1150 Seventeenth Street, N.W., Washington, D.C. 20036
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The Medicare Trustees Report is among the most significant in the program's forty-five–year history. Congress imposed $485 billion in cuts to Medicare payments for health care services and $210 billion in new Medicare taxes to finance the expansion of health insurance. A new Independent Advisory Board will make binding
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recommendations for further cost cutting.
How will this affect seniors' access to health care? Will these policies improve Medicare?
Richard Foster, chief actuary of the Centers for Medicare and Medicaid Services, presented the findings of this year's Medicare Trustees Report. A panel discussion followed and included Joseph Antos, resident scholar at AEI; Walton Francis, an independent health policy consultant; Paul Van de Water, senior fellow at the Center on Budget and Policy Priorities; and Gail Wilensky, economist and senior fellow at Project HOPE.
| 9:00 a.m. | Registration | |
| 9:15 | Presentation: | Richard Foster, Centers for Medicare and Medicaid Services |
| Panelists: | Joseph Antos, AEI | |
| Walton Francis | ||
| Paul Van de Water, Center on Budget and Policy Priorities | ||
| Gail Wilensky, Project HOPE | ||
| 10:30 | Question and Answer |
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| 11:15 | Adjournment |
WASHINGTON, AUGUST 6, 2010--A panel of health policy experts gathered at AEI to discuss this year's Medicare Trustees Report, an annual assessment of Medicare's financial health. This year's report is particularly noteworthy following the passage of the Patient Protection and Affordable Care Act, which makes some of the most significant changes to the finances and operation of the Medicare program since its inception in 1965. Richard Foster, the chief actuary for the Centers for Medicare and Medicaid Services, stated that the financial outlook for Medicare is far better this year than it was last year due to passage of health reform legislation, but he cautioned that the improved outlook was contingent on the implementation of certain key provisions in current law, which he thought was unlikely to occur. Gail Wilensky, an economist and senior fellow at Project HOPE, argued that many of the report's assumptions are unrealistic and that the payment updates and cuts in Medicare should not be confused with real health reform. While Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities, conceded that these concerns are valid, he asserted that the landscape politically and in the public and private sectors is changing in ways that may make compliance with current law more likely. Walton Francis, an independent policy analyst and economist, stated that market forces are the only proven way to create saving in health care and that with certain provisions, the Patient Protection and Affordable Care Act makes a mistake in moving away from a market-based framework. Joseph Antos, a resident scholar and economist at AEI, concluded by pointing out that Medicare's troubled financial situation is part of a larger problem of federal debt and that the political climate will always be one in which it is more popular to increase benefits than to take them away, creating problems for our long-term fiscal situation.
- "I believe there is a strong likelihood that the cost projections in the new Trustees Report under current law understate the actual future cost that Medicare will face, a strong likelihood. I've gone so far as to say that I don't think it's a reasonable projection of what will really happen."
--Richard Foster, Chief Actuary, Centers for Medicare and Medicaid Services - "The productivity assumptions [of the report] are also very serious. And to put it in some kind of context . . . when you look out at the productivity expectations for the nonfarm part of the economy, mostly what you are seeing is productivity that is heavily associated with increased use of capital. It has historically been very difficult to have anything like these productivity increases in the service area in general and in health services in particular. So I would regard this productivity assumption as in our wildest dreams this might happen, but in any notion of reality clearly not going to happen."
--Gail Wilensky, Senior Fellow, Project HOPE
- "I think [that] despite all of the caveats that Rick [Foster] and Gail [Wilensky] have raised, and I don't really disagree with any of them, I think nonetheless it's difficult, all but impossible, to do anything but draw good news from this report. In the short run, depending upon whether one uses the current law projections or the illustrative alternative, the solvency of the HI [hospital insurance] trust fund is extended through 2028 or 2029, and the long-run deficits . . . have been reduced either by one half or as much as 85 percent, that having been done without reductions in Medicare's guaranteed benefits, and in fact some modest improvements in benefits."
