What lies ahead for Medicare now that election results are in?
Two words sum up the short-term outlook: cost cutting.
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Down the road, a more ambitious and difficult task awaits: restructuring the program and realigning its incentives to create a lower-cost, higher quality, more sustainable health care system.
What isn’t on the horizon is a radical overhaul of Medicare along the lines that the Republicans proposed. Converting Medicare to a premium-support model isn’t going to happen, at least not any time in the foreseeable future.
Just after the election, AHCJ asked three distinguished experts – Karen Davis of the Commonwealth Fund, Joseph Antos of the American Enterprise Institute and John Rother of the National Coalition on Health Care – to weigh in on the outlook for health programs that serve seniors. Medicare held center stage during most of that web chat.
All three experts said that traditional Medicare isn’t sustainable and that a top priority should be reimbursement reforms that shift the program away from “paying for volume” to “paying for value.”
Although Medicare spending per capita has slowed, total spending will soar as tens of millions of baby boomers become eligible for the program, putting intense pressure on the federal budget, said Davis, president of the Commonwealth Fund.
With a 27 percent cut in Medicare reimbursement for physicians due to go into effect in January, the most immediate task for legislators is averting that, panelists agreed.
Next will come dealing with the “fiscal cliff” (a package of automatic tax hikes and spending cuts) that could throw the country into another recession, according to the panel. While an end-of-the-year deadline looms, that will surely be extended into next year, the panelists predicted.
“A key issue is whether Medicare and entitlement reform” will be part of these “fiscal cliff” discussions, Davis said. “Short term savings” in Medicare above and beyond those already proposed by the administration will likely be a focus, suggested Rother, president of the National Coalition on Health Care.
(President Obama had previously announced plans to cut projected increases in Medicare spending by $716 billion over a 10 year period. That’s now a floor for cuts that will be upcoming.) Continue reading