Analysts Pen Op-Ed Arguing Medicare Will Have $100T Shortfall in Long Term

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Two economic policy analysts wrote an op-ed in the Wall Street Journal Monday that walloped last month's Medicare Trustees report, arguing the Trustees' claims of greater solvency for the program are inflated, improbable and reliant on "draconian" cuts to provider fees.

Authors John Goodman, president and CEO of free-market think tank National Center for Policy Analysis, and Laurence Kotlikoff, PhD, Boston University professor of economics, claimed even the Trustees' projection of a $34 trillion deficit to the program 75 years from now is optimistic. More likely, they argued, there will be $100 trillion in red ink in the long term.

The discrepancy between estimates and the probable future of the program fall on several miscalculations, oversights or "spin" from the Obama administration, they wrote. Mr. Goodman and Dr. Kotlikoff said the Congressional Budget Office's anticipated 25 percent fee cuts to physicians from the sustainable growth rate is unlikely, since Congress has overridden the SGR every year since its inception in 1997.

Secondly, the authors claimed the CBO figures calculate a healthcare spending growth rate just 0.04 percent above GDP growth in perpetuity, rather than what they wrote is more accurately 2 percent faster than the U.S. economy.

The only way to realize the savings when these other anticipated factors fail, the authors argued, would be to cut physician payments to 40 percent of private insurance rates by 2030 for physicians, or 60 percent of commercial rates for hospital inpatient treatments.

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