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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.
James C. Capretta, Ethics and Public Policy Center and AEI
Mark Pauly, University of Pennsylvania
Paul Spitalnic, Centers for Medicare and Medicaid Services
Chapin White, Center for Studying Health System Change
Joseph Antos, AEI
For more information, please contact Catherine Griffin at [email protected], 202.862.5920.
For media inquiries, please contact [email protected], 202.862.5829.
Joseph Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at AEI. He is also a member of the Panel of Health Advisers for the Congressional Budget Office and recently completed two terms as a commissioner of the Maryland Health Services Cost Review Commission. His research focuses on the economics of health policy, including Medicare and broader health system reform, health care financing and the budget, health insurance regulation, and the uninsured.
James C. Capretta has spent more than two decades studying American health care policy. As an associate director at the White House's Office of Management and Budget from 2001 to 2004, he was responsible for all health care, Social Security, and welfare issues. Earlier, he served as a senior health policy analyst on the US Senate Budget Committee and the US House of Representatives Committee on Ways & Means. Capretta is also concurrently a fellow at the Ethics and Public Policy Center. At AEI, he is researching how to replace the Patient Protection and Affordable Care Act (best known as Obamacare) with a less expensive reform plan to provide effective and secure health insurance to working-age Americans and their families.
Mark Pauly is the Bendheim Professor in the Department of Health Care Management; professor of health care management and business economics and public policy at the Wharton School; codirector of the Roy and Diana Vagelos Life Sciences and Management Program; and professor of economics in the School of Arts and Sciences at the University of Pennsylvania. A former commissioner on the Physician Payment Review Commission, Pauly has served on the advisory committee to the Agency for Health Care Research and Quality and on the Medicare Technical Advisory Panel. Pauly is a coeditor-in-chief of the International Journal of Health Care Finance and Economics and an associate editor of the Journal of Risk and Uncertainty. He is most recently the author of “The Real Burden of Tax Financed Medical Care in the United States,” which was published in the Tax Law Review in 2012.
Paul Spitalnic is the acting chief actuary for the Centers for Medicare & Medicaid Services (CMS). Spitalnic joined CMS in 2003 and led the actuarial efforts to implement the new Part D program. Since 2006, he has been director of the Parts C & D Actuarial Group, where he has responsibility for the review of Medicare Advantage and Part D plan bids, preparing budget and cost estimates for the Parts C and D programs, and calculating the Medicare Advantage benchmark rates. Before joining CMS, he worked as a consulting actuary focusing on retiree health insurance issues. Spitalnic is an associate of the Society of Actuaries and a member of the American Academy of Actuaries.
Chapin White, senior health researcher at the Center for Studying Health System Change (HSC), studies the likely impacts of various aspects of health reform, including changes in Medicare payment policy and regulation of the individual and small-group insurance markets. His earlier work focused on microsimulation modeling of health reform, long-term trends and geographic variation in health spending, medical malpractice, and nonprofit hospitals. Before joining HSC, White was a principal analyst at the Congressional Budget Office (2005–10), where he received the Director’s Award in 2010 for his contributions to the modeling of health reform.