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Medicare has helped provide financial security to tens of millions of Americans over 65 for nearly half a century.

It also may be the greatest single threat to the federal budget in the coming decades.

That has forced both presidential candidates to confront the long-term fiscal challenges facing a program previously considered politically untouchable.

President Barack Obama and former Gov. Mitt Romney each have vowed not to cut Medicare benefits. Yet both have proposed capping increases in Medicare spending in coming years to the rate of growth in the gross domestic product plus 0.5% - well below Medicare's historic rate of 2.5 percentage points above GDP growth from 1975 through 2008.

Underlying both candidates' proposals is the expectation - or maybe hope - that the health care system will become much more efficient in coming decades. If that happens, patients would notice no difference in the quality of their care. But if that doesn't happen, the two candidates differ on who would bear the cost.

Under Obama's approach, the cost would be borne by the health care industry.

Under Romney's approach, one generally in line with the most recent proposals of his running mate, Rep. Paul Ryan, it would be borne largely by people covered by Medicare.

"Both are going to spend less money," said Len Nichols, a professor of health policy at George Mason University. "The difference is how, and who bears the risk."

No matter what, the proposed caps would mean hospitals, doctors, pharmaceutical companies - and nearly everyone else in an industry that makes up roughly one-sixth of our economy - are unlikely to see the kind of increases in revenue they've historically enjoyed.

Slowing the rise in health care costs means paying health care providers less, providing less care, or both, said Donald Taylor, an associate professor of public policy at Duke University.

"There's no other way to do it," Taylor said. "It's not magic. There's no magic."

Yet polls have found that a majority of Americans believe the federal budget can be balanced without cutting Medicare spending. And two-thirds of Americans believe that Medicare's benefits are worth the program's cost.

"It is the implications of the cap, when they become more well-known, that lead to the controversy, not the idea of a cap," said Robert Blendon, a professor at Harvard University and co-author of an overview of the polls in the New England Journal of Medicine last year.

"The significance is there is some recognition across both parties," he said, "that the rate (of growth) has to be slowed."

Here's just a smattering of the challenges facing Medicare:

About 42% of Medicare's cost - roughly $235 billion of the total cost of $560 billion in the 2011 fiscal year - now is funded by general tax revenues, leaving less money to reduce the federal budget deficit or fund other programs. The balance comes from payroll taxes, premiums paid by beneficiaries and other sources.

Enrollment in the program is projected to almost double from 2000 to 2030. By then, the ratio of workers to retirees is expected to fall to 2 to 1, down from 3 to 1 today.

Rising health care costs and longer life expectancies mean that people who are retired or soon will retire can expect to receive far more in benefits than what they paid in Medicare payroll taxes, according to an analysis by C. Eugene Steuerle at the Urban Institute and Stephanie Rennane at University of Maryland last year. For example, single people and couples with two incomes who earned the average wage can expect to receive about $3 in Medicare benefits for every $1 paid in payroll taxes.

Efficiency is possible

At the same time, many economists and health policy analysts contend the health care system can become much more efficient.

Earlier this month, the Institute of Medicine released a report that estimated that roughly 30% of health care spending - about $750 billion in 2009 - doesn't improve patients' health. Examples of waste included unneeded services, such as tests and procedures, excessive administrative costs and artificially high prices.

The report's estimate was in line with previous estimates that 20% to 30% of health care spending did not benefit patients.

It suggests that the growth in health care spending could be slowed without hurting the quality of care. And most people apparently support, at least in the abstract, efforts to spend health care dollars more wisely.

For example, polls show support for not paying for a more expensive treatment if a less costly one is equally effective, Blendon said.

"People do believe there are inefficiencies and poor organization," he said. "So, if the ways of saving money look like they are improving efficiency and not affecting what happens to people's lives, you could get a lot of public support."

The unknown is how quickly the health care system - a fragmented industry in which innovations often diffuse slowly - can become more efficient. But there are signs that hospitals and doctors are starting to put more work into controlling costs.

"The health care industry very clearly has received the signal from the ACA (the Affordable Care Act) and all the debate around it - and then the Ryan budget just sort of drove it home - that we as a country are going to figure out how to spend less on health care per person," Nichols said.

The health care industry has adjusted to large cuts in Medicare spending in the past. The move to pay hospitals a fixed rate for inpatient services during the Reagan administration, for example, led to hospitals quickly becoming more efficient.By vowing not to cut benefits, Obama and Romney sidestep a key question: Is everything that Medicare - and our health care system - spends money on of value?

"The heart of the cost problem really is a cultural problem, and it's our inability to ask the question, 'Is this worth it?' " said Taylor, the professor at Duke University.

We ask that question for other products and services.

"But in health care, we just seem to freak out about the question," Taylor said.

One of the reasons conservative economists back Romney and Ryan's proposal to convert Medicare to a fixed annual payment, which could be used to buy coverage from traditional Medicare or a private health plan, is it would make consumers more conscious of costs.

Slowing the rise in Medicare spending will entail trade-offs, and not all of them will be painless. Whether a test or procedure is needed often isn't clear cut. The same goes for whether a less costly treatment is equally effective as one that costs more.

Taylor contends that Americans must ask three questions about their care: Does it extend life? Does it improve the quality of life? What does it cost?

"You really need to know all three of those to even be able to frame the question of 'Is it worth it?' " he said. "I'm not saying it's simple to answer the question. I mean, it's hard as hell. It'll be controversial, and we'll get it wrong and we'll make mistakes and people will disagree."