If Congress had known in 1965 how expensive Medicare would become, it might not have approved the program in the first place. So Lyndon Johnson made sure it didn’t know.
He railed against his budget advisers for trying to predict the long-term costs. “The fools had to go projecting it down the road five or six years,” he complained to Sen. Edward M. Kennedy at the time. Johnson’s allies were getting nervous, according to historians David Blumenthal and James Morone, so Johnson had to hide the price tag.
And when Wilbur Mills, then the chairman of the House Ways and Means Committee, worried about how much cash would be needed to cover doctor’s services, Johnson was happy to throw more money into the mix. “Tell Wilbur that 400 million’s not going to separate us friends when it’s for health,” Johnson said.
Forty-five years later, the costs of the Medicare program have become all too obvious. Medicare is a significant part of the reason the national debt is soaring out of control. It is an indispensable safety net for millions of senior citizens and people with disabilities, who depend on it to protect them from bankrupting medical bills. But since it’s an open-ended program — with no upper limit — the nation has no similar protection to keep Medicare from bankrupting the country.
The way things are going, Medicare could do just that. With its one-two punch of rising health care costs and more seniors to cover, Medicare will eat up more and more of the federal budget in the years ahead. But it’s also politically untouchable. When either Democrats or Republicans try to suggest ways to trim the costs, they’re accused of trying to push Grandma down the stairs in her wheelchair. Republicans did it to the Democrats during the debate over the new health care law, and Democrats are doing it now, at the height of election season, as Republicans float their own proposals.
Medicare is already growing faster than Social Security, and it could become bigger and more expensive than Social Security in the next 25 years. It is also growing faster than the economy, and if that keeps up, Medicare could cause the national debt to swell up to more than two-thirds of the gross domestic product in just the next decade.
For years, experts have also warned that Medicare faces trillions of dollars in unfunded liabilities — meaning that it will have to pay trillions of dollars more than the amount of money that is coming in. In fact, last year, the Medicare trustees warned that the program was facing more than $36 trillion in unfunded obligations.
This year, the Medicare trustees said that problem has basically disappeared because of spending cuts in the new health care law. But critics in Congress and the federal government — including Medicare’s chief actuary — don’t buy it. They believe those rosy projections come from playing games with the math.
“It’s a completely unsustainable system,” said Republican Rep. Paul Ryan of Wisconsin, who could become the next chairman of the House Budget Committee if the Republicans win control of the House in November. The United States would still have to spend trillions of dollars to maintain the program as it is, Ryan said, “and we can’t do that without bankrupting the country and shutting down the economy.”
The future of Medicare is not just a partisan concern. “I understand the importance of Medicare in people’s lives. I’ve seen it in my own family,” Sen. Kent Conrad of North Dakota, the Democratic chairman of the Senate Budget Committee, said at a January hearing. “But the suggestion that we don’t have to do anything is just not being straight with people.”
Click here to read the rest of the story. This story posted on Healthcare Finance News courtesy of The Center for Public Integrity.