$36.3 Trillion Medicare Shortfall Can Be Fixed, Experts Say
July 10, 2008 - 5:07 PMExperts on Capitol Hill on Wednesday discussed the future of Medicare and, in part, how to eliminate the $36.3 trillion budget shortfall projected over the next 75 years.
Len Nichols, director of health policy at the liberal New America Foundation, told Cybercast News Service that the chances of eliminating the entire debt are bleak, but not hopeless.
“Fundamentally, all of us are about trying to bend that cost-curve. Now, are we going to get that debt to zero? Probably not,” he said. “But I don’t think it’s hopeless. I submit that doing things like linking payments to health outcomes is the only American way to bend that cost curve, and I think we can do it.”
In addition to explicit financial incentives for improved performance by health care providers, Nichols, who supports mandated universal health care, added that if Medicare starts providing good health care, Americans should be willing to pay a little more for the program.
“As long as we are making people better off – and healthier – we may be able to pay more as we go forward,” he said.
But eliminating the Medicare debt should be possible by applying free-market principles to Medicare, according to John C. Goodman, president and CEO of the conservative National Center for Policy Analysis.
Goodman told Cybercast News Service that if government-provided health care is opened to the free market, a resulting drop in prices for medical goods and services could translate into a monumental reduction – if not elimination – of the projected debt.
“People respond to incentives,” he said. “We have to make it so that when people make the right decision they benefit from it. I would rather see individuals making their own decisions.”
Goodman said that if the price for Medicare is reduced to zero, some people will take MRIs for trivial matters such as minor headaches.
The event was hosted by Rep. Paul Ryan (R-Wis.), ranking Republican member of the House Budget Committee, who recently introduced a bill that gives “permanent solvency” for the projected debt.
Ryan’s plan would allow individuals to receive a payment from the government if they will become responsible for finding their own health care insurance.
Ryan said the bill, which is similar to that of GOP presidential hopeful Sen. John McCain (R-Ariz.), would provide tax credits of $2,500 for individuals and $5,000 for families to purchase insurance.
“The system, which is an actual bill I have introduced, makes the program permanently solvent,” Ryan said.
According to the “2008 Annual Report of The Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,” the federal government will need to find $36.3 trillion in current dollars above and beyond what is already budgeted for Medicare to pay for promised benefits for current and future senior citizens over the next 75 years.
That cost amounts to $320,000 for every American household, according to Robert E. Moffit, director of the Center for Health Policy Studies at The Heritage Foundation.
Ryan said his bill is necessary because the skyrocketing cost of Medicare is putting the future prosperity of Americans at risk.
“We know for a fact that unless we get our hands on these (Medicare) issues, we will not have a more prosperous future and the next generation will not be better off and will not enjoy a better living standard,” he said.
“If we continue to consign them with debt, as we do in the current trajectory, they will not have a better future,” the congressman added.