A Doctors' Note On Medicare (Page 8 of 8) in pdf

10 Facts Policymakers Should Consider In Reforming Medicare (cont’d)

Medicare Is Running Out of Money.

The Hospital Insurance Trust Fund has been running a deficit since 2008 and is projected to continue

to do so forever. According to a former director of the Congressional Budget Office, in 2011, the Medicare program ran a $288.3 billion cash

shortfall. In fact, since the creation of the program in 1965, Medicare has run cash deficits each year, except 1966 and 1974.

The President’s National Commission On Fiscal Responsibility And Reform Said “Federal Health Care Spending

Represents Our Single Largest Fiscal Challenge Over The Long-Run.”

Under current law, Medicare spending is expected to jump

from $522.8 billion in 2010 to $932 billion in 2020.

Medicare’s Drug Benefit (Part D) Is Popular And Has Cost Less Than Expected.

As former Secretary of Health and Human Services

Mike Leavitt noted in 2011,“The drug benefit, now in its sixth year, has outperformed all expectations. Seniors like it. Ninety percent of

Medicare participants are in secure drug coverage and express strong satisfaction with the program in independent surveys. Scores of insurers

participate in the program. In 2011, every senior in the country has access to a minimum of 28 drug plan options. Competition is working to

hold down costs. Current projections by the Medicare actuaries show the 10-year costs of the drug legislation coming in 41 percent below

estimates made when the bill passed.”

Over The Next 20 Years, The Share Of Medicare Beneficiaries Living At Or Above 600 Percent Of Poverty Is Projected To

Increase By Half.

According to Kaiser Family Foundation analysis, between 2010 and 2030, the share of all Medicare beneficiaries living on

incomes at or above 600 percent of poverty is projected to rise from 19 percent to 30 percent.

It Is Not Possible To Raise Taxes High Enough to Ensure Medicare’s Long-Term Financial Solvency.

10.

Faced with Medicare’s

financing challenges, some say Congress should just raise taxes to pay for current benefits. But just raising taxes does not fix the problem. For

example, respected economists Kate Baicker and Jonathan Skinner found tax rates would have to jump 28 percent for the wealthiest

Americans, just to keep Medicare solvent for another decade. And in this scenario, even the poorest Americans would see an increase in their

taxes. These huge tax hikes would be disastrous for American families in our economy. Raising taxes to paper over the problems with runaway

Medicare spending would be short-sighted and selfish because it would leave seniors’ children and grandchildren with less economic

opportunity.

Holtz-Eakin, Douglas and Nussle, Jim, “Medicare’s Dirty Little Secret,” April 25, 2012,

The National Commission on Fiscal Responsibility and Reform, “The Moment of Truth,” December 2010, Page 36,

Moffit, Robert, “The First Stage of Medicare Reform: Fixing the Current Program,” The Heritage Foundation, October 17, 2011, Footnote 4,

Leavitt, Michael, “A Prescription to Fix Medicare,” The Washington Post, May 19, 2011,

The Kaiser Family Foundation: Medicare Policy,

“Projecting Income and Assets: What Might the Future Hold for the Next Generation of Medicare

Beneficiaries?” June 2011,

Senators Tom Coburn, M.D. and John Barrasso, M.D, “Medicare & You,” 2012,

A Doctors' Note On Medicare Page 8