Medicare could run out of money sooner than previously predicted

Source: LA Times

from Washington— Highlighting the financial peril confronting Medicare, the federal government predicted Friday that the program's largest trust fund would run out of money in 2024, five years earlier than projected last year.

Medicare's deteriorating condition contrasts with Social Security, whose funds will not be exhausted until 2036, according to an annual report by trustees who oversee the two mammoth entitlement programs.

The faltering Medicare finances — caused in part by the sluggish economy — are expected to intensify pressure on both parties in Washington to move forcefully to shore up the health plan that covers care for more than 47 million elderly and disabled Americans.

"Americans are living longer, and healthcare costs are continuing to rise. And if we do not do more to contain the rate of growth in healthcare costs, then our commitments will become unsustainable," said Treasury Secretary Timothy F. Geithner, chairman of the board of trustees.

Read more: http://www.latimes.com/health/la-na-social-security-medicare-20110514,0,6463983.story

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Of course, if we let the Bush tax cuts expire, this would solve a lot of the problem. Instead, Republicans are insisting on even more tax cuts while privitizing Medicare. We need to let the American people know that there is a choice between Medicare and tax cuts. Tax cuts come at a severe cost. Most Americans will not save money due to these tax cuts, since they will end up paying more under the voucher system proposed by Republicans.

$tupid a$$hats.

teh stoopid. et burns.

thing (and SS) that will really get people to fight this Republican scourge that robs us blind to fund wars and takes away everything, including education, that supports a civil and decent society in this country.

We will take our country back; it's only a matter of time.
NGU!

Expanding Medicare's roll with mostly healthy younger people would "save" Medicare. Unfortunately, Medicare for None is more likely due to the GOP's ability to block government funding.

Say if you start buying into medicare at like 20 and they give you a reduced rate. If you lose your job or something you get coverage for a year. If you get a job w/ insurance you can go with the medicaid or stop paying but if you lose your work insurance you can get back in at the reduced rate.

Anybody who waits and gets in later pays more.

you borrowed, doesn't that imply you pay back what you borrow? Particularly since corporations and banks are rolling in profits?

Some biggies haven't.

GM, for instance, hasn't, but they're doing gov's work so it's apparently okay. AIG probably never can pay it back. Fannie and Freddie were the target of some reforms a few years before fall '08 but weren't reformed; they're likely to come back for yet another bailout unless the societal engineers find a way to flip them to a new-found "socially good" purpose.

the tax base being lost on those jobs is ENORMOUS

I don't even have time to point out all the flaws in this amateurish article.

the propaganda media. The LA Times was taken over by RWingers a few years back and is no longer a credible source. The Bush tax cuts have little to do with funding Medicare or Social Security. What could undermine both programs is unemployment and slave wages which would lessen the payroll tax collected to fund these programs. I don't have time to fish through the writer's sources, but I'm almost sure that the whole story isn't being reported and he is cherry picking his quotes.

The republicans cut donations to social security and gave tax cuts to the rich in the first bill of the tea-bagging congress. This was done to further weaken both programs so they can force their so-called reform through to eliminate paying back what they stole from you.

The Social Security/Medicare revenue stream was made whole. The money was reimbursed to the programs out of general revenues.

Don't get me wrong, I think it was a terrifically bad idea for completely different reasons, but what's the connection between the two?

Isn't it much more likely that as the baby boom generation ages, Medicare was facing a financial crisis, anyway? As I see it, only a raise in Medicare payroll tax rates (as well as cap amounts) will patch up the problem. Restricting payments to doctors and hospitals only has two effects, it makes a lot more doctors think about opting out of accepting Medicare patients, and the hospitals and those doctors who stay in are forced to third-party their costs on to the other paying patients.

They are paid on all wages and salary, unlike Social Security taxes.

You are correct that we need to raise the tax rate to fund the program. It's just a matter of number of beneficiaries vs number of workers - as that ratio rises, tax rates need to increase to maintain benefits.

The short term cuts to Medicare were undone again last year because beneficiaries are already losing access to many doctors. It's not that most doctors won't take some Medicare patients, but they have to limit the number to make a living.

And $106,800 is the current cap.

For some time (Medicare finances are constantly being adjusted), the 2.9% of FICA that employer and employee pay for HI has been charged on ALL wages.

http://www.ssa.gov/pubs/10003.html

The rest of FICA (12.4%) is charged on the OASDI annual limit, which is currently $106,800. Additionally, the health care reform bill added an extra 0.9% Medicare tax that will be paid by certain high earners.

Make my day!

I've never been near the Social Security cap in my life, so was blissfully unaware that there was no Medicare cap.

You raise a good point: When doctors limit their number of Medicare patients, aren't they passing on their costs (or the burden of simply paying for them to practice medicine) on to other parties? That's all well and good, but when I hear the Medicare-for-all advocates clamor for such, they seem to forget that the system of private payers provides an invisible subsidy to Medicare.

If that subsidy disappeared, would we have Medicare-for-nobody?

That's why the CBO and the Trustees keep warning about their projections not being accurate (i.e. overly optimistic). Last year most of the impending cuts to fees were reversed again (there was a rebalance of relative value units that cut compensation to some doctors), because we just can't pretend to provide insurance to Medicare recipients. We have to really provide it. The official projections are based on official law, but everyone knows that we can't really enact the cuts in the official laws.

Current plans are for the private subsidy to continue, but I don't think most people grasp the problems with that. First, as the number of people on Medicare rise, the weight of the private Medicare subsidy is going push private insurance rates up much faster. Right now it is already one of the reasons why medical inflation rates are higher than overall inflation rates. Second, because health care reform puts a big public subsidy in place for many privately insured people, and greatly expands Medicaid, the government will assume a much higher proportion of the private insurance cost increases.

We are still playing futile games with medical subsidies. We are going to have to cave and increase tax rates.

I haven't been to a doctor in about 15 years. I am 62. My husband, on the other hand, has had 3 operatons, countless doctor visits, this and that test, meds that are too much for two medicine cabinets.

Don't blame ALL of us. BTW, my employer insurance just for me costs $160 a month, with NO CLAIMS, with a $3,500 deductible. My husband's insurance is similar to mine, yet at least HE is getting something for it. I suppose the ME's of the country are supporting the hims.

If we returned to job increasing policies like much bigger stimulus programs, we'd have more people working and more contributions to Medicare.

If we eliminated the wasteful tax breaks on multimillionaires we'd have more money in our system to finance much needed infrastructure repair which could put millions back to work.

negotiate for lower prices on drugs and allow drug reimportation from countries that are safe, like Canada. Or better yet, Medicare for ALL!