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News of the Day ... in Perspective


Medicare/Medicaid costs alarm Congressional Budget Office

CBO Director Douglas Holtz-Eakin warned the World Health Congress, attended by 1,400 health industry executives, that increases in Medicare and Medicaid costs are unsustainable. Policymakers will be forced to make major changes.

These two programs now consume 4% of the U.S. GDP. If present trends continue, that would rise to 20% within 50 years.

Within 10 years, Medicare and Medicaid will cost more than Social Security, and the three programs combined are projected to account for more than half of all federal spending.

A decade from now, 20% of Medicare spending will go for the new prescription drug benefit, slated to take effect in January, 2006.

Congress “lost an opportunity” to lower costs when it passed the drug benefit in 2003, said Gail Wilensky, former head of Medicare and Medicaid (Reuters).

Additional information:

“Meanwhile, Back to Medicare Central Planning,” AAPS News Washington, D.C., supplement, January 2005.

Crumbling Medicare Foundation will Topple with Addition of Drug Benefit New Benefits Should be Delayed, AAPS Press Release, Mar 23, 2004

An Open Letter to Congress on the Medicare Drug Benefit

AAPS proposal for Medicare reform

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