The recently released Medicare trustees' report predicted that the Hospital Insurance Trust Fund will become insolvent in 2026, two years later than last year's report estimated. At an AEI event on Monday morning, health policy experts discussed the causes and implications of the trustees' predictions.
Paul Spitalnic, Medicare's acting chief actuary, presented the report's findings. He explained that he considers it very likely that certain elements of current law -- namely various cuts in payments to Medicare providers -- will be overridden, causing Medicare expenditures to grow to nearly 10 percent of gross domestic product by 2085.
Chapin White of the Center for Studying Health System Change emphasized that though such cuts may be politically untenable, they would not be unreasonable. American physicians are paid much more than physicians in other highly developed countries are paid, White explained, and thus American providers could ostensibly survive on lower payments.
James C. Capretta of AEI and the Ethics and Public Policy Center emphasized that even if the cuts take effect, they will bluntly lower prices across the board without respect to quality, leaving seniors to struggle to gain access to necessary care. If we do not fundamentally change Medicare's structure, Mark Pauly of the Wharton School of the University of Pennsylvania stressed, future generations of workers will experience lower wages and higher marginal tax rates, both of which would have adverse economic consequences.
-- Catherine Griffin
Medicare spending and national health spending are growing only about half as quickly as they did before 2007. The slowdown is partly a result of the 2007–08 US recession and slow recovery, but other changes may signal more permanent relief from the rising cost of health care. Will slower spending growth provide long-term fiscal relief for Medicare? Can we avoid taking difficult policy actions to save Medicare’s trust funds?
Paul Spitalnic, Medicare’s acting chief actuary, will explain the results of this year’s Medicare trustees report. A panel of experts will then discuss how developments in the health sector will affect Medicare’s long-term future.
If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.