by Noam N. Levey
Underscoring the urgency of the current push in Washington to rein in skyrocketing healthcare costs, Medicare's trustees warned today that the program's biggest fund would run out of money in just eight years.
The prediction - issued in an annual report on Medicare and Social Security finances - offered the bleakest assessment of Medicare's future in years and reflects growing concerns among policy experts that the nation's healthcare spending is unsustainable.
"The Medicare trustees report makes clear that today there is no more important long-term fiscal policy measure than gaining control of the growth of Medicare costs by delivering healthcare services more efficiently," said Treasury Secretary Timothy Geithner, echoing calls that federal officials from both parties have been making for decades.
Medicare, now in its fifth decade, currently provides health insurance to some 45 million mostly senior citizens.
But the impending eligibility of baby boomers, who are projected to start joining Medicare in 2011, and the unrelenting rise in healthcare costs have heightened concerns in recent years about the program's long-term viability.
The current economic downturn, which has resulted in the elimination of millions of jobs, has further eroded Medicare.
Social Security and Medicare are financed primarily by taxes evenly divided between workers and employers that amount to 15.3% of wages.
The Social Security trust fund, however, is not expected to run out of money until 2037, according to the trustees' report.
Today, those pushing to overhaul the nation's healthcare system, including senior administration officials, pointed to the Medicare news to redouble their argument.
AARP Executive Vice President John Rother called the report a "clarion call for health care reform."
President Barack Obama and groups such as the AARP are pushing for cuts in how much the federal government pays private insurers who contract to provide Medicare insurance for seniors as well as faster approval of generic drugs. Both steps challenge major healthcare industries.
The president and his allies on Capitol Hill also are exploring broader changes in the way that Medicare pays for services, including new penalties on hospitals and doctors who don't meet new quality standards.
Comments
Let this serve as a warning to those who believe the government can run a large health care delivery system without running it into the ground. As the article here demonstrates, it is poised to do just that. Ditto with Social Security.
.
And why is this so? It’s because Congress is chronically nearsighted and can’t keep its hands off of the payroll taxes that are supposed to fund Medicare and Social Security. What Medicare doesn’t get from payroll taxes is paid for out of general revenue; which now means that it’s paid for from deficit spending.
.
Before you hand over to Congress the mammoth task of running a national health care system - for which it has already demonstrated its unique disqualifications - you had better make it put its affairs in order and become efficient. Uncontrolled spending has consequences that the nearsighted can only see now. At least, I hope they can see it.
Posted by: John W. | May 12, 2009 4:12 PM
Congress has always played the bait and switch game. Lowball the cost of a program then watch as the real cost (known by them in the first place) spirals out of sight. They cannot be trusted with any program and Health Care is too important to let them destroy.
Posted by: Den C | May 12, 2009 5:04 PM
Let this serve as a warning to those who believe the government can run a large health care delivery system without running it into the ground. As the article here demonstrates, it is poised to do just that. Ditto with Social Security.
Posted by: John W. | May 12, 2009 4:12 PM
****************
Yes, it's much better to let big insurance companies continue to be able to screw over average Americans. If people can't afford insurance, to bad. If they can't pull themselves up by their bootstraps then they can just go off somewhere and die.
Tsk Tsk...
Posted by: unemployed lawyer | May 12, 2009 5:21 PM
Before you hand over to Congress the mammoth task of running a national health care system
But everyone keeps talking about the great job Bush did with the medicare drug policy he put into place. How can you think congress (big Pharma) will mess this up?
As far as Social Security, I remember someone a few years back talk about putting those dollars in a lock box so congress could not spend it. We know that did not happen and look where that fund is headed.
Posted by: lochnessmonster | May 12, 2009 5:41 PM
lochness,
Bush and his Republicans minions tried (and thankfully failed) to privitize social security a few years back.
Posted by: Hulk SMASH! | May 12, 2009 6:53 PM
Has anyone called all of the GOP congressional members to ask which of them don't use the congressional health plan?
I want all of them on record to state publicly that they aren't ever again going to use their government based single payer health plan .. and then I further want them to state which health care savings account they are going with.
Otherwise they can STFU!
Posted by: Hey Joe | May 12, 2009 7:03 PM
JohnEEE-boy:
.
Do you always show up three or more times in the same thread under different names? Do you really think people don’t know it’s you?
.
Get the Republicans off your brain. The Democrats have the power to decide how to do the right thing. The choice they have is whether or to act wisely or foolishly.
.
They can be foolish and create another unsustainable spending program like Social Security or Medicare. That is, unless you think a national health care system should only last for the next ten to fifteen years, after which the federal government will go entirely bankrupt and no one will have health care coverage. If you think going entirely bankrupt is okay, call your Senators and Congressperson and urge them to endorse a single payer universal health care system. Just forget about the fact that nobody, including the federal government, has any freakin’ money left. Rich taxpayers will turn into the stuff of mythology, as most of them will soon be heading offshore for the long term.
