THURSDAY, MARCH 27, 2008
Medicare Fund to Be Broke by 2019
America is aging and we are in the midst of a presidential campaign. Why this is not front page news nationwide?
From the
American Hospital Association Web site:
In its
annual report
[PDF] to Congress (Tuesday), the Medicare Board of Trustees said it continues to
expect the Hospital Insurance Trust Fund to be exhausted in 2019.
According to the report, Medicare expenditures totaled $432 billion in
2007, or 3.2 percent of gross domestic product, and are expected to reach
10.8 percent of GDP in 75 years. The report projects that general and other
non-dedicated revenues will account for more than 45 percent of program
expenditures by 2014, triggering the third annual Medicare funding
warning.
The Federal Hospital Insurance (HI) Trust Fund finances Medicare
Part A. It pays for covered inpatient hospital, home health, skilled nursing facility,
and hospice care services for persons age 65 and older and
certain persons with disabilities. The Trust Fund is financed
mainly through payroll taxes.
The Social Security fund is still
projected to be broke by 2041. That is 33 years away. That means 34-year-olds and younger cannot count on payments when they hit 67 unless Congress acts.
Reuters quotes U.S. Treasury Secretary Henry Paulson as saying:
"The longer we delay, the larger the required adjustments
will be and the more heavily the burden of those adjustments
will fall on future generations."
2019 is only 11 years away. Everyone less than 54 years old today would not have Medicare hospital care when they turn 65 if the fund goes broke.
MSNBC compares the presidential candidates on these issues:
In their position papers on reforming health
insurance both (Sen. Barack) Obama and (Sen. Hillary) Clinton use nearly the same phrase: "align
incentives for excellence," says Obama's position paper; "align
Medicare payments with performance," says Clinton's.
Both essentially promise that they will find ways for Medicare to pay for more effective treatment, without paying more money.
Both
candidates also promise that as president they would save money by "investment in electronic health information technology systems," as
Obama puts it.
Clinton
and Obama have also said they would raise the current income tax rates
on upper-income people to help pay for offering insurance to younger
and middle-aged Americans who now have none. But their health
insurance rhetoric has not focused on the dour forecast for today’s
workers who hope someday to be enrolled in Medicare.
In
contrast, (Sen. John) McCain has used grim rhetoric to depict Medicare's future.
Medicare's costs, he pointed out in a speech in Iowa last year, "are
growing astronomically faster than its financing, and leaving its
structural flaws unaddressed will hasten its bankruptcy."
All three candidates had a chance to
vote on Medicare reform last year. A bill would have raised the drug costs on the wealthiest Americans covered by Medicare. Senators Obama and Clinton voted against the idea; McCain wasn't there to vote.
Posted at 12:15:00 AM
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