Fix Health Care Policy

Medicare: Admitting You Have a (Structural) Problem Is the First Step

A new study by the Urban Institute reconfirms a vital fact: Medicare’s massive increase in enrollment, largely attributable to retiring baby boomers, is driving its fiscal instability.

This is an important finding, because during the health care debate of 2009, advocates of Obamacare insisted that excess health care cost inflation was the more urgent problem contributing to Medicare’s fiscal nightmare. A recent report by Charles Blahous, a public trustee for Medicare, explains:

This viewpoint increased in prominence when Peter Orszag, one of [Obamacare’s] leading advocates, was named to head the Congressional Budget Office (CBO). Soon thereafter, CBO published a frequently cited graph that appeared to substantiate the view that the fiscal problems created by excess health care inflation dwarfed those arising from other known sources of fiscal strains, such as population aging.

So the primary target of Obamacare was Medicare payment reduction, not structurally modifying Medicare to absorb the large enrollment increase in the coming years.

(Read the rest on The Foundry…)

Tags: cost inflation, fiscal instability, Medicare enrollment, ObamaCare, Urban Institute