How will America support its seniors?

In 2011, the oldest of the “Baby Boomer” population became eligible for enrollment in Medicare. Will the enrollment of this generation be enough to spur much talked about reform within a program whose growth currently outpaces the remainder of the entire federal budget?

Baby Boomers and Medicare spending

As the milestone year of 2011 has passed and the first of the “Baby Boomers have turned 65″, estimates show that anywhere “between 7,000 and 10,000 new beneficiaries will become eligible for Medicare enrollment each day.” Currently, Medicare represents 3.7% of Gross Domestic Product, which is almost a full percentage point higher than 10 years ago. The Medicare Trustee’s most recent report indicates a stabilization of near-term growth relative to GDP, but this estimation takes into account the 2013 cuts in physician reimbursement. Assuming these reimbursement cuts will be voted down, and most believe they will be, the spending growth relative to GDP will continue at a rate of nearly 1% every 10 years.

The Office of Actuary (OAC) for the Centers for Medicare and Medicaid Services (CMS) recently released a report concluding that “Medicare Part A’s trust will be exhausted by 2024” using conservative growth estimates. It’s extremely clear that if we are to ensure the long-term viability of support for our Nation’s most vulnerable citizens we must act now to contain spending growth.

In efforts to stabilize Medicare funding, Republicans and Democrats have posed two very different solutions.

Proposed Medicare Reform by Party


  • Cost containment
  • Overhaul of current structure
  • Stipend to alleviate the cost of private insurance premiums

  • Revenue generation
  • Maintenance of current benefits
  • Repeal tax cuts to highest earners

As Medicare faces funding shortfalls, the influx of the “Baby Boomer” population has intensified the need for reform. Whichever path is chosen, this generation has necessitated a change that will certainly impact our Nation’s health going forward.

For more information check out these links:

Projected Medicare Expenditures under Illustrative Scenarios with Alternative Payment Updates to Medicare Providers – The report mentioned from CMS Office of the Actuary.

UHC’s CMO to Discuss Baby Boomers’ Impact on Medicare at 2012 Aging in America Conference – An announcement from March that includes a few facts and figures along with information about the speaker/conference.

A Summary of the 2012 Annual Reports – The official summary of the status of the social security and medicare programs from the Social Security Administration.

A Guide to the 2012 Medicare Trustees Report – E21 contributor Charles Blahous’ take on the 2012 Annual Report from the Medicare Board of Trustees.

2012 Medicare Debate: Baby Boomers At Center Of Issue – A Huffington Post article discussing the differences between the Democrat and Repulican approaches to Medicare Reform.

2 thoughts on “How will America support its seniors?

  1. It is going to take educating seniors and soon to be seniors on the benefits of evidence-based medicine and the decision support functionality of utilization management. I have met many seniors that believe programs that manage benefits will deny them care simply because of their age – the so called “death panels.” Utilization management ensures a patient gets the most appropriate care and eliminates unnecessary procedures, which is a benefit to the patient and a benefit to all Americans as reduced expenditures ensure a sustainable program for decades to follow. Our political leaders must incorporate utilization management into their talking points, communicating how cost containment can also improve the quality of care. Hopefully political opponents will forgo using these talking points to create another commercial showing Paul Ryan pushing grandma off of a cliff.

  2. How long will it take to implement a demonstration that utilization management is a non threatening cost saving solution for Medicare. The same doctors requiring management on the commercial side are treating Medicare patients!

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