The commission designated to recommend a long-term overhaul of the Medicare program said last week it believes Medicare spending will exceed official government predictions-a position that has already thrown the panel into dissension.
The commission's liberal members aren't the only ones concerned about the panel's estimates. Hospital groups also say the commission's projections are too pessimistic.
"The worse the problem looks, the greater the chance that provider payment cuts will be the focus of the commission's recommendations," said Michael Rock, senior associate director of congressional and executive branch relations for the American Hospital Association.
In an often contentious two-day meeting held last week in Washington, the 17-member National Bipartisan Commission on the Future of Medicare offered two scenarios for future Medicare spending.
The first uses the same 4.2% average annual growth rate in Medicare spending assumed earlier this year by the trustees of the Medicare Part A trust fund.
But a subcommittee of the panel said that was unlikely. Instead, the group said a more probable scenario is that beginning in about 2009 Medicare spending will increase at about the same rate it has over the past two decades, about 6.4%.
The difference in the assumptions amounts to about $760 billion in Medicare spending in the year 2030, when the baby boom generation is in the Medicare program (See chart).
The baselines are important because they define the scope of the Medicare problem and set the level of spending reductions needed to make the program solvent for the baby boom generation. The commission is scheduled to submit its recommendations to Congress by March 1, 1999.
Some of the panel's liberal members expressed concern that the more pessimistic baseline would lead the commission to recommend a more radical overhaul of Medicare. One such plan, moving the Medicare program from a defined benefit plan to a defined contribution program, is a favorite of conservatives.
"This worries me," said Rep. Jim McDermott (D-Wash.), a psychiatrist. "Statistics can always be used to make the problem less dramatic or more catastrophic."
Rep. John Dingell (D-Mich.) also expressed concern that the baselines would lead the group to accept more radical solutions.