • In 1999, the majority of a bipartisan commission led by Sen. John Breaux (D-La.), recommended reducing Medicare spending by $100 billion during 10 years and substantially cutting the growth in future costs by giving patients a choice of private health plans with a standard benefits package, similar to the federal workers' system.
  • Other commission ideas would have raised the Medicare eligibility age from 65 to 67 and required high-income seniors to pay more.
  • Other ideas, according to the Congressional Budget Office -- such as raising seniors monthly premiums for physicians' services, uniform deductibles and 20 percent copayments for physicians' services, and limits on Medigap policies that encourage overuse -- would save $148 billion during the next decade.
  • Many fiscal conservatives propose charging well-off seniors more than the 37 percent of beneficiaries with incomes barely above poverty.

A limited means test in last year's bill requires beneficiaries to meet an income and asset requirement to qualify for subsidies. In 2007, premiums for doctor visits and outpatient care will rise on incomes above $80,000 -- potentially saving $13.3 billion, a mere pittance.

Source: Editorial, "Congress Refused to Swallow Cures for Ailing Medicare," USA Today, March 29, 2004.


Browse more articles on Health Issues