Social Security and Medicare Outlook Improves a Bit

The trustees for Social Security and Medicare have released reports that the two programs are still losing money, but could remain solvent for longer than was previously expected. The projected solvency of the Medicare trust fund was extended by one year to 2030, while Social Security is now expected to be stable until 2041, three years longer than past projections.

President Bush and Republicans in Congress pointed to the numbers as evidence that changes should be made to the systems soon, including adding a limited prescription drug benefit. But Senator Edward Kennedy (D-MA), chairman of the Senate’s health committee, downplayed the urgency, saying “these estimates discredit [the administration’s] claims that Medicare needs radical surgery to privatize the program and force senior citizens into HMOs.”

Social Security is expected to have to dip into its trust funds by 2017 because it will begin paying more benefits than it collects in payroll taxes. Under the latest projections, Medicare will be forced to dip into its trust fund by 2016. The trustees of both programs cautioned that even though these latest projections show a slight improvement, they don’t hide the fact that both Medicare and Social Security are not prepared for the retirement of the baby boomers.

Under the present shortage of skilled nurses, nursing homes are having trouble keeping their facilities staffed. But new regulations proposed by the Centers for Medicare and Medicaid Services (CMS) could help ease that strain a bit.

Current regulations allow only certified nurses to help nursing home residents eat. The new regulations would instead allow assistants to feed nursing home residents after completing training. Each assistant would be required to learn the Heimlich maneuver, resident rights, communication, and infection control. Family members and volunteers would not be required to take the training.

Feeding assistants would not count toward minimum staffing requirements, and states would have the option to implement the regulations.

The Department of Health and Human Services is warning Americans of the risks of “pre-diabetes,” a condition affecting nearly 16 million Americans that sharply raises the risk for developing type 2 diabetes and increases the risk of heart disease by 50%. Research shows that most people with pre-diabetes will likely develop diabetes within a decade unless they make modest changes in their diet and level of physical activity, which can help them reduce their risks and avoid the debilitating disease.

HHS is using the term “pre-diabetes” to describe an increasingly common condition in which blood glucose levels are higher than normal but not diabetic—known in medicine as impaired glucose tolerance or impaired fasting glucose.

Drug Stores Threaten to Pull Out of Medicaid


With a number of states planning to cut the amounts they pay to pharmacies for filling Medicaid prescriptions, drugstores are threatening to refuse to serve Medicaid patients if those plans are carried out.

Medicaid consumes about 20% of the average state budget, and many states are facing fiscal problems that need solutions. When a Medicaid participant gets a prescription filled, the state generally pays the pharmacy for the cost of the drug plus a flat fee. But sixteen states—including Arkansas, Colorado, Connecticut, Idaho, Illinois, Indiana, Maryland, Mississippi, Montana, Nebraska, North Carolina, Ohio, Oklahoma, South Carolina, Virginia, and Washington—are considering cutting reimbursements to pharmacies.

CVS and Walgreen’s, the largest drugstore chains in the U.S., said they would reduce hours, close stores, and halt expansion in any states that cut pharmacy payments. But Rite Aid and Albertsons have threatened to drop Medicaid completely in those states.

Source:Associated Press 3-11-2002

National Notes

Healthcare Spending to Double Between 2000 and 2011


Healthcare spending in the United States is projected to reach $2.8 trillion in 2011, up from $1.3 trillion in 2000, according to a report by the Centers for Medicare & Medicaid Services (CMS). The CMS report projects that for the entire 2001-2011 period, health spending is expected to grow at an average annual rate of 7.3%.cvs

Following an initial acceleration in 2001, Medicare and Medicaid spending are expected to moderate greatly. By 2003, annual Medicare spending growth is expected to fall 5.5 percentage points to 4%, and annual Medicaid spending growth is expected to fall 3.5 percentage points to 7.8%.

The growth in prescription drug spending is expected to decelerate from 17.3% in 2000 to 10.1% for 2011. However, prescription drugs will still remain the fastest growing health sector, nearly doubling its share of health care spending during this period.

Nursing home spending is projected to accelerate more sharply than previously anticipated in 2001, as the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) dramatically added to projected Medicare spending. The expiration of some of these BIPA provisions is expected to cause a sharp drop-off in growth in 2003. Overall, total nursing home expenditure growth is expected to average 5.5% per year during 2001-2011.