Medicare Funding Crisis

In: Social Issues

Submitted By daholt1979
Words 4082
Pages 17
Medicare Funding Crisis

David Holt

Healthcare Finance
Ron Evans
July 20, 2013

At the heart of America's fiscal crisis is the impending collapse of our entitlement system. And the primary cause of that looming collapse is the explosion of costs in Medicare, the federal program that provides health insurance to every American over 65. Without major reforms of the program, there is simply no way for us to address the federal deficit, contain the national debt, or save Medicare itself from collapse.
Medicare's woes are partly demographic. In 2030, when the last of the Baby Boomers retires, there will be 77 million people on Medicare, up from 47 million today. But there will be fewer working people funding the benefits of this much larger retiree population: In 2030, there will be 2.3 workers per retiree, compared to 3.4 today and about 4 when the program was created.
But a bigger part of Medicare's troubles is the rapid inflation of healthcare costs. In 2010, the per capita cost of providing healthcare services in America increased by 6.1%, according to Standard & Poor's, while overall inflation increased by only 1.5%. According to the Department of Labor, over the past decade, healthcare inflation has risen 48%, while inflation in the broader economy has increased by only 26%.
Providing an increasingly expensive service to a rapidly growing population, while drawing on a declining pool of taxpayers is a recipe for fiscal disaster. The Congressional Budget Office now projects that the Medicare program will be effectively bankrupt in 2021, and its continuing growth will increasingly burden the federal budget, sinking the nation deeper into debt. The program's trustees report that its unfunded long-term liability. The gap between the benefits that will need to be paid out and the revenues available to pay for them over the…...

Similar Documents

Technology and Medicare

...TECHNOLOGY AND MEDICARE By providing an assured source of funding for new technology, Medicare has contributed to the development and dissemination of many of the new diagnostic and treatment options that have become available over the last 30 years. Research and development of procedures, devices, and equipment can be costly and is dependent at least in part on the expectation that payment for their use will be available. Medicare covers the populations most likely to need health services, and the program traditionally has paid for developments once their safety and effectiveness have been demonstrated. When a technology first arrives, it tends to be expensive because economies of scale in production are not yet available, it is often hard to use, and usage rates per unit are low as it becomes more widely adopted. As a result, initial payment levels are often quite high. Over time, unit costs tend to decrease as a technology matures and its ease of use and capabilities increase and its utilization rates go up. For example, when MRIs first appeared, the cost of a machine was several million dollars and operating costs were high. MRIs have been continually improved; today, the cost of a more capable machine is lower, it is easier to use, and imaging costs are substantially lower. Another example is heart pacemaker implants. Initially, this procedure was quite complicated and entailed a lengthy operation done under general anesthesia. Today, the procedure is relatively......

Words: 338 - Pages: 2

Medicare

...Canada’s Defining Moment: Medicare Most nations proclaim the doctrine of human equality, yet so few nations do little to prove it. Canada, however, is not most nations. One of Canada’s central operating principles is to use public policy in unique and bold ways to ensure and promote sensible, everyday equality. Medicare is Canada’s best example. Not one single public policy implement ever did more to let the country live up to its equality ideal. Since the inception of Medicare, Canadian society has evolved into a much more inclusive of, accessible to, and tolerant of individuals with various types of disabilities and illnesses. Medicare is Canada’s defining moment as it has ultimately set Canada as the country it is today. Medicare's influential impact on Canadian society was recognized globally and put into effect in other nations all around the world. Equality then became a definition which every Canadian citizen understood. Medicare, as some have labelled “the most Canadian of programs” is the one program that best represents what Canadians value and hold dear. Health care has long been regarded as the most popular public policy in Canada; Canadians feel more strongly about the health care system than conceivably any other issue. Furthermore, publicly-funded health care is tied directly to Canada’s national identity and differentiates Canada from its American neighbours like few other establishments. Moreover, “in 2005, 85% of Canadians believed that ‘eradicating’......

