BusinessWeek, October 26, 2011

Congress's supercommittee, which is charged with cutting $1.5 trillion from the federal budget over the next decade, can't prudently fulfill its mandate without tackling Medicare costs. The federal health program for older Americans cost $469 billion in 2011, chewing up more than 12 percent of the federal budget. Its annual growth rate -- 4.7 percent per beneficiary during most of the past decade -- is unsustainable. The Urban Institute calculates that, without changes to the program, a couple turning 65 in 2030 is likely to collect $527,000 in benefits after having paid as little as $87,000 in Medicare taxes. On the plus side, Medicare is inefficient enough that real savings are there to be had. Some involve trimming needless expenses at the margins. Others will require realignments in delivery of care and in payments to make the system smarter and to stretch the government's dollars further.

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