I recently read a good article on the problems facing Medicare now and in the future. They are: too many baby boomers; controlling costs; and our divided health insurance system that pits Medicare beneficiaries against people under 65 in the private insurance market.

One-and-a-half million baby boomers will turn 65 every year for the next 18 years. Today, 47 million people are in the Medicare system, but that number will nearly double to 79 million by 2029.

The article appeared in The Center For American Progress newsletter and can be read in-full here.  I’ve highlighted some of the points made in the article, “What’s Driving Up the Cost of Medicare?”.   Note: [  ] means the words in brackets are mine.

**”The payment changes in the Affordable Care Act enacted last year actually do “bend the cost curve” by bringing the projected growth in Medicare spending per beneficiary well below projected per capita growth in health care spending overall.”

**”From now until 2019…  overall health spending per person is expected to increase at an average annual rate of 5.6 percent. Medicare spending will grow 3 percentage points slower.” [This means that Medicare is more efficient than the under-65 health care market.]

**”Medicare’s payments can deviate only so far from private insurers’ payments before health care providers start avoiding Medicare patients or demanding that private insurers make up for Medicare’s low rates.”

 

Okay, so this article was written by people who probably believe a single-payer system would be the way to control costs for all age groups.  Because, if the private sector can’t control costs, Medicare’s cost cutting and cost control will pit the program for seniors against private insurance for people under 65. So the idea of having two distinct insurance systems (for people under 65 and people over 65) pits one against the other.

I suppose this is why Republicans say we should just put everybody into the privately-run, for-profit health insurance system. Unfortunately, the private sector has not been very good at controlling health care costs or health insurance premium increases.  I wrote about this last year when I wrote about a study of the VA health care system:

The CBO estimates that the VA’s health care cost per enrollee grew by only 1.7 % from 1999 to 2005, which amounts to 0.3% annually. Medicare’s costs grew 29.4 % per capita over that same period, or 4.4 % per year.  In the private sector insurance market (employer and individual plans) premiums increased by more than 70% during this period.

The Affordable Care Act tries to rein in health care and health insurance costs by putting the squeeze on insurance companies and their profit margins, even while it gives them 40 million new customers. Republicans consider this to be government interference in the “free market” and  “a government take-over” of health care.

Because seniors vote, “Medicare as we know it” is probably pretty safe. The real danger might be a growing gap between  Medicare fees for service and those paid by insurance companies for under-65 patients.  Then the “Mediscare” slogans about doctors rejecting Medicare patients might become a reality.