--Paul Van de Water, Senior Fellow, Center on Budget and Policy Priorities
Speaker biographies
Joseph Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at AEI. He is also a commissioner of the Maryland Health Services Cost Review Commission and a health adviser to the Congressional Budget Office. Before joining AEI, Mr. Antos was assistant director for health and human resources at the Congressional Budget Office. At AEI, Mr. Antos's research focuses on the economics of health policy, including Medicare reform, health insurance regulation, and the uninsured. He has written and spoken extensively on the Medicare drug benefit and has led a team of experienced independent actuaries and cost estimators in a study to evaluate various proposals to extend health coverage to the uninsured. Mr. Antos is the coauthor of a recent AEI paper A Better Prescription: AEI Scholars on Realistic Health Reform.
Richard Foster is chief actuary for the Centers for Medicare & Medicaid Services (CMS). As such, he is responsible for all actuarial and other financial analyses for the Medicare and Medicaid programs. In addition, Mr. Foster and the staff of the Office of the Actuary prepare the widely used national health expenditure account data and projections; produce the hospital input price index, Medicare Economic Index, and other price indexes used to update Medicare payments to providers; and calculate the Medicare Advantage payment benchmarks for private health plans that contract with Medicare. Mr. Foster became chief actuary in February 1995; prior to this, he served as deputy chief actuary for the Social Security Administration for thirteen years. He is a fellow of the Society of Actuaries and a member of the American Academy of Actuaries, American Statistical Association, American Economic Association, National Academy of Social Insurance, and Senior Executives Association. He has written numerous articles and reports on Medicare and Social Security issues, and he has received a number of awards, including the University of Maryland-Baltimore County Outstanding Alumnus of the Year Award in 1997; the Presidential Meritorious Executive Award in 1998 from President Bill Clinton; the CMS Administrator's Achievement Award in 1999 and 2003; the Presidential Distinguished Executive Award in 2001 from President George W. Bush; the College of Wooster Distinguished Alumni Award in 2006; and the Robert J. Myers Public Service Award from the American Academy of Actuaries in 2006. In 2007, the readers of Modern Healthcare voted Mr. Foster the sixteenth most influential person in health care in the United States.
Walton J. Francis is a self-employed economist and policy analyst, expert in analysis and evaluation of public programs. Previously he worked at the Office of Management and Budget and in the Office of the Secretary at the Department of Health and Human Services. He pioneered the systematic comparison of health insurance plans from a consumer perspective in CHECKBOOK's Guide to Health Plans for Federal Employees, which he has authored annually for three decades. This online publication rates plans in the Federal Employees Health Benefits Program (FEHBP), which is often cited as a model for health reform. He is also the author of Putting Medicare Consumers in Charge: Lessons from the FEHBP (AEI Press, 2009). Mr. Francis has testified before Congress on Medicare reform and FEHBP reform and has worked as a consultant to the Centers for Medicare & Medicaid Services.
Paul N. Van de Water is a senior fellow at the Center on Budget and Policy Priorities, where he specializes in Medicare, Social Security, and health coverage issues. Previously he was vice president for health policy at the National Academy of Social Insurance. From 2001 to 2005, Mr. Van de Water served as assistant deputy commissioner for policy at the Social Security Administration, where he managed the agency's policy analysis, research, and statistical activities. From 1999 to 2001, he was the agency's associate commissioner for research, evaluation, and statistics. Mr. Van de Water worked for over eighteen years at the Congressional Budget Office. From 1994 to 1999, he was assistant director for budget analysis and supervised the agency's budget projections, analyses of the president's budget, cost estimates of legislative proposals, and estimates of the cost of federal mandates on state and local governments. As deputy assistant director for budget analysis from 1992 to 1994, he coordinated the Congressional Budget Office's analysis of the Clinton administration's health plan and other proposals to reform the financing and delivery of health care.
Gail Wilensky is an economist and senior fellow at Project HOPE, an international health education foundation. Most recently, she was president of the Defense Health Board. She has cochaired the Department of Defense Task Force on the Future of Military Health Care. She has been a commissioner both for the President's Commission on the Care of Wounded Warriors and the World Health Organization's Commission on the Social Determinants of Health. From 1990 to 1992, Ms. Wilensky was the administrator of the Health Care Financing Administration, directing the Medicare and Medicaid programs. In the early 1990s, she served as deputy assistant to President George H. W. Bush for policy development. From 1995 to 1997, she chaired the Physician Payment Review Commission, and from 1997 to 2001, she chaired the Medicare Payment Advisory Commission.
