News: Draft chapter details Medicare’s projected financial future, MedPAC members concerned
Members of the Medicare Payment Advisory Commission (MedPAC) gathered for a presentation by MedPAC senior analyst Rachel Burton, MPP, and discussed a draft chapter from its upcoming March 2023 Report to the Congress that describes Medicare's overall financial situation. The comments made by MedPAC members following the presentation included responses like “Shock and awe,” and “Almost like reading a dystopian science fiction novel,” Medpage Today reported.
Notable findings Burton presented include:
- 75% of U.S. COVID deaths thus far have occurred in patients over 65
- End-stage renal disease patients (who are also covered by Medicare at any age) have been six times more likely to be hospitalized for COVID-19 than older beneficiaries
- Medicare beneficiaries who died of COVID-19 in 2020 tended to be high-cost beneficiaries with multiple medical conditions; in result, the remaining beneficiaries are estimated to be 2% less costly on average
- The projected insolvency of Medicare’s Hospital Insurance Trust Fund is now delayed to 2028, thanks to higher-than-expected Medicare payroll tax revenues
- Medicare spending is expected to double in the next 10 years
- The number of workers paying into Medicare through their taxes continues to drop: in 1970 more than 4.5 workers paid taxes per Medicare beneficiary enrolled in Medicare Part A; in 2021, that has dropped to 2.9 workers.
To help the Medicare Hospital Trust Fund remain solvent for another 25 years, Burton recommended the government either raise the percentage of the salary workers’ pay from 2.9% to 3.66% or decrease Medicare Part A spending by 16.9% (about $69 billion per year). The draft chapter also stated that private plans were paying better rates to providers than Medicare, creating concern that providers will stop taking Medicare patients. Lastly, it discussed the continuation of healthcare providers consolidating and the possible effects, both negative and positive.
Commission Chairman Michael Chernew, PhD, ended the session by reminding commissioners that "our challenge is not to solve all of the fiscal problems within the [Medicare] program or to make decisions about whether we should solve those by payment approaches or by revenue-increasing approaches," but instead is to ensure that beneficiaries have access to high-quality care.
Editor’s note: To read Medpage Today’s coverage of this presentation, click here.