The Medicare Sky Is Falling

by run75441

“The Medicare Sky Is Falling”

Chicken Little, Courtesy of “EW.Com Entertainment Weekly”

A recently released Medicare Trustees report detailing the insolvency of Medicare HI has been used by conservatives and supporting news media to call again for an overhaul or privatization of Medicare to save healthcare for those on Medicare.

“The gravest threat to Medicare is doing nothing. If we do nothing, not only will Medicare collapse but so will our fiscal house.” Thursday, May 26, 2011; Senator Dan Coates Indiana

This is not the first time a politician, a think tank, or the news media has predicted the demise of Medicare due to exhausting its funds (Table 1). Both Medicare and Medicaid have also been identified numerous times as being the cause of rising healthcare cost resulting in calls for drastic over halls, privatization, state voucher programs, complete elimination, etc. In any case, 40 years later Medicare is still here and its funds will not be exhausted as claimed in the recent New York Times and Wall Street Journal articles. Instead, the program will not be able to meet its entire obligations for Medicare HI. At the Chicago Tribune, Eric Zorn culls from the news media examples of the sky falling in on Medicare: Medicare is Going Bankrupt Again” May 5, 2011

“The Medicare hospital trust fund faces bankruptcy by 1976 and taxes must either be raised or benefits reduced the senate finance committee was told today.” Chicago Tribune, July 2, 1969

“In the last few years, when it appeared that the Medicare trust fund would run out of money in 1987-89… But the need seemed less urgent after the Congressional Budget Office issued new estimates last September indicating that the Medicare trust fund would not go bankrupt until 1994.” The New York Times; January 20, 1985

“The Medicare hospital insurance program faces bankruptcy by 1996, two years earlier than projected last year.” The Washington Post; April 1, 1986

“Medicare trustees reported Wednesday that the program’s financial outlook is getting worse, touching off a new round of debate over the future of the federal health insurance system for the elderly and disabled. According to the trustees, who give the program a fiscal checkup every year, the fund that pays Medicare hospital bills dipped into the red last year and will go broke in early 2001. That’s a year earlier than they predicted in 1995.” “DIRE FORECAST SPARKS NEW MEDICARE DEBATE TRUSTEES’ REPORT USED AS FODDER FOR POLITICAL SALVOS BY BOTH SIDES,” The Chicago Tribune; June 6, 1996.

Chicago Tribune

40+ years and the “EverReady” Medicare HI Bunny is still solvent as Eric Zorn shows in the chart above and details in his article. Much of today’s issues can be blamed on a smaller working Labor Force resulting in lower tax revenues.

The attack on Medicare with the threat of vouchers or overhaul has never had justification beyond “the sky is falling” proclamations. Furthermore such an overhaul would have no impact upon rising healthcare costs. Try (I did) finding out what certain services cost so you can control the cost of an outcome in a privatization scenario, when you are seriously ill, and the answers or non-answers from your doctor and the staff will only forestall your diagnosis/remedy. Similar to a 401K, the impact of proposed privatization and voucher plans shifts the burden of rising healthcare costs and risk to the healthcare recipient who will have far less of an impact on those rising costs as an individual and far less on a healthcare system encountered. The same as private insurance, Medicare and Medicaid reflects the rising cost of the healthcare industry intent on the selling of service, procedures, and product with Medicare being more efficient in controlling those costs in comparison. In the end; a few tweaks here and there as Coberly, Bruce, and others have suggested will provide a temporary fix to Medicare without impeding access to healthcare and not provide a solution to rising healthcare costs.