How is Medicare doing?

Worse than official projections suggest:

Administration officials can always be counted on to praise President Obama's health care law. But Rick Foster, the chief actuary of Medicare, offers an unvarnished assessment of how the new law affects 47 million Medicare recipients, as well as the federal deficit.

"There is a strong likelihood that the cost projections in the new trustees report under current law understate the actual future cost that Medicare will face. A strong likelihood," he says. "I've gone so far as to say that I don't think it's a reasonable projection of what will really happen." Rick Foster made a rare public appearance at the American Enterprise Institute Friday to discuss the latest projections of Medicare which are required by law.

The single greatest uncertainty in the projections are the cuts to Medicare that the administration is counting on to pay for new benefits.The Obama plan assumes health care can accomplish the same kinds of increased efficiency, or productivity improvements, usually seen on production lines -- like manufacturing cars. But few analysts believe that is possible. Joe Antos, a scholar at AEI, says, "they're productivity improvements if productivity happens. If productivity doesn't happen, they're still cuts."

And Foster adds that, "every single expert we talked [to] has told us they did not think these productivity adjustments were viable. They thought they just would not work."