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Critics’ Misleading Attack on “Misleading” Medicare Report

August 16, 2010 at 5:46 PM

Sunday’s New York Times op-ed by Stanford Ross and David Walker (“Misled on Medicare”) charges that the latest Medicare trustees’ report on the program’s finances is misleading.  In fact, it’s Messrs. Ross and Walker who are telling only part of the story.

They allege that the trustees report is “based on unreasonable assumptions that produced unrealistic and misleading results.”  But those assumptions are simply that the new health reform law — which strengthens Medicare’s short- and long-term finances — will take effect as enacted.

Trustees’ reports have always assumed that the laws of the land will be implemented, rather than hazard guesses about how future Congresses might change those laws.  Gail Wilensky, who administered Medicare under President George H.W. Bush, said just that at an American Enterprise Institute forum on August 6:

“The convention is that we use current law.  That makes sense as long as people understand that’s what the convention is.  It would be very hard to know what you would use if you didn’t use current law — whose view of the future we would use.”


Messrs. Ross and Walker ask that the trustees’ report also include “a more realistic” estimate that assumes only some of health reform’s Medicare savings will materialize.  But that’s exactly what the trustees did.  As they write on page 3, “Where possible, we illustrate the potential understatement of Medicare costs and projection results by reference to an alternative projection.”  In fact, Ross and Walker’s column cites figures from that projection.

Even under the alternative projection, health reform would extend the life of Medicare’s Hospital Insurance Trust Fund by 11 years (compared to 12 years under the trustees’ official projection) and close half of the fund’s shortfall over the next 75 years (compared to four-fifths under the official projection).  (For more on the trustees’ report, see my file type icon new paper .)

As president of the Peter G. Peterson Foundation, Mr. Walker has been in the forefront of efforts to convince Congress to make the hard choices needed to reduce future federal budget deficits.  Now that Congress has enacted health reform legislation that takes major steps in that direction, it ill becomes him to argue that the law should not be taken seriously because it is “highly controversial.”