Publications by John Holahan for Retirement Policy

At 40 percent of Medicare's and of Medicaid's costs, the 9 million dual eligibles who receive benefits from both programs, are a focus of efforts to slow growth in entitlement spending. But, given the two programs' responsibilities, policy-makers are relying far too heavily on states to find the solution. Dollars spent on dual eligibles are overwhelmingly federal; potential savings come from better management of Medicare-financed acute care services; and enhanced state, rather than federal, responsibility for overall spending increases the risk of cost-shifting to Medicare and may undermine quality of care for vulnerable beneficiaries.

Some of projected Medicare spending growth over the next decade (6.5 percent per year) can be explained by the retirement of the baby boomers; moreover, provisions in the Affordable Care Act will reduce spending per enrollee to about 3.5 percent. We agree with the analysis of the Congressional Budget Office that concluded that privatization initiatives would actually increase health care spending and shift costs to beneficiaries themselves. We argue that it is possible to reduce Medicare spending growth further by selected policies such as increasing home health co-insurance, reforming cost sharing provisions, increasing premiums for beneficiaries earning more than 300 percent of the federal poverty line, increasing the age of eligibility, reducing fraud, and better management of Medicare's dual eligibles.

The Patient Protection and Affordable Care Act will affect seniors in a number of ways. They will benefit from reductions in cost sharing for prescription drugs and for preventive services. There will however be reductions in current benefits some seniors now gain from Medicare Advantage plans and increases in premiums for high income people. Provider payment rate cuts if extended for several years could have implications for access to care. Many new provisions that will affect payment and delivery system reforms and most likely benefit seniors but could also potentially harm access to care.

In this Press-Enterprise (Riverside, California) commentary, John Holahan explains that Medicaid has done a good job of keeping costs under control and that its increase in spending is caused by the swelling number of enrollees, particularly in a weak economy. The 7 million people eligible for both Medicaid and Medicare are not dealt with in a cost-effective way, though, and transferring responsibility for them to the federal government would pave the way for health reform.

Return to list of authors.