5-Part Working Paper Series to Challenge Medicare Program for Coming Years

Medicare spending growth is expected to increase sharply in the coming years as the baby boomer generation starts to become eligible for the healthcare program. Since 2011, about 75 million American baby boomers became Medicare-eligible and the rest of the generation will follow suit now through 2029. According to the working paper series, 20% of the population in the year 2030 is expected to be American adults over the age of 65 years.

The Center for Health Policy at Brookings and the USC Leonard D. Schaeffer Center for Health Policy and Economics came together for a half-day forum that concentrated on examining and studying the future of the Medicare program. In a 5-part working paper series, healthcare stakeholders examined trends, asked questions, and formulated proposals that would prepare the Medicare program for this incoming class of seniors.

The Health and Health Care of Beneficiaries in 2030 Report formulated The Future Elderly Model (FEM), an economic-demographic microsimulation that follows Americans 51 years and older and will predict their health and medical spending over time. According to the report, FEM will follow the individual’s health trajectories and economic outcomes instead of examining average statistics. Using the information acquired by FEM, the report sidelines a typical elderly Medicare beneficiary from 2010 next to a projected description in 2030, which demonstrates the changing demographic that may impact the Medicare program in the future.

“Understanding how Medicare spending and beneficiary demographics will likely change over the next 15 years can help policymakers explore options to strengthen and sustain Medicare,” the report stated.

The Trends in the Well-Being of Aged and their Prospects through 2030 Report suggests that programs such as Medicare and Social Security face gloomy financial prospects, as continual cut-backs in benefits to maintain payroll taxes will likely force the elderly to seek financial help from private resources in order to help pay a bigger fraction of their retirement needs. The report theorizes that the “future economic well-being of the elderly may therefore depend on their willingness to work longer and delay the age at which they rely on public programs and private savings to pay for their consumption.”

While the Medicare program of today is far better than when it was in its initial conception, researchers who authored Transformation of Medicare, 2015 to 2030, believe that limitations and shortcomings remain. This working paper takes into account the perspectives of beneficiaries, providers, administrators, and the people as it presents ideas for change regarding affordability, stability, and simplicity to the Medicare program.

The 4th working paper, Could Improving Choice and Competition in Medicare Advantage be the Future of Medicare, asserts that changes to the Medicare program are necessary in order to continue and sustain a successful program that can deliver high quality care at sustainable costs to a growing elderly population by 2030. In examining the advantages and disadvantages to Medicare Advantage (MA), the researchers suggest multiple ideas, such as bidding within MA, to strengthen the competition in the program.

The final working paper of the series, Improving Provider Payment in Medicare, asserts that providers are not responding well to the payment approaches CMS has been implementing in pilot programs. The report outlines specific areas in which the Medicare program currently needs renovation, including benchmarks, beneficiary engagement, and quality measurement.

“We envision that many providers that succeed under the reformed payment models will see it as a longer-term proposition in which they achieve a better bottom line and quality of care than if they had remained in traditional FFS [fee-for-service],” the report said.