Well well.. isnt this sad, honestly i cant understand how with very little technology and resourced people back in the day didnt have to deal with econmic crsis like we do now. its so sad for me to think what kind of world my children will be living in.
WASHINGTON -- Funding for the Medicare program will dry up in 2024, according to an annual report from the program's trustees. Last year's report projected the entitlement program to be solvent through 2029.
The bleaker projection is a result of a smaller-than-expected influx of payroll taxes in 2010 because of a slower-than-predicted economic recovery, Health and Human Services Secretary Kathleen Sebelius told reporters during a Friday afternoon press briefing.
And inpatient and hospital-related care was more expensive last year than actuaries originally predicted, Sebelius noted.
Total Medicare costs are currently about 3.6% of the nation's Gross Domestic Product (GDP), but that percentage is expected to balloon up to 5.5% of GDP by 2035, and then increase gradually to about 6.2% of GDP by 2085.
Two separate trust funds provide money for Medicare. The Hospital Insurance Trust Fund pays for inpatient hospital and related care. The Supplementary Medical Insurance (SMI) Trust Fund pays for outpatient physicians and other outpatient services (known as Part B of Medicare) and Part D, which covers prescription drugs.
It's the Hospital Insurance Trust Fund specifically that is projected to be exhausted in 2024. However, "exhaustion" to actuaries means the program will only take in enough funds to pay out three-quarters of benefits, which means hospitals would receive much lower reimbursements for treating Medicare patients.
Part B -- which includes doctor's bills, outpatient expenses, and prescription drug coverage -- will remain steady because it's automatically funded each year, through legislation and insurance premiums, to meet the following year's expected costs. However, those costs will grow, largely because of the increased cost to provide care to an aging population.
SMI costs are currently about 1.9% of GDP, but will grow to 3.4% of GDP in 2035 and reach 4.1% of GDP by 2084, projected the trustees, which include Sebelius, Labor Secretary Hilda Solis, Treasury Secretary Tim Geithner, Commissioner of Social Security Michael J. Astrue, and two new public trustees.
However, that projection assumes that the short-term sustainable growth rate (SGR) fix passed by Congress in December will indeed expire on Jan. 1, 2012, at which point doctors will be subject to a 29% cut in Medicare reimbursements. Every year since 2003, Congress has prevented steep cuts from happening, and it's expected that will happen again.
The American Medical Association (AMA) said the report shows exactly why the SGR formula needs to be fixed.
"The Medicare trustees report leaves no doubt that the time to repeal the Medicare physician payment formula is now -- to keep from digging a deeper financial hole and to preserve access to care for patients," AMA immediate past president J. James Rohack, MD, said in a statement.
"Across-the-board cuts in Medicare do not get to the root of the cost challenge and can hamper patients' ability to receive care," said Rohack. "Instead of focusing only on cuts, the ultimate goal should be to achieve better value for our healthcare spending."
Although this year's Medicare assessment is less rosy than last year -- when the trustees projected the program would remain solvent until 2029 thanks to the Affordable Care Act (ACA) -- the trustees still said the healthcare reform law is a life raft for Medicare and will make Medicare costs 25% lower than they would have been otherwise.
If the law hadn't passed, the Medicare program would have run out of money in 2016, Sebelius said.
Many of the main provisions that Democrats expect to save money -- including changing how care is paid for and delivered, in part through accountable care organizations -- won't begin to save money for years.
If those reforms don't work, Medicare's cost will be much higher, wrote the two public trustees.
"If the legislation's cost-reduction innovations in the delivery of and payment for health services were not successful, or if healthcare providers could not accommodate the slower growth in Medicare payment rates mandated by the new law, Medicare costs would be significantly higher than shown in the trustees report," wrote Charles Blahous and Robert Reischauer.
Original Article.
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