Government

Lessons for Medicare (we haven’t learned)

When we debate M4A we tend to accept many assumptions as if they were certain, especially lowering costs and governments ability to manage the program.

I have yet to hear the debate mention how things are being handled currently with Medicare.

Congress has failed to keep the hospital trust adequately funded. Failed to tell Americans current taxes are inadequate.

In addition, Medicare is awash in fraud and waste through errors, about 10% of all spending. Over the years several government agencies have identified problems, including the lack of claims management, called for changes and yet nothing has been done. Americans don’t seem to care perhaps thinking the cost of Medicare is just their 1.45% payroll tax.

Now, the question is, will government do a better job when dealing with 330,000,000 participants who have no visible stake in the cost of the program?

Quotes from Medicare 2019 trustees report.

As it has since 2004, the HI trust fund fails to meet the Board of Trustees’ short-range test of financial adequacy. In addition, as in all past reports, the HI trust fund fails to meet the Trustees’ long-range test of close actuarial balance.

HI experienced small surpluses in 2016 and 2017 after having deficits from 2008 through 2015. In 2018 a small deficit returned, and deficits are expected for the remainder of the 75-year projection period. The projected trust fund depletion date is 2026, the same as estimated in last year’s report. HI income is projected to be lower than last year’s estimates due to lower payroll taxes and lower income from the taxation of Social Security benefits. HI expenditures are projected to be slightly higher throughout the short-range period because of higher- than-projected 2018 spending and higher projected provider payment updates, factors that are mostly offset by the effect of lower assumed utilization of skilled nursing facility services.

The HI actuarial deficit in this year’s report is 0.91 percent of taxable payroll, up from 0.82 percent in last year’s report. Several factors contributed to the change in the actuarial deficit, most notably lower assumed productivity growth (+0.10 percent of taxable payroll), slower projected growth in the utilization of skilled nursing facility services (−0.10 percent), higher costs and lower income in 2018 than expected (+0.04 percent), lower real discount rates (+0.03 percent), and other factors (+0.02 percent).

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