Tuesday, August 4, 2015

Rapidly Rising Costs Have Been Part Of Medicare's History

See 50 Years Later, Medicaid And Medicare Still Spend Us Into Oblivion by John Daniel Davidson in The Federalist. He is director of the Center for Healthcare Policy at the Texas Public Policy Foundation. Excerpts:
"Congressional budgeters at the time (1965) thought Medicare, the healthcare program for the elderly, would cost about $12 billion by 1990. The actual cost that year was $90 billion."

"In 1965, the House Ways and Means Committee estimated that Medicaid, the jointly funded federal-state program originally meant to cover the poor, would cost $238 million in its first year. It actually cost more than $1 billion. By 1971, Medicaid spending had reached about $6.5 billion, blowing away all previous estimates."

A 1969 report read "“Expenditures under the Medicaid program have increased much more rapidly than anyone had anticipated. Between 1965 and 1970, total Federal, State, and local costs will have risen from $1.3 billion to $5.5 billion.”"

"In 1966, the administration of New York Gov. Nelson Rockefeller (an early Medicaid champion) estimated the program would cost $80 million. Three years later, the price tag was $330 million."

"In 1987, Congress estimated the Medicaid disproportionate-share hospital payments, designed to compensate hospitals that serve an especially large number of Medicaid patients, would cost less than $1 billion by 1992. The actual cost was $17 billion."

" Total Medicaid payments in the 1970 budget were projected to be $5.5 billion, a 57 percent increase from 1968. Yet enrollment was only project to increase 19 percent, from 8.6 to 10.2 million. Where was all that money going? “Though Medicaid costs are increasing rapidly, much of the increase is eaten up by inflation of medical care costs.”"

"The federal agency that oversees Medicaid recently said the cost of covering people newly eligible for Medicaid was about $1,000 more per person than expected. (Of the 5.7 million new Medicaid enrollees last year, 4.7 million were newly eligible under the ACA.)"

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