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This year, the first of 40 million baby boomers turns sixty-five and enrolls in Medicare. This unprecedented demographic wave will
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practically double Medicare's enrollment over the next two decades, jeopardizing its ability to meet its obligations. An adverse economy has shortened the life of Medicare's trust fund by nine years, according to the Congressional Budget Office, and the Medicare trustees are likely to confirm that in this year's report. How serious is the problem? What steps must be taken to shore up Medicare's finances? Is Congress prepared to save the program? Richard Foster, Medicare's chief actuary, will discuss the findings of this year's Medicare trustees report. An expert panel will debate what those findings mean for seniors and taxpayers, and what actions Congress is likely to take in light of the president's reaction and recommendations from the House Budget Committee for reforming Medicare.
RICHARD FOSTER, Centers for Medicare and Medicaid Services
ROGER FELDMAN, University of Minnesota
ROBERT B. HELMS
ROBERT REISCHAUER, Urban Institute
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American Enterprise Institute
1150 Seventeenth Street, N.W.
Washington, DC 20036
Media Contact Information
American Enterprise Institute
1150 Seventeenth Street, N.W.
Washington, DC 20036
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WASHINGTON, MAY 16, 2011--The Medicare trust fund will be depleted in 2024, five years earlier than previously predicted, Richard Foster, chief actuary of the Centers for Medicare and Medicaid Services, said Monday at the American Enterprise Institute. The oncoming wave of baby-boomer retirements will strain Medicare's fiscal outlook. Foster presented details of the annual Medicare Trustees Report released last Friday, which finds that keeping the trust fund solvent for seventy-five years would require significant cuts in physician reimbursement rates. He stressed that if certain provider cuts mandated in the Patient Protection and Affordable Care Act (PPACA) are overridden by Congress, a likely scenario, costs will outpace revenue growth. Alternatively, to allow the cuts as mandated would force doctors to stop accepting Medicare beneficiaries. AEI scholar Joseph Antos was also critical of the Medicare cost-saving measures in the PPACA and said that the program--an example of "social engineering"--would fail without significant changes. University of Minnesota professor Roger Feldman in turn gave a proposal for a new system that brings competitive bidding into the Medicare system to keep costs down, especially through changes in reimbursement of technology, and ensure adequate coverage. Urban Institute president Robert Reischauer called for more emphasis on reforming Medicare in the next fifteen years, largely with a system of premium support comparable to that in Feldman's proposal.
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is chief actuary for the Centers for Medicare and Medicaid Services (CMS), responsible for all actuarial and other financial analyses for Medicare and Medicaid. Mr. Foster and the staff of the Office of the Actuary prepare the widely used national health expenditure account data and projections; produce the hospital input price index, the Medicare Economic Index, and other price indexes used to update Medicare payments to providers; and calculate the Medicare Advantage payment benchmarks for private health plans that contract with Medicare. Mr. Foster became chief actuary in February 1995; before this, he served as deputy chief actuary for the Social Security Administration for thirteen years. He is a fellow of the Society of Actuaries and a member of the American Academy of Actuaries, American Statistical Association, American Economic Association, National Academy of Social Insurance, and Senior Executives Association. He has written numerous articles and reports on Medicare and Social Security issues, and he has received a number of awards, including the University of Maryland–Baltimore County Outstanding Alumnus of the Year Award in 1997; the Presidential Meritorious Executive Award in 1998; the CMS Administrator's Achievement Award in 1999 and 2003; the Presidential Distinguished Executive Award in 2001; the College of Wooster Distinguished Alumni Award in 2006; and the Robert J. Myers Public Service Award from the American Academy of Actuaries in 2006. In 2007, the readers of Modern Healthcare
voted Mr. Foster the sixteenth most influential person in health care in the United States.
is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at AEI. He is also a commissioner of the Maryland Health Services Cost Review Commission and a health adviser to the Congressional Budget Office. Before joining AEI, Mr. Antos was assistant director for health and human resources at the Congressional Budget Office. At AEI, Mr. Antos's research focuses on the economics of health policy, including Medicare reform, health insurance regulation, and the uninsured. He has written and spoken extensively on the Medicare drug benefit and has led a team of experienced independent actuaries and cost estimators in a study to evaluate various proposals to extend health coverage to the uninsured. Mr. Antos is the coauthor of a recent AEI paper A Better Prescription: AEI Scholars on Realistic Health Reform
Roger Feldman is the Blue Cross Professor of Health Insurance and a professor of economics at the University of Minnesota. Mr. Feldman was also a Marshall Scholar at the London School of Economics. His research examines the organization, financing, and delivery of health care, with a focus on health insurance. Currently, he is evaluating the effect of consumer-directed health plans on medical care utilization and personal-savings decisions. His experience in health care policy includes serving on the senior staff of the President's Council of Economic Advisers, where he was lead author of a chapter in the 1985 Economic Report of the President. From 1988 to 1992, Mr. Feldman directed one of the four national research centers sponsored by the Centers for Medicare and Medicaid Services (CMS). He advised CMS on designing a demonstration of competitive pricing for Medicare health plans and is evaluating the competitive-pricing program for durable medical equipment in Medicare. He is also on the panel of health advisers for the Congressional Budget Office and consults for various federal and state antitrust agencies. Mr. Feldman is a regular contributor to journals of economics and health services research. His research has received four "best paper" awards from the Association for Health Services Research and the National Institute for Health Care Management.
Robert D. Reischauer, a former director of the Congressional Budget Office (CBO) and a nationally recognized expert on the federal budget, Medicare, and Social Security, began his tenure as the second president of the Urban Institute in February 2000. Previously, he was a senior fellow of economic studies at the Brookings Institution, director at the CBO, senior vice president at the Urban Institute, assistant director for human resources at the CBO, and deputy director at the CBO. Mr. Reischauer serves on the boards of several educational and nonprofit organizations. He was a member of the Medicare Payment Advisory Commission from 2000 to 2009 and its vice chair from 2001 to 2008. Mr. Reischauer is one of the two public trustees of the Social Security and Medicare trust fund. He frequently contributes to the opinion pages of major American newspapers, comments on public policy developments on radio and television, and testifies before congressional committees.
Robert B. Helms
is a resident scholar at AEI. He has served as a member of the Medicaid Commission as well as assistant secretary for planning and evaluation and deputy assistant secretary for health policy at the Department of Health and Human Services. An economist by training, Mr. Helms has written and lectured extensively on health policy and health economics, including the history of Medicare, the tax treatment of health insurance, and comparisons of international health systems. He currently participates in the Health Policy Consensus Group, an informal task force that is developing consumer-driven health reforms. He is the author or editor of several books on health policy, including Medicare in the Twenty-First Century: Seeking Fair and Efficient Reform
(AEI Press, 1999) and Competitive Strategies in the Pharmaceutical Industry
(AEI Press, 1996).
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