Sure, the long-term finances of Social Security aren’t the greatest, but when people rant and rave about the future costs of Social Security and ignore Medicare, they just really have no idea what they are talking about. The long-term fiscal committments of our country are absolutely dominated by the projected rise in Medicare spending. This is why it is so damn important to get health care spending under control (and the ACA was really just a very modest start). Anyway, here’s the chart from the title:
And here’s Dave Leonhardt from the column accompanying this:
The huge budget deficits that the country faces in coming decades are, above all, because of Medicare. The program will have to cover growing numbers of baby boomers while health costs are likely to keep going up.
It won’t be possible to pay the bill by cutting other programs. They’re not big enough. Making big cuts to everything but Medicare and Social Security — shrinking the military and other programs to their smallest share of the economy since World War II — might save $200 billion a year by 2035. But by then, annual Medicare spending is projected to grow by more than $1 trillion.
So any deficit strategy needs to focus on Medicare.
Leonhardt continues with (what strikes me as) a great proposal for keeping costs down:
In the new issue of the journal Health Affairs, two doctors, both former Medicare officials, have laid out a plan to do so. It would give expensive new treatments three years to prove that they worked better than cheaper treatments, or their reimbursement rates would be cut to that of the cheaper treatments.
I understand that the idea will strike some people as — gasp — rationing. More modest ideas were shouted down during the debate over health reform. But I’d urge anyone who does not like the doctors’ plan to think a bit about how Medicare should be changed. The status quo isn’t really an option.
We waste huge amounts of money on medical treatments that are no better than way cheaper options. That simply has to end. Leonhardt runs through some compelling examples you should read. Take away, though– our long-term fiscal health is largely about Medicare.