Words: 1204 - Pages: 5

Medicare

...EFFECTS ON ENROLLMENT IN THE MEDICARE ADVANTAGE INSURANCE PLANS IN THE STATE OF TEXAS. Medicare is an insurance program provided by the federal government for people who are 65 years old or older, people of all ages with End-Stage Renal Disease, and certain disable people. Medicare is administered by the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services. Medicare has become America's leading health care insurance program, providing coverage for approximately 47 million individuals and costing more than $516 billion a year. Medicare nowadays is facing high popularity and an uncertain future. Some experts say that Medicare is expected to go bankrupt in 2017 (Clark, 2009). A Medicare Advantage Plan is another health coverage choice that eligible beneficiaries may have as part of Medicare. The plan is offered by private companies approved by Medicare. MA plans must cover all of the services that Traditional Medicare covers except hospice care. These plans are not considered supplemental coverage but may offer extra coverage such as vision, hearing, dental and/or health and wellness programs. Most include Medicare prescription drug coverage. Medicare pays a fixed amount for the beneficiaries every month to the companies offering the plans. These companies must follow the rules set by Medicare. The motivation to choose this topic comes from an internship or curricular practice training performed during the years......

Words: 1461 - Pages: 6

Medicare

...Telemedicine: An Important Force in the Transformation of Healthcare 1. Introduction As we enter the new decade, healthcare for an aging population is a top-of-mind issue for government policy makers, business leaders and consumers alike. Healthcare costs have been steadily increasing, and a growing number of healthcare providers and patients worry that the recent budget crunches faced by healthcare providers will affect patient care in the years ahead. Healthcare providers are taking advantage of the American Recovery and Reinvestment Act (ARRA) stimulus funding to launch telehealth initiatives to face down some of healthcare’s most daunting challenges. According to the American Telemedicine Association: "Telemedicine is the use of medical information exchanged from one site to another via electronic communications to improve patients' health status. Closely associated with telemedicine is the term 'telehealth,' which is often used to encompass a broader definition of remote health care that does not always involve clinical services. Videoconferencing, transmission of still images, e-health including patient portals, remote monitoring of vital signs, continuing medical education and nursing call centers are all considered part of telemedicine and telehealth." Following decades of media attention focused on the potential for telemedicine to transform health care delivery, the technology has matured, as has the acceptance of its use among providers and payers. ...

Words: 4908 - Pages: 20

Should Medicare/Medicaid Reduce Funding for Renal Dialysis Cases?

...Background Many people, both young and old, utilize Medicare/Medicaid for the treatment of several chronic illnesses such as kidney disease and End Stage Renal Disease (ESRD) which is the last stage of chronic kidney disease and is characterized by permanent irreversible kidney failure. ESRD patients include those who are treated with dialysis—and those who have a functioning kidney transplant. According to the National Kidney Foundation’s website (National Kidney Foundation, http://www.kidney.org/kidneydisease/threesimpletests.cfm) the numbers are epidemic as many as 25 million American adults are diagnosed with chronic kidney disease. In an effort to combat kidney disease and to find treatment cures, the National Institute of Health (NIH) spends $655 million on kidney disease research and Medicare spends approximately $24 billion per year or approximately more than $35 billion towards the care for over 525,000 patients with end-stage kidney failure alone. Individuals with end-stage renal disease (ESRD)—irreversible loss of kidney function—require either dialysis or kidney transplantation to survive (add cite). Dialysis replaces the filtering function of the kidneys when they fail to operate properly and transplantation involves the transplanting of a donor kidney to an ill patient. There are two methods of dialysis and both have advantages and disadvantages—no one type of dialysis is best for everyone. The dialysis method that people select are based on what their......

