Monday, October 22, 2012

How much time do we have? Well, the Medicare Trust Fund Disappears in just 3 presidential terms

The 2012 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds was submitted April 23, 2012 to John Boehner and Joseph Biden, Speaker of the House and President of the Senate, respectively.  That report states (at page 6 et seq)

"The estimated exhaustion date for the HI trust fund remains at 2024, the same year shown in last year's report."  and

"HI expenditures have exceeded income annually since 2008, and projected amounts continue doing so through the short-range period until the fund becomes exhausted in 2024."

2024 may sound like a long way off in the future but it's only 12 years - 3 presidential terms.  That is not much time.

This is important stuff.  But if you prefer not to wade thru the Trustees Report, then please at least read this opinion piece in Sunday's Washington Examiner.

Here are two key paragraphs (but read the whole thing):

"Under Romney's plan, Medicare would not change for anyone who is currently 55 years of age or older. For those who are not yet 55, Romney has proposed a premium support program that puts the choice of health care coverage in the hands of seniors, not the government. If Medicare is the best option, future seniors will still have access to the program, but if there is a more affordable or higher quality plan in the private sector, older Americans will have the choice to leave traditional Medicare and pocket any savings.

"Whereas President Obama's top-down approach only lowers the amount the federal government will pay for services, Romney's proposal introduces competition into Medicare in order to drive down the cost of health insurance and provide an incentive to improve and innovate current plans for seniors."

I would only add that enabling private insurance competition for Medicare will be a good thing, but that is still nibbling around the edges of the more fundamental problem - the cost of delivering medical care in the U.S.  

Until that more fundamental problem is acknowledged and faced honestly, there is no real hope for a solution that works any better than the failed "solutions" of the past 45 years.  Those failed "solutions" have now brought us to within 3 presidential terms of a Medicare whose trust fund is exhausted and whose annual costs will continue to run far in excess of annual income.  In the private sector, that would be called "broke" if not "bankrupt".  In government work, it's called something else.  

But it walks like a duck and quacks like a duck . . .  So if this is not a crisis what is?  If now is not the time to tackle it, when will be?  If Americans will not devise a solution for ourselves, who do we think will come along and impose one on us?
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