Lawmakers, Policy Experts Question Slow Growth Rate for Medicare in Bush’s FY 2003 Budget Proposal
Medicare growth rate predictions for the next decade in President Bush's fiscal year 2003 budget plan are "unrealistic[ally]" low, according to some experts and lawmakers, the New York Times reports. Estimates on Medicare's growth rate have "major fiscal and political implications" for the entire budget because Medicare is one of the largest federal programs and growth rates are used to determine funding for the program. Based on HHS projections, Bush's budget predicts that under existing Medicare law, spending for the program will grow 73% in the next 10 years to $3 trillion, even though enrollment figures will "swell" beginning in 2011 and 2012 when the baby boom generation becomes eligible for coverage. The Congressional Budget Office, however, estimates that Medicare spending will double in the next decade under current policy to $3.3 trillion, $300 billion more than White House estimates. Over the past 10 years, Medicare grew by an average of 7.6% annually. The White House is predicting an annual growth rate of 5.5% over the next 10 years, while the CBO expects an average of 7% growth annually. Although the budget does not explain why lower growth rate estimates were used, an administration official said the CBO estimates expect "greater use" of services and higher inflation of medical costs than the White House budget.
Lawmakers 'Puzzled'
By "[a]ssuming" a slower growth rate in the program, the White House budget saves money while avoiding the "political uproar" that would ensue by actually cutting the budget, the Times reports. Predicting slow or moderate growth makes it "easier" for Bush and Congress to add benefits to the program, such as prescription drug coverage. "Rapid growth," however, runs the possibility of reducing a surplus or running a deficit. Lawmakers, however, say they see "no sign" of slowing Medicare growth. Sen. Edward Kennedy (D-Mass.) questioned how growth would slow when "health care costs are going up and the number of seniors is on the rise" (Pear, New York Times, 2/6).
Senior Population To Increase
Meanwhile, the U.S. Census Bureau released a report on Feb. 6 that estimates that the country's population of individuals ages 65 and older may increase by 80% by 2025, the AP/Milwaukee Journal Sentinel reports. At the same time, however, the population of working-age adults is expected to increase by only 15%. As a result, more seniors will be "dependent" on Medicare and Social Security, but fewer workers will be contributing to payroll taxes to fund the programs. The AP/Journal Sentinel reports, however, that it has yet to be determined "how dependent" seniors will be on the programs, as surveys indicate many "soon-to-be-seniors" intend to work past retirement age. John Haaga, a demographer with the Population Reference Bureau, asked, "Are a lot of these 65-and-overs still going to be active and working and not really dependent at all? ... That's the big question." The census taken last year found that 35 million people are 65 years old and older, with 9.2 million people who are 80 years old and older (AP/Milwaukee Journal, 2/6). The report, which compared the United States' aging trends to those of other countries, is available online.
