by Andrew J. Rettenmaier, Thomas R. Saving
Private Enterprise Research Center
December 06, 2012
Means testing could produce the same spending path as the Affordable Care Act (ACA) and the extension of the Medicare Sustainable Growth Rate (SGR) mechanism. The price controls in the ACA and the SGR pretend that providers will continue to take progressively less than private insurance pays and will continue to accept new Medicare patients and provide them the same quality of care. Since this is extremely unlikely to happen, policy makers must admit to the fact that to lower the taxpayer share of the Medicare bill requires that retirees must contribute more. Identifying how the increase in beneficiary spending will be distributed in future years allows workers to plan for their retirement now.