Current Weather
The Spy FM

Americans’ Upside-Down View Of Medicare’s Problems

Filed by KOSU News in Health.
September 18, 2013

Medicare is big. And as America gets grayer, the health insurance program for seniors and the disabled is going to get a lot bigger — and more expensive.

About 51 million Americans were covered by Medicare in 2012, at a cost of around $574 billion, or about 3.6 percent of the nation’s gross domestic product. By 2023, about 70 million people will get health care paid for by Medicare, and their tab is expected to hit $1.1 trillion.

So what’s behind Medicare’s rising costs? There are lots of factors, but the biggies are obvious. “The growth in health spending, which affects all payers, is influenced by increasing volume and use of services, new technologies, and increasing prices,” the Kaiser Family Foundation writes in a primer about Medicare’s finances.

Americans have some ideas, too. But many of the cost factors that people think are the most important pale in comparison to those that actually are, finds an analysis of six different polls that was published in a recent issue of the New England Journal of Medicine.

Mismanagement and fraud top the list. Too little spending on preventive care is also in the mix.

“People are more worried about not getting care they need than overuse of care,” says Robert Blendon, who co-directs the Robert Wood Johnson Foundation/Harvard School of Public Health project on understanding Americans’ Health Agenda. “People don’t understand the basics about why it’s more expensive.”

Common misconceptions about how Medicare is financed have public policy implications. Most people think beneficiaries pay their own way or have prepaid care, for instance. And most people don’t quite grasp how Medicare spending is a factor in the federal budget deficit.

The reality is that Medicare recipients pay only about one-third of the cost of the benefits they get. “We think people are thinking about Medicare like Social Security,” Blendon, lead author of the analysis tells Shots. “They don’t understand why it’s such a drain on the federal budget.”

Even if things go as the trustees of Medicare assume, the program’s cost will rise to 5.8 percent of GDP in 2040 and 6.5 percent in 2087, according to a May report on the financial health of the program.

If assumptions about future cost savings, productivity gains and limits on spending don’t pan out, Medicare costs would swell to 9.8 percent of GDP in 2087, the report says.

Now it’s true that spending growth has slowed in recent years, helping to extend by two years the projected solvency of Medicare’s fund for hospital care to 2026.

And it seems pretty likely Medicare’s finances are unlikely to fulfill the rosiest scenarios, even with some tweaks made by the federal health overhaul. Doctor pay is likely to go up, for instance.

“While the substantial improvements in Medicare’s financial outlook under the Affordable Care Act are welcome and encouraging, expectations must be tempered by awareness of the difficult challenges that lie ahead in improving the quality of care and making health care far more cost efficient,” the Medicare actuary’s office wrote in May. “The sizable differences in projected Medicare cost levels between current law and the illustrative alternative scenarios highlight the critical importance of finding ways to bring Medicare costs — and health care costs in the U.S. generally — more in line with society’s ability to afford them.” [Copyright 2013 NPR]

Leave a Reply

5AM to 9AM Morning Edition

Morning Edition

For more than two decades, NPR's Morning Edition has prepared listeners for the day ahead with two hours of up-to-the-minute news, background analysis, commentary, and coverage of arts and sports.

Listen Live Now!

9AM to 10AM The Takeaway

The Takeaway

A fresh alternative in morning news, "The Takeaway" provides a breadth and depth of world, national and regional news coverage that is unprecedented in public media.

View the program guide!

10AM to 11PM On Point

On Point

On Point unites distinct and provocative voices with passionate discussion as it confronts the stories that are at the center of what is important in the world today. Leaving no perspective unchallenged, On Point digs past the surface and into the core of a subject, exposing each of its real world implications.

View the program guide!

Upcoming Events in your area (Submit your event today!)

Streaming audio and podcasts

Stream KOSU on your smartphone

Phone Streaming

SmartPhone listening options on this page are intended for many iPhones, Blackberries, etc. with low-cost software applications available to listen to our full-time web streams, both News on KOSU-1 and Classical on KOSU-2.

Learn more about our complete range of streaming services

We're perfecting the patient experience - Stillwater Medical Center