Medicare: Pac-Man or Trainable Puppy?

By Rosenblatt, Robert | Aging Today, November/December 2010 | Go to article overview

Medicare: Pac-Man or Trainable Puppy?


Rosenblatt, Robert, Aging Today


The oldest of the baby boomers begin their Medicare eligibility in 201 1. They are the first of a wave of people, at least 3 million every year for the next two decades, who will join the ranks of Medicare beneficiaries. For the first time, there will be large numbers of families with two generations enrolled in Medicare: for example, a 65-year-old daughter and her 87-year-old mother.

There is good news and bad news. The masses of people enrolled in Medicare will have access to an astonishing array of drugs, surgeries, therapies and medical technology that will keep them healthy and strong for years. But there are no effective controls over this growth in Medicare spending. It will consume an ever larger share of the nation's economic output, with no foreseeable end.

Medicare consumed 3.5% of the nation's total output of goods and services in 2009. It could soar to 1 1% by 2084, according to actuaries who compile federal figures on Medicare. Something will happen between now and 2084 to brake the galloping spending, but nobody can yet see what it will be.

ADDING TO THE MEDICARE TAB

Any efforts to control spending are now blocked by voters who fear they won't have access to treatments and drugs, regardless of cost. In 2009, talk of Medicarerun "death panels" - a false rumor - led to an amendment in the healthcare reform law forbidding Medicare officials to consider prices when they decide whether or not to cover new treatments. Only efficacy matters. If two drugs are equally good, and one costs $10,000 per pill and another is $1,000 per pill, Medicare regulators can't insist that doctors prescribe the cheaper drug.

And benefits keep growing. The Affordable Care Act, passed in March, will give everyone on Medicare access to preventive services without co-payments or deductibles. Tests such as mammograms, colonoscopies and other procedures will be free. And medications will be cheaper for those who have hefty drug bills.

Medicare Part D, the drug program, has a "donut hole" - once patients reach a certain level of spending, they are responsible for the whole tab, until they reach their catastrophic threshold coverage. For those who fall into the donut hole next year, there is help from the Affordable Care Act: they will receive a 50% discount on any brand-name drugs they purchase.

While welcome to these beneficiaries and their families, the new benefits will add to Medicare's total tab, without any effective way to slow down spending growth.

Lavish spending has had unquestioned benefits. Older people today are healthier than their counterparts were a generation ago. There are fewer disabled people now than would have been predicted 20 years ago, according to a August 2010 study by AARP's Public Policy Institute.

"If 1984 rates had remained unchanged, 1.3 million more persons age 65 or older would have experienced a disability in 2004," the AARP study reported. …

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