The solution to Medicare as a driver of the Deficit
Medicare is (as President Obama said this evening, though perhaps could have phrased better) is the biggest driver of the deficit going forward.
"The deficit" (as opposed to the national debt) is how much revenues fall sort of outlays in a given year, so it is future deficits that are of interest.
The cost of Medicare in the federal budget is going to go up, up, up. That is not because of any defect in Medicare—which remains the most efficient element of the health care landscape—but due to the fact that medical costs in general are going up and will continue to do so.
(A lot of the reason the cost of medical care is going up is that "medical care" is not a well-defined item like a gallon of milk or ounce of gold. It is open-ended. Medicine advances every year and every amazing new medical advance quickly becomes part of what we think of as baseline medical care—new tests, new drugs, joint replacements, new surgeries, etc.. And rightly so.)
So the key to reducing what Medicare will do to the deficit is not to cut Medicare itself, but rather to "bend the curve" of medical costs in general.
We could make some amazing cost-saving discoveries, like that mud cures everything or that gatorade is the best chemotherapy, but that would be against trend. The trend is very much that advances in medical science are impressive as heck, but costly.
Add a demographic bulge of seniors and the cost picture is more pressing, but it is really rising health care costs that are the heart of the problem. The population bulge of baby-boomers will go up and then go down, but the cost curve will (as far as we can tell) go up and then go up more.
The only way to really bend that cost curve is single payer, but any truly universal coverage helps somewhat. ACA is better than what went before, and has bent the curve a little, but our need for single-payer will continue to be more and more mainstream in the coming decade because a fair-minded person cannot look at the issue without seeing that all those first world nations that spend only half what we do per patient happen to have some version of a single-payer system.
= new reply since forum marked as read
The new Medicare Trustees Report is out. Comparing Table IIIA-2 in this year’s report and last year’s report, we get this:
Medicare Trustees
In other words, the Medicare actuaries believe that the cost-saving provisions in the Obama health reform will make a huge difference to the long-run budget outlook. Yes, it’s just a projection, and debatable like all projections. And it’s still not enough. But anyone who both claims to be worried about the long-run deficit and was opposed to health reform has some explaining to do. All the facts we have suggest that health reform was the biggest move toward fiscal responsibility in a long, long time.
http://krugman.blogs.nytimes.com/2010/08/05/bending-the-curve/
