That sucking sound you hear is the federal budget being dragged down the healthcare maw. The Medicare Trustees report that under current projections the trust fund will be exhausted in 2024:
Medicare will run out of money five years earlier than previously estimated because of the slowing economy, the program’s trustees said in their annual report Friday.
The trust fund that pays for seniors’ hospital stays will run out of money by 2024 under current projections, the trustees warned. And Social Security will go broke in 2036 if nothing is done.
Republicans immediately jumped on the latest numbers to make the case for comprehensive reforms and spending cuts.
“Today’s report makes it clearer than ever that doing nothing is not an option,” Ways and Means Chairman Dave Camp (R-Mich.), Health Subcommittee Chairman Wally Herger (R-Calif.) and Social Security Subcommittee Chairman Sam Johnson (R-Texas) said in a joint statement. “The failure to act means current, as well as future beneficiaries, will face significant cuts even sooner than previously estimated. We call on the President and all of our colleagues in the House and Senate to act now and take the long overdue steps to strengthen these vital programs. It’s what Americans expect of us, it’s what taxpayers demand and it’s what our children deserve.”
“Current projections” means including the rosy predictions of the PPACA. To refresh your memory Medicare’s actuaries have already gone on record in proclaiming those unrealistic.
I think it was Winston Churchill who said that the Americans always do the right thing when every other alternative has been exhausted. I sure wish we’d do the right thing sooner than that because once the crisis has struck the solutions that will be arrived at are likely to be sub-optimal.
Update
Let me amplify this a little bit. What the trust fund running dry means is that one of two things will happen. Either reimbursements under Medicare will be limited to the revenues coming into the trust fund from payroll deductions or money will come from the general fund to cover the shortfall. I’m guessing it will be the latter but if it’s the former, how will reimbursements be strategized? First come, first served? Some sort of round robin scheme? Doesn’t sound particularly pretty.
BTW, somewhere or other I read the claim that Medicare is a right. It isn’t or at least it isn’t a right by any standard that I would use for such things. Here’s how I would define a right in this context. Medicare is a right if patients nominally covered under Medicare can sue to have specific procedures covered. Unless I’m very much mistaken they can’t. Not a right. A benefit.
Likely from the general fund – but, and maybe I’m mistaken, won’t this changeover be relatively seamless? All the way up until the trust fund is exhausted, a bigger and bigger portion will be from the general fund anyway in the form of paying back the trust fund. Right before the trust fund is exhausted, the general fund will be picking up the full amount of slack incoming payroll taxes aren’t already.
http://www.cnsnews.com/news/article/patients-groups-sue-medicare-over-servic
” Medicare is a right if patients nominally covered under Medicare can sue to have specific procedures covered. ”
http://www.ama-assn.org/amednews/2001/05/21/gvsd0521.htm
Steve
Just for information’s sake (I’m pretty sure that most folks not near SS age are not aware of these numbers):
Medicare Premiums for 2011:
Part A: (Hospital Insurance) Premium
Part B: (Medical Insurance) Premium
Most beneficiaries will continue to pay the same $96.40 or $110.50 premium amount in 2011. Beneficiaries who currently have the Social Security Administration (SSA) withhold their Part B premium and have incomes of $85,000 or less (or $170,000 or less for joint filers) will not have an increase in their Part B premium in 2011…
For all others, the standard Medicare Part B monthly premium will be $115.40 in 2011, which is a 4.4% increase over the 2010 premium. The Medicare Part B premium is increasing in 2011 due to possible increases in Part B costs. If your income is above $85,000 (single) or $170,000 (married couple), then your Medicare Part B premium may be higher than $115.40 per month. For additional details, see our FAQ titled: “2011 Part B Premium Amounts for Persons with Higher Income Levels”.
Medicare Deductible and Coinsurance Amounts for 2010:
Part A: (pays for inpatient hospital, skilled nursing facility, and some home health care) For each benefit period Medicare pays all covered costs except the Medicare Part A deductible (2011 = $1,132) during the first 60 days and coinsurance amounts for hospital stays that last beyond 60 days and no more than 150 days.
For each benefit period you pay:
A total of $1,132 for a hospital stay of 1-60 days.
$283 per day for days 61-90 of a hospital stay.
$566 per day for days 91-150 of a hospital stay (Lifetime Reserve Days).
All costs for each day beyond 150 days
Skilled Nursing Facility Coinsurance
$141.50 per day for days 21 through 100 each benefit period.
Part B: (covers Medicare eligible physician services, outpatient hospital services, certain home health services, durable medical equipment)
$162.00 per year. (Note: You pay 20% of the Medicare-approved amount for services after you meet the $162.00 deductible.)
Medicare premiums and coinsurance rates for 2011
steve:
I was thinking more about patients suing the Medicare system for coverage. In other words, the ability to prevent Medicare from being abridged or restricted.
Another possible measure might be the ability to sue a physician to force him or her to accept Medicare.
This is actually good news for me. 2024 is ten years before I turn 65 so hopefully the coming crisis will be resolved before I retire – assuming I can.