CBO on Medicare – “We need a Death Panel”
by Bruce Krasting
Doug Elmendorf over at the CBO gave a speech this morning on Medicare. I think he gave us a window into what is coming. He outlined a number of measures that would help to put Medicare on firmer footing.
The federal government will spent north of $1 trillion in 2011 for health care (7% of total GDP!). Half of that will go to Medicare. That’s a bad result. But it is nothing compared to what will happen in the coming decade. The cost of all medical treatment will rise substantially above Mr. Bernanke’s measurement of inflation and there will be many more people on the Medicare line due to the rapidly aging population. So what does Doug suggest?
Cut payments to Medicare providers for services they provide. There have already been cuts made. But they are temporary. Elmendorf wants more. This makes sense. Cutting payments to Dr’s, hospitals and service providers like nursing homes would make a big difference on the financial side. It would also make a big difference to Granny in that nursing home. It’s worth noting that Elmendorf doesn’t think this is likely to happen:
Whether the reductions will be sustained over a long period of time remains to be seen.