Skip to comments.Medicare Is On Death's Door ... After ObamaCare Supposedly Saved It (Insolvency by 2026)
Posted on 06/06/2018 10:19:14 AM PDT by SeekAndFind
The latest official report on Medicare's financial status says it will be insolvent in 2026 just eight years from now. So much for the promise that ObamaCare had fixed that program for the long term.
When he signed ObamaCare into law in 2010, President Obama bragged repeatedly that ObamaCare's combination of slowing down overall health spending, payment cuts to providers, improved productivity and quality, as well as less waste, fraud, and abuse would vastly extend Medicare's solvency.
He promised ObamaCare would guarantee that Medicare's "sacred trust between America and its seniors is never broken."
Turns out "never" isn't as far away as it used to be.
The annual report from the program's trustees says the hospital insurance "trust fund" will be insolvent by 2026, three years sooner than they predicted last year. When that happens, Medicare will only be able to pay about 90% of seniors' hospital bills, unless Congress hikes the payroll tax used to finance that trust fund, or reforms the program.
Either way, there is little time to act.
The reason for the downgrade: a combination of lower-than-expected payroll tax revenue and higher-than-expected spending.
Even the 2026 prediction is fanciful, because it assumes that ObamaCare's planned steep payment cuts to doctors and hospitals are left in place, even though they could cause "access to Medicare-participating physicians (to) become a significant issue."
When the trustees stripped out ObamaCare's unrealistic spending cuts, Medicare's financial picture gets worse faster, and grows far larger over the long term. (We have for years been pointing out that ObamaCare's claimed Medicare savings were a fraud.)
(Excerpt) Read more at investors.com ...
Oh, please. Medicare has been a cash-and-carry plan for a very long time, as has Social Security.
The “Trust Funds” are IOUs from the Treasury for real money that the US government spent when the plans were running a cash flow surplus (i.e., the payments were greater than necessary). The government spent those funds... which could have bought real, resalable assets... and issued a Treasury IOU, which is a receipt saying “we’ll pay this back in future taxes.”
I’m not saying we can continue this way forever, but the “end date” when the Fund will be broke is an accounting fiction. Until that