An ancient galaxy is churning out stars nearly 20 times as fast as its modern equivalents.
Among all the budget concerns facing the U.S., few pose as big a threat to the government‘s balance sheet as our growing health care bill. The rise in health care costs has significantly outpaced both inflation and economic growth for decades, leading to increasingly dire projections about Medicare’s long-term solvency in recent years.
Yet even as policymakers debate about ways to shore up Medicare, some promising trends suggest the government program may get a new lease on life.
Although the Medicare program’s trustees’ report says the program will remain solvent until 2024, its projections are based on assumptions that haven’t been borne out in the past.
For instance, Congress has traditionally kept reimbursement-rate cuts from taking effect, with the latest reversal overriding what would have been a 31 percent cut effective Jan. 1.
With Medicare’s expansion to include prescription-drug coverage, the program has become exposed to a new set of health costs. And as the Baby Boom generation gradually reaches Medicare age, it’ll be tougher than ever to keep costs in line.
Yet past predictions about financial trouble haven’t resulted in Medicare’s failure. Back in 1997, the Medicare Trustees‘ report set 2001 as the program’s insolvency date. But shortly thereafter, a new law was passed that cut back on the expansion of health care expenditures, extending Medicare’s viability for years.
And recently, we’ve started to see a favorable trend arise: Growth in health care spending has slowed to its lowest level in 50 years.
According to the newest data from Centers for Medicare and Medicaid Services, health-related spending rose 3.9 percent in 2011. That was the first time in more than 10 years that it rose more slowly than the overall economy grew.
What’s less clear is whether spending growth will stay subdued.
Can the Good Times Last?
Some economists believe that the slow recovery from the deep recession of 2008 and 2009 has forced many would-be patients to forgo necessary medical care due to job loss and the loss of insurance coverage. As the Washington Post reported, the number of Americans covered by private insurance fell by 8 million from 2005 to 2011 even as Medicare enrollment soared 12 million over the same period, and many of those formerly covered by employer-provided health insurance fell back on Medicaid.
Since government programs tend to pay less than private insurance for health care, a reversal of the trend away from private insurance — as the Affordable Care Act envisions — could send costs growing more quickly again.
Others, though, point to spending trends among hospitals and other health-care institutions. Knowing that reimbursement rates will be held in check, these institutions are reining in their own costs to stay profitable, suggesting that slower growth in spending could be more lasting.
What to Watch For
By David Lawder and Kim Dixon
WASHINGTON, March 5 (Reuters) – U.S. House of Representatives Budget Committee Chairman Paul Ryan is floating a plan that would force Medicare cuts onto people aged 56 and younger, breaking a campaign promise not to touch benefits for those older than 55.
The tweak is under discussion by Republicans as part of Ryan’s fiscal 2014 budget plan in order to meet an important Republican pledge to balance the federal budget in 10 years, people familiar with the plan said.
Ryan’s change would reduce expenditures slightly for the costly healthcare program near the end of the 10-year budget window. Americans now become eligible for Medicare benefits at age 65.
But it provides fresh ammunition for Democrats to attack Republicans for being too eager to put the burden of reducing deficits on those reliant on the social safety net while minimizing tax increases on the wealthy – a refrain that reverberated throughout last year’s presidential and congressional election campaigns.
As the Republican vice presidential candidate last year, Ryan deflected criticism of his plan for Medicare cuts by saying that these would not apply to those 55 or older. He and Republican presidential nominee Mitt Romney had repeatedly said this would keep the popular fee-for-service healthcare program largely unchanged for current seniors and provide a 10-year window for people to make savings adjustments as they contemplate retirement.
The change, if adopted, would cut that window down to nine years.
Ryan is expected to release his fiscal 2014 budget plan next week, with a vote on the House floor expected around mid-March.
His plan will reprise his controversial proposal to reduce Medicare spending by converting it to a voucher-like system that subsidizes the purchase of health coverage from private insurers. He proposed similar plans in 2011 and 2012, arguing that without these changes, the program would become too costly and go “bankrupt” as the massive Baby Boom generation ages.
Last year’s plan was rebranded as “premium support,” and a Republican aide on the …read more
Source: FULL ARTICLE at Huffington Post
Last year the oldest members of the Baby Boom generation turned 65 years old and millions of them are investing in mutual funds that are stealing their income.
Source: Fox Business Headlines