News of the Day ... in Perspective4/30/2005
Limits on Medicare commitment to be considered
Social Security’s commitment to retirees is bounded by wages and is loosely linked to economic productivity. The Medicare commitment, on the other hand, is open-ended.
As Medicare Trustees have shown that Medicare is unsustainable, limits must be considered. One approach is to limit growth in Medicare expenditures per enrollee to the per capita GDP. The limit could be applied only to the federal contribution so that the global limit would not directly affect fees charged by hospitals and physicians.
Expenditures exceeding the GDP limit would be transferred to beneficiaries: a feature that “would not be unnoticed.”
Applying the infamous “doughnut hole” structure to benefits has been suggested. See “Putting Limits on the Medicare Commitment” by John B. Harkey, Jr., Ph.D., http://www.healthleaders.com/news/feature1.php?contentid=66776.