Future of the USA's Medicare examined in the post-McClellan era

The abrupt resignation of Mark McClellan as Administrator for the Center for medicare and Medicaid Services (CMS), which comes into effect next month (Marketletter September 11), coincides with surveys examining the success of the Medicare Part D prescription drug benefit for America's senior citizens, as well as the debate on what improvement, if any, should be made to the program.

By joining a think-tank, believed to be the free-market leaning American Enterprise Institute, Mr McClellan will have the freedom to express his views on how the Medicare modernization process has fared and what direction it should take from here. Robert Samuelson, writing an opinion column in the Washington Post newspaper, described the Medicare program as the "monster of the future," which will consume most of the increases in federal health care spending from 2000 to 2030.

Mr Samuelson's prognosis is gloomy: "now, uncontrolled health spending will dominate the federal budget and pose ugly choices: raise taxes sharply; gut other programs; and run ever-larger - and more dangerous - deficits."