Sunday, April 21, 2024
Hawai'i Free Press

Current Articles | Archives

Tuesday, May 29, 2012
Pictures of America's Medicare Mess
By Heritage Foundation @ 11:26 AM :: 5188 Views :: National News, Ethics

Pictures of America's Medicare Mess

www.Heritage.org

Earlier this month, President Barack Obama sat down with world leaders at the G8 summit and bragged about his track record of supposed good governance -- how he has worked to "bring down our deficits and debt over the longer term" and made "room to take a balanced approach to reducing our deficit and debt." There are plenty of ways to shoot holes in the president's pronouncement, but there is one glaring example of where he has come up far short -- failing to address America's growing Medicare crisis.

In "Medicare at Risk: Visualizing the Need for Reform," Heritage's Kathryn Nix and John Fleming illustrate the facts about Medicare and why Washington must come to the rescue with innovative solutions to preserve the program today and into the future.

President Lyndon Johnson signed Medicare into law in 1965, creating a program that today provides health insurance to some 48 million Americans. Now, though, that program is in desperate need of reform as the United States grapples with retiring baby boomers entering the system, increasing health care costs and a status quo that simply can't be sustained.

Case in point: Medicare spending is growing faster than the rest of the federal budget, and it's the main cause of America's long-term deficits. As Nix and Fleming show, Medicare's costs are projected to shoot through the roof, surpassing Social Security, Medicaid, Obamacare subsidies and all other non-interest spending by 2050. Want more proof on how bad the situation is? By 2040, Medicare's shortfall will account for 81 percent of the federal deficit.

Here's another disturbing fact: The number of workers per Medicare beneficiary is falling dramatically. Back in 1965, there were 4.6 workers contributing to Medicare for every person receiving benefits. Today, there are only 3.3 workers, and in 2030, that number will fall to 2.3. That falling ratio is leading to the program's insolvency. And with longer life expectancy (which of course is a good thing), seniors today are collecting benefits for almost three times as long as when the program first started. That means the program is paying more benefits than ever before.

Unfortunately, the situation isn't going to get any better absent congressional action. The Medicare trustees (who issue reports on the program's fiscal stability) project that under current law, Medicare will rack up $26.9 trillion in unfunded obligations over the next 75 years. In a more likely scenario, that number soars to $36.9 trillion. American taxpayers will pay the costs, and seniors will suffer the effects of a program that's going broke.

What's that burden look like today? Working Americans pay for about 88 percent of seniors' Medicare benefits through payroll taxes. Right now, that tax rate is set at 2.9 percent, costing a median household about $1,430 in 2010. But if Congress turns to tax hikes alone to cover the deficit in Medicare Part A (which covers inpatient care in hospitals), that rate would have to go up to 5.33 percent, costing that same household $2,630 per year.

President Obama's health care plan makes things even worse for the very seniors Medicare serves. Nix and Fleming show that Obamacare cuts $421 billion from Medicare in order to pay for other programs that aren't even for seniors. On top of that, a large chunk of the Obamacare cuts come from slashing reimbursement rates for doctors, meaning that seniors' access to health care providers is at risk, with 40 percent of providers in danger of closing their doors by 2050.

It doesn't have to be this way. The Heritage Foundation's Saving the American Dream plan proposes reforms that would transform Medicare into a real insurance program that provides financial security to retirees and guarantees assistance to people who need it. Seniors will enroll in the health plans of their choice, much like Members of Congress and millions of federal employees do, and unlike today, all plans will include catastrophic protection.

The picture of Medicare's future is not a pretty one, and doing nothing about it won't improve the situation. America can't afford the status quo, and it's time for leaders in Washington to do more than talk a good game, but to actually enact reforms that make sure Medicare's promise can be kept for those who need it most.

---30---

FEATURED POSTS

QUICK HITS

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT