Spurred by the bad news in the Social Security and Medicare Trustees’ Report, released a few weeks ago, James Capretta writes at RealClearPolicy:
Taken together, the combined unfunded liabilities of Social Security and Medicare are more than $50 trillion, according to official government projections. Unsettling as these estimates are, they are probably optimistic — for two reasons.
First, the Medicare projections assume deep, permanent, and on-going cuts in payment rates for physicians and hospitals that are difficult to believe will be implemented.
He then goes on to summarize the changes that are coming down the pike:
Beginning in 2026, physicians who participate in what are called “alternative payment models” can get annual fee increases of 0.75 percent, while those who don’t will get increases of 0.25 percent each year. These payment increases would be well below the expected medical inflation rate of 2.2 percent, which means physicians would get a real cut in payment rates from Medicare each and every year.
and then falls into a trap commonplace in writing about our health care system. What effect will lowering the rate of increase in Medicare reimbursements have? Will it raise non-Medicare health care prices as he asserts, will it have no effect on them, or will it slow their rate of increase, too? We have no real idea. I think that the available evidence suggests it will lower them but we don’t have a great deal of evidence available.
The second reason that both the Social Security and Medicare projections may be optimistic is the recent news of declining birth rates. Last month, the Centers for Disease Control and Prevention released data showing that the birth rate in the U.S. is now at its lowest level in 40 years. In 2017, the total fertility rate (measured as total births per 1000 women of child-bearing age) was 1.76, down from 2.07 in 2008 and far below the population replacement level of 2.1.
I think that lack of hope is the likely explanation but it’s possible that Millennials are just waiting for their millions to start rolling in before having children, for which I blame the weak state of high school education in the U. S.
As I’ve been saying for more than 20 years a single-payer system isn’t nearly enough to dig us out of the hole we’ve been digging for ourselves for the last 45 years. We need a single-payer system committed to reducing costs, something I find extremely unlikely.