Words: 1004 - Pages: 5

Medicare

...The Cost Of Medicare On The Economy The Cost of Medicare On The Economy Medicare is facing a problem of retiring baby boomers, rising life expectancy, and decreased fertility rates that will increases the proportion of the population over age of 65 who be eligible for Medicare benefits. The problem with Medicare is that they never made adjustments for people who live longer. Also, there are inadequate funds to meet the needs of the future enrollees. Organization Information Medicare is a national social insurance program. It is administered by the United States federal government and was signed into law on July 30, 1965 by President Lyndon Johnson (CMS, 2012). Currently Medicare covers 60 million Americans. The health insurance is available to individuals 65 years and older. It is an insurance program for which these enrollees have money deducted from their pay while they are still working. The health care insurance covers hospitals, physician’s services, nursing home care or home and community-based services Also, the participant pays part of the services called “deductibles”. Medicare provides health insurance benefits to 38.7 million people age 65 years and older. (Center for Medicare & Medicaid services, 2011). Gist of The Problem The problem with Medicare is that the regulations have not changed even though there are more people enrolled in the program. Medicare will be unable to provide the same services unless the premiums are increased.......

Words: 1460 - Pages: 6

Medicare

...discussing what is Medicare, and what type of impact the Medicare Legislation will have upon it , what changes the Affordable Care Act made to the Medicare program, and last but lest what I feel need to change to the Medicare program that will extended the life program past the year of 2026. Medicare is known as the “national social insurance program, administrated by the United States Federal Government” (Medicare.gov, 2012). Medicare give health insurance to people ages sixty-five (65) years of age and older that have work and paid in to system, and younger people that have a medical and physical disabilities (Medicare.gov, 2012). Medicare when it first started only had two parts that was part A and part B (Longest, 2010). Medicare part A was the Hospital Insurance, better known as HI and it covers hospital visits, home health nurses, nursing homes, and hospice care, and part B which is known as Supplementary Medical Insurance or SMI covers doctor visit, home health services, and other medical services, And then the BBA, better known as Balance Budget Act in 1997 added on a third part which is known a Medicare part C, known as the Medicare Advantage Program pays for most prescription drugs. And there is Medicare Part D which was added by the MMA that pays for the prescription drugs that is not covered by Parts A&B. The Medicare Legislation will have a tremendously impact on the Medicare Program. The Medicare legislation I predict will change the Medicare program for......

Words: 923 - Pages: 4

Medicare

...Medicare The Medicare program has had an enormous impact on modern healthcare. The program brings healthcare to those 65 and older, but as a result of regulations and federal monitoring, the process for obtaining coverage, keeping coverage, reimbursement for services and the impact on accreditation make some health care organizations struggle to make ends meet. The program impacts not only standards for licensure, certification and accreditation, but also effects quality of care, how providers are paid, and access to healthcare. Medicare stipulates how providers are paid for services. An example would be the Prospective Payment System (PPS). The PPS determines fixed Medicare payment amounts based on the classification of the service provided (CMS.gov, n.d.). Medicare reimbursements are also influenced by many quality programs in place. As stated above, the Hospital Readmission Reduction Program threatens reductions in payment for performance, thus impacting reimbursement as well. Since signed into law in 1965, the Medicare program has played a large role in standards for healthcare providers, clinical quality for its patients, reimbursement to its participating providers, and has provided access to necessary medical care for the elderly. This program also has a very large influence on the health informatics professional’s role in modern healthcare and its emerging technological programs contribute to the growing need of a skilled health informatics......

Words: 421 - Pages: 2

Medicare vs. Medicaid

...States doesn’t have universal health care, we refer to the Medicare and Medicaid system. Medicare is referred to as “the universal health insurance for elderly people” (Barr, 2011, pg.132). Medicare is a federal program that helps all people 65 years or older pay for healthcare. Those who qualify for Social Security benefits are automatically eligible for Medicare (Barr, 2011). When Medicare was passed in 1965, only 56 percent of elderly people have hospital insurance. It was a strong national consensus that none of the elderly in United States should face financial ruins because serious illnesses were seen as a threat to financial security of seniors (Barr, 2011). Due to that reason, Medicare was created to ensure financial stability. Not only does Medicare cover people 65 years and older, but it also covers individuals with certain disabilities, and individuals with End-Stage Renal Disease that requires dialysis or transplant (Medicare.gov). Unlike Medicare, Medicaid was not created as a program for all people who fall below that poverty line. It only covers certain subgroups of poor people (Barr, 2011). Medicaid provides medical benefits to groups of low-income people, some who may have no medical insurance or inadequate medical insurance, health care to children, pregnant women, parents, senior, and individuals with disabilities (Medicaid.gov). Medicare is made up of four different parts: part A, B, C, and D. Medicare part A is a service plan for hospital care. All......

Words: 2289 - Pages: 10

Medicare

...service requirements. By setting these standards for licensing, healthcare started its journey towards improving and standardizing the health and safety of individuals receiving services. Medicare, a federal health insurance program that pays for many types of health care expenses, is an entitlement program in which U.S. citizens earn the right to enroll by working and paying their taxes for a minimum required time period. Enacted in 1965, Congress decided that minimum standards for this program would be set at the national level but that they would be certified as meeting these standards, by individual state agencies. The Secretary of the Department of Health and Human Services (DHHS), under Medicare Law, established these national minimum standards, also known as the Conditions of Participation (CoPs), for healthcare facilities and other Medicare beneficiaries (Cashman, Bierman & Myers, 1968). In order to qualify for Medicare certification and reimbursement, providers and suppliers of health services must meet and comply with the Conditions of Participation. The determination of whether a healthcare organization is in compliance with the CoPs is made by either a state survey agency under contract with DHHS or by receiving accreditation from an accrediting body approved by the Centers for Medicare and Medicaid Services (CMS) (Healthlawyers.org, 2015). Both of these methods must follow guidelines issued by CMS to make their recommendations of whether a particular provider......

Words: 385 - Pages: 2

Medicare Paper

...Medicare Project Author Note In 1965, U.S. President Lyndon B. Johnson passed the Medicare Benefit legislation as an amendment to the Social Security Legislation after 20 years of debating. Medicare is a health insurance program for U.S. citizens at least 65 years old, or those aged younger than 65 years who suffer from certain disabilities. In 1965, nearly half of the elderly had no health insurance and many others did not have enough coverage. That is when Medicare was enacted to help assure that almost all citizens at the age 65 or older would have health care coverage. The program was modeled on the standard employer sponsored health plans of the day. As the Nation moves into the 21st century, Medicare is facing serious financial challenges. Over the next 50 years the number of beneficiaries are expected to more than double while the ratio of workers, whose payroll taxes fund over half of the program, to beneficiaries is expected to decline from about 4 to 1 to a little over than 2 to 1. In recent estimates from the Congressional Budget Office and the Administration predicted that the program will be bankrupt about the time the growth in beneficiaries accelerates as the baby boom generation started to become eligible in 2010. People seem to get Medicaid and Medicare confused. Medicare and Medicaid are both government sponsored programs designed to help cover healthcare costs. Both programs were established by the U.S. government in 1965 and are taxpayer funded,......

Words: 2983 - Pages: 12

Center for Medicare

...Centers for Medicare and Medicaid Services Centers for Medicare and Medicaid Services Centers for Medicare and Medicaid, once called the Healthcare Financing Administration was signed into law on July 30, 1965 by President Johnson. The Medicare and Medicaid programs were created under the social security act to provide health insurance to people with disabilities, low income families, people 65 or older, or people with terminally ill disease. Medicare was once the responsibility of Social security administration, and Medicaid was once the responsibility of the Social and Rehabilitative Service Administration until in 1977 the Healthcare financing Administration was created administer both services. What led the production of these two health insurances was the belief in the 1940s that everyone is entitled to health insurance no matter what, but since then health care cost has risen drastically. Many health care providers are reluctant to offer services or the appropriate services to people with this type of insurance because only a set amount is covered and not all expenses are paid for. In America Medicaid and Medicare provide health insurance to millions of people every day, and it would be devastating if they failed and were no more, throughout this essay I will show shocking statics and facts on both of these health services and how they work. It is important for Americans to be knowledgeable on what our country’s health runs on and how financially Medicare and......

Words: 1283 - Pages: 6

Social Security and Medicare

...Social Security and Medicare History Present Configuration Future Projection GERO100 March 31, 2012 Hopefully we will all be physically able to work until the age of 65, collect retirement and Social Security and live an enriching life until we leave this world. Not all companies financially support their employees with fully funded retirement plans so it is left up to the individual to actively participate in saving for their future. When someone reaches retirement age, if the finances are there, they are usually only a fraction of what they were making as a full-time employee. This is when one hopes of having Social Security and Medicare benefits to supplement our retirement income for a more stable financial future. There are several reasons the Social Security Act was passed in August 1935. The elderly were living longer due to the availability of better health care, autonomy in workplaces to make jobs easier on individuals, and the modernization of our country’s water systems. Due to this increased longevity in the lives of the elderly, they were also more poverty stricken. An intention of the passage of the Social Security Act was to reduce the burden of loss of income to retired workers aged 65 or older. (Quadagno, 2008) It also included provisions for unemployment insurance, old age assistance and aid to dependent children. Benefits were to be paid based on the primary worker and was to be funded through payroll taxes deducted from the......

Words: 2550 - Pages: 11

Medicare Crisis

...Medicare is the United States' health insurance program for individuals age 65 or older. However certain people younger than age 65 can also qualify for Medicare, including those who are disabled, has permanent kidney failure or amyotrophic lateral sclerosis, known as Lou Gehrig’s disease). The program helps with the cost of health care, but it does not cover all medical expenses or the cost of most long-term care. Many Medicare participants must also have supplemental health care coverage in order to cover these charges that are not covered as part of the Medicare program. Is Medicare the perfect program? Well Medicare is financed by a percentage of the payroll taxes paid by workers and their employers. Also this program receives another percentage financed by premiums deducted from monthly Social Security checks. What is this Medicare crisis that everyone fears? The Baby Boomers are certainly growing older and even the youngest of these baby boomers are approaching 50 years of age. Retirement is getting closer but can this generation and the generations following count on the Medicare coverage that the past generations was fortunate enough to receive. Before more money was being saved then what was being spent for Medicare, and that extra money was put into the Hospital Insurance Trust Fund and the Supplemental Medical Insurance Trust Fund. Those funds total about $500 billion, all of it US Treasury bonds. However now thanks to the increasing number of individuals on...

Words: 1604 - Pages: 7

Fiscal Policy: Social Security and Medicare

...Security and Medicare Currently the Social Security Trust Fund is in a surplus, more monies are contributed to the fund then going out to beneficiaries. However, as the number of retirees increase and the number of workers decrease the Social Security Trust Fund becomes depleted quickly, in other words a deficit is created. The future for Social Security is going to have to borrow monies to continue with the current benefit structure, will have to restructure the benefit package, or possibly raise the retirement age to accommodate the increase in beneficiaries, to name a few possible changes. Social Security is far from a crisis but the state of Social Security is headed towards a deficit and into debt. It is estimated that Social Security will continue with a surplus until 2020 and eventually depleting around 2040 (Colander, 2010). The U.S. government is going to have to make adjustments to the current system to ensure that funds will continue to be available to future retirees. Along with the Social Security future going from surplus to deficit and debt is the growing concern of Medicare. As of 2004 Medicare funding by the U.S. government has been increased with the expansions of coverage (Colander, 2010). The growing rate of retirees and the need for medical care and drugs has increased. The future of Medicare is uncertain as medical expense increase and the amount spent per individual using Medicare increases funding is utilized faster. Funding for Medicare will......

Words: 334 - Pages: 2

Pajama Friends | مجلات و اخبار | Below Deck Mediterranean