Punting on Medicare Reform

I just returned from lunch with Mark McClellan, MD/PhD (economics) and administrator of the Centers for Medicare & Medicaid Servicesa very smart guy. The lunch was hosted by Grace-Marie Turner of the Galen Institute and Merrill Matthews of CAHI. (Thanks for lunch, guys.) 

Dr. McClellan told the group of the success of Medicare Part D, including the fact that it has (so far) cost less than projected. 

When recognized for a question, I made the following points:

  1. Part D has contributed to a rift in the president’s base, as evidenced by an editorial in this morning’s Wall Street Journal.
  2. Though there is disagreement over the significance of Part D’s lower-than-expected spending projections, there is no question that Part D made it more difficult to meet Medicare’s already unsustainable promises. 
  3. One result of Part D is that people who would otherwise be talking about Medicare reform are talking only about whether Part D is a success. 

I asked Dr. McClellan when the president might begin pushing Medicare reform, in particular the kind of reforms discussed by the National Bipartisan Commission on the Future of Medicare in 1999. 

McClellan answered that the president’s budget proposes (a) slowing the growth of Medicare spending on hospital care, (b) requiring wealthier seniors to pay more for their Medicare benefits, and (c) having Congress create another Medicare commission to tackle the problem.

The first two proposals are both potentially helpful and woefully inadequate. The third is a punt. 

Today’s Wall Street Journal also reports that yesterday Alan Greenspan “repeated a warning to lawmakers, saying Medicare spending is unsustainable and could one day drive government debt and interest rates substantially higher.” The president has acknowledged his duty to address those unfunded liabilities. 

An anxious nation waits … and waits … and waits … .