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Medicare will be Bankrupt in the future

Medicare:  a broken program getting worse

If you believe Medicare is a well run program then check out Medicare a Bad Model and Medicare for Dummies.  As Obama says about Medicare, it will bankrupt the Federal Government unless it is reformed.  So why is this not the focus first of reform?  Medicare is something we all have paid for with taxes, however, like any government program, the expenses do not match the revenue and with most added mandates, the problem has become much worse and the forecasts never met.  There is fraud, run away entitlement, mismanagement, and no answers coming from Obama other than to extend the basics of the programs to all Americans.  How can this make sense?

Rep. Darrell Issa (R-Ca.), the ranking Republican on the House Committee on Oversight and Government Reform, on Aug 13, 2009 released a Staff Report on the enormous fraud and waste in the Medicare systemRunaway costsThe report points out that H.R. 3200 (House Bill), the Democrats’ government-run health care bill that has been reported out of three jurisdictional committees, does not address the systemic failures that facilitate the fraud but replicates these same faulty mechanisms for fraud and waste.  As the graph at right shows, the costs of this entitlement program must be managed and not just expanded.

Jeffrey Anderson puts the cost of Medicare into perspective:  As my study for the Pacific Research Institute shows, since 1970, the costs of Medicare and Medicaid have each risen one-third more, per patient, than the combined costs of all other health care in America -- the vast majority of which is purchased privately. Medicaid's costs have risen 35 percent more, and Medicare's 34 percent more, per patient, than the combined costs of all other health care nationwide.

The costs of the two flagship government-run health-care programs have also outpaced all other nationwide health costs since 1980, 1990, and, in Medicare's case, 2000. (Medicaid's costs haven't risen much since 2000, as billions of dollars have been shifted from Medicaid to SCHIP.) Moreover, my study is quite generous to Medicare and Medicaid in a variety of ways. It counts the Medicare prescription-drug benefit among the costs of private care rather than among the costs of Medicare, it doesn't adjust for the cost-shifting from Medicaid to SCHIP, and it counts all care that is purchased privately by Medicare and Medicaid beneficiaries (including Medigap insurance and Medicare copayments) among the costs of private care without counting those who receive it among the recipients of private care. (Because Medicare's and Medicaid's enrollments have increased disproportionately over time, this magnifies private care's per-patient cost-increases.)

Despite all of these advantages, on a per-patient basis, for every $3 that all other U.S. health-care costs have increased since 1970, Medicare's and Medicaid's costs have each risen more than $4.


Background:  44M plus:  Web page growing to 90M people. Not all are over 65 years old.

Medicare enrollees16% are disabled, not over 64 yr old.

Growth:  4.8% a year from 94 -04

6% increase in spending from 94-04

Avg is 15% of population

Forecast is at right.  Medicare tax payers will reduce from near 4 people per recipient to close to 2 people per recipient.

Most physician- and hospital-reimbursement structures are based on the methodologies of the largest payer in the market, Medicare.

Medicare Future costs:  from "Status of the Social Security and Medicare Programs", Social Security online:  As we reported last year, Medicare's financial difficulties come sooner—and are much more severe—than those confronting Social Security. While both programs face demographic challenges, rapidly growing health care costs also affect Medicare. Underlying health care costs per enrollee are projected to rise faster than the earnings per worker on which payroll taxes and Social Security benefits are based. As a result, while Medicare's annual costs were 3.2 percent of Gross Domestic Product (GDP) in 2008, or about three quarters of Social Security's, they are projected to surpass Social Security expenditures in 2028 and reach 11.4 percent of GDP in 2083.

Current Obamacare proposal has an assault on Seniors, as detailed by Betsy McCaughey.  She shows how the Fed government will decide who receives care, and it is already in the current House Plan.

Turning to a John Stossel piece on Medicare, which underscores the abuses that can come from having a free service.



Medicare began as a means to provide healthcare for the aged.  Why then was it made compulsory?  It was a precursor to a mandatory healthcare system in America.   Ronald Regan had strong views about the intent and the direction that we have seen unfold.   His words

Since then the entitlement engine has grown, but it is the dirty little secret in Washington DC that is not being dealt with.  As detailed by the head accountant of the Federal Government: