Thanks in no small part to the Affordable Care Act (ACA), the 2015 Medicare Trustees Report delivers good news in the week leading up to Medicare’s 50th birthday. Medicare’s trustees find that the Medicare Hospital Insurance (Part A) Trust Fund remains solvent through 2030, with the ACA adding 13 years to its projected solvency. Shouldn’t we expand it as a health insurance choice for everyone?
At 50, Medicare is in good shape. The HI Trust Fund has sufficient funds to pay Medicare Part A claims in full for the next 15 years. The Supplemental Medical Insurance (Part B and Part D) Trust Fund is also financially sound, relying on premiums and general tax revenue to pay medical and drug claims.
Medicare continues to do a better job at reining in health care costs than commercial insurance. Spending has grown very slowly, 1.3 percent on average over the last five years. The Medicare trustees credit provisions in the ACA for this slow growth. Looking ahead to 2025, the trustees estimate Medicare per capita spending growth at 4.2 percent, lower than the growth in overall health expenditures, which they estimate at 5.1 percent.
Unlike commercial insurance premiums, Part B premiums should remain stable for the overwhelming majority of people with Medicare. That said, final premium amounts for 2016 will be set later in the year.
As expected, Medicare is delivering more than the commercial health plans, containing costs, offering people greater choice of doctors and hospitals, and driving health care system improvements. It’s time for Congress to expand Medicare so that it’s an option for people in the state health insurance exchanges. More than seven out of ten likely voters support this policy option.
A Medicare option would not only give exchange members the same choice of public and private plan options as people with Medicare, it would offer more choice of doctors and hospitals, drive down costs and lower national health care spending. In 2013, the Congressional Budget Office projected 7-8 percent lower premium costs and $158 billion in savings from a public health insurance plan over 10 years.