.
On the other hand, Congress could first try to remove the numerous existing barriers to competition, which would motivate insurance companies and HMOs to compete, lower their prices and enhance their services. That hasn’t been tried before. Since the ‘60s and ‘70s, Congress has been in the habit of intruding into the health care field and throwing down stumbling blocks to competition. They have also encouraged over-use of the health care system and wastefulness through lack of competitive bidding. Doctors and hospitals have been forced to spread the risk of loss from malpractice by charging everyone a lot more too. There are hundreds, if not thousands, of doctors who can’t practice medicine anymore because the cost of malpractice insurance is prohibitive. You can also ignore that problem, and then you will create not only a national health care system, but a national lottery too.
.
But what do I know? I’m not a Democrat. I don’t understand your urge to rush in where angels fear to tread. I don’t understand Pope-like political infallibility in my leaders. I can’t understand why fixing an immediate problem by any means is more important than trying to calculate the consequences of the fix twenty or thirty years down the road. But I guess what really has me stumped is how you are willing to turn over your entire health and safety, your entire being as it were, to a state that has no interest in you, other than to keep you quiet and out of its way. For that, I am totally at a loss. Think about it: Congress isn’t the only body capable of foolishness.
Posted by: John W. | May 12, 2009 8:53 PM
NOVA rebroadcast its great documentary on the Challenger and Columbia disasters tonight.
I remember both of them well.
When the Columbia broke up over Texas, I thought at that moment it was an omen for the war Bush was about to launch and for his entire administration.
And I was right.
But the NOVA piece suggests the shuttle disasters as a metaphor for what is going to go wrong with Social Security and Medicare and the other programs being launched.
If you had the Greatest Generation coming online right now, maybe disaster could be averted.
But instead the Slacker generation is coming online.
And their parents' generation is further along.
Neither has any real sense of responsibilty or shared sacrifice.
The "all volunteer" army a case in point: Bush extended the "volunteer" tours so extensively that "fragging" is back.
So, America is going to end up like the Challenger and the Columbia.
Serial disasters. The Rogers Commission; The Gehman Commission. Telling NASA clearly how they screwed up.
Ignored.
Challenger-Columbia: a metaphor for the future of America?
Posted by: ornery | May 12, 2009 10:05 PM
But I guess what really has me stumped is how you are willing to turn over your entire health and safety, your entire being as it were, to a state that has no interest in you, other than to keep you quiet and out of its way. For that, I am totally at a loss. Think about it: Congress isn’t the only body capable of foolishness.
Posted by: John W. | May 12, 2009 8:53 PM
***********
W,
You can call me any name you want too but I know how things would look in this country if nutjob Ron Paulbots like you were ever given the keys to the white house. I suspect that most Americans know that as well, which is why you "real conservatives" are nothing but a fringe group.
.
http://www.youtube.com/watch?v=7QDv4sYwjO0
Go ahead and have the last word, Dubya, and for gods sake, GET A JOB!
Posted by: unemployed lawyer | May 12, 2009 10:40 PM
http://www.newshounds.us/2007/10/17/remember_al_gores_lock_box_well_its_baaaack
I wasn't talking about Bush
Posted by: lochnessmonster | May 13, 2009 7:09 AM
The lesson here is that it's up to you to make enough money to be very comfortable. If you let government of anybody else determine your financial future than you are at their mercy.
Some people feel that it's not fair that you've invested in these program and now you don't reap the returns. We've all made hundreds of bad investments in one way, shape or form but we ultimately move on from them.
If you have a job, don't get another job. Invest. Start a small business. Open up multiple streams of income and acquire your own wealth so that you don't have to rely on government.
Ryan
Posted by: Cash Gifting System | May 13, 2009 9:01 AM
* * * * *
Posted by: lochnessmonster | May 12, 2009 5:41 PM
.
How can I think “Congress … will mess this up?” Look at the top of the page. They have messed it up.
.
Putting the money into a lock box would have been a good idea (regardless of who came up with it). Aside from saving more money to pay for the looming Social Security debts, it would have put everyone on notice earlier that things needed to be fixed. The problem with those in Congress is that its they always wait until problems reach crisis proportion before they act.
Posted by: John W. | May 13, 2009 3:11 PM
John W - Sarcasm...
Posted by: lochnessmonster | May 13, 2009 3:33 PM
The ponzi scheme is coming unraveled - go figure. Gov't healthcare - did you expect different. Just wait until all 300 million of us have our medical care handled by these wizards.
Posted by: Terry | May 13, 2009 10:32 PM
“Sarcasm...”
.
Posted by: lochnessmonster | May 13, 2009 3:33 PM
.
Ah, yes. Sorry. I should have known. Well done.
Posted by: John W. | May 14, 2009 3:45 AM