Archive for Friday, August 6, 2010

Medicare fund will last 12 years longer — maybe

August 6, 2010

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— Medicare is in better shape because of President Barack Obama’s sweeping health care overhaul and will stay afloat a dozen years longer than earlier projected, trustees forecast Thursday. But that depends on cuts in care that the system’s top analyst says are highly doubtful.

The annual report by the trustees who oversee Medicare and Social Security, led by Treasury Secretary Timothy Geithner, gives backers of the new health care law evidence of a positive impact on government entitlement programs, but it also undercuts the findings with a host of caveats.

In what amounted to a dissenting opinion, top Medicare actuary Richard Foster warned that the report’s financial projections “do not represent a reasonable expectation” for the hospital fund for America’s elderly.

Kathleen Sebelius, secretary of health and human services and one of the trustees, said they were required to assume current law in making their projections, including a cut in Medicare payments to doctors. She, too, doubted the cuts would ever happen, “which is why we continue to provide cautionary notes” in the report.

The trustees projected the Medicare Hospital trust fund would be exhausted in 2029, or 12 years later than estimated last year.

The news wasn’t as rosy for Social Security, which will pay out more in benefits than it collects in taxes for the first time in decades this year and next year. The Social Security trust funds are expected to be exhausted in 2037, the same date as in last year’s report.

More bad news for Social Security recipients: The trustees project no cost-of-living increase for Social Security recipients next year, the second year in a row with no increase. The adjustments are based on inflation.

Comments

Liberty_One 4 years, 8 months ago

"the Medicare Hospital trust fund would be exhausted in 2029" "The Social Security trust funds are expected to be exhausted in 2037"

We've known about this for a long time, and these are the government numbers so you know it'll probably happen even sooner. My younger sister is in her mid-twenties and landed a well-paying job. She was complaining about how much was being taken out of her paycheck now that her income is growing, and I pointed out these two things above--that by the time she's old enough to collect neither will be there any more. She asked the most poignant question that all young Americans who learn of this are asking:

"Why should I pay for it then?"

George Lippencott 4 years, 8 months ago

Good point.

SS is in part an income transfer program. About half of the people on it have no other income and paid in far less than they will take out (subsidized by those who pay in more). What will we do if there is no enforced savings - as SS is? The fix is easy. Raise the retirement age a year or two and tax the rich (they do not pay on income above about $100K).

Medicare has two components. The pre-paid hospitalization account is broke. I don't know how to fix it as a lot of the costs are income transfer costs and other spending not associated with the basic intent) The general medical account is pay as you go. It is also means tested. We can preserve that part of the program by charging more (not a whole lot more)

With minimal impact, we can preserve the essence of these programs for your younger siblings.

Medicaid (not the same as Medicare) is aid to the lower income segment of our society. It has always been paid from general tax funds. We have in fact expanded it under Obama Care. It is seriously means tested.

The study is so flawed as to be meaningless. There are no savings to reap and you cannot use the non-existent savings to pay for both the Medicaid expansions and to fund the total program. Our federal lawgivers know that and can only be deemed total liars with the claims associated with this study. Why would they make such claims – to justify Obama Care by lying??

kernal 4 years, 8 months ago

I've encountered too many people who would not need to be on Medicare if they took better care of themselves; their doctors should be more adamant about that with their patients as well as Medicare/Medicaid. Before anyone goes into a tizzy, the majority of people on Medicare and Medicaid do need to be on it such as children, disabled adults and the elderly. To survive, Medicare should consider denying benefits for obese related maladies to folks under the age of sixty-six as many of those diseases are preventable, such as adult onset diabetes. Also, too many people on Medicare and Medicaid as a result of drug and alcohol abuse; that needs to stop as well. We have become a nation of enablers.

jmadison 4 years, 8 months ago

Most health plans stop providing coverage at 65, with the government sponsored Medicare program assuming coverage. Many seniors would prefer to continue their private health coverage, but if you are over 65, you are stuck with Medicare as the only option for health care.

In addition, Secretary Geithner used a projection of a steady 6% GDP during the years covered. In view of the current administration's ability to predict economic activity, one would be hard pressed to believe any of their projections.

George Lippencott 4 years, 8 months ago

In addition our lawgivers have used Medicare as a vehicle to meet their promised obligations to about half of their employees. Messing with it breaks faith big time. For all of you pushing government options remember what the government gives the government can take away (and in Great Britain, they are).

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