The Actuary starts by stating:
In the 2010 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, the Board warns that “the actual future costs for Medicare are likely to exceed those shown by the current-law projections.” The Trustees Report is necessarily based on current law; as a result of questions regarding the operations of certain Medicare provisions, however, the projections shown in the report do not represent the “best estimate” of actual future Medicare expenditures.
The data can be shown below. First we plot Part B numbers:
Note the difference. The Actuary estimates an almost 2X difference from the Trustee Report. The Trustee and Administration estimates can be achieved if and only if the Government somehow gets rid of half the people over 65! Perhaps "death panels" was too kind a phrase.
Now let us look at the total:
The total as above looks no different. The Actuary is making realistic assumptions rather than the political types seeking to keep their jobs.
The Actuary concludes:
The immediate physician fee reductions required under current law are clearly unworkable and are almost certain to be overridden by Congress. The productivity adjustments will affect other Medicare price levels much more gradually, but there is a strong likelihood that, without very substantial and transformational changes in health care practices, payment rates would become inadequate in the long range.
As a result, the projections shown in the 2010 Trustees Report for current law should not be interpreted as our best expectation of actual Medicare financial operations in the future but rather as illustrations of the very favorable impact of permanently slower growth in health care costs, if such slower growth can be achieved. The illustrative alternative projections presented here help to quantify and underscore the likely understatement of the current-law projections shown in the 2010 Trustees Report.
While the significant improvements in Medicare‟s financial outlook under the Affordable Care Act are welcome and encouraging, expectations must be tempered by awareness of the difficult challenges that lie ahead in improving the quality of care and making health care far more cost efficient. The sizable differences in projected Medicare cost levels between current law and the illustrative alternative scenario highlight the critical importance of finding ways to bring Medicare costs—and health care costs in the U.S. generally—more in line with society‟s ability to afford them.
Terrifying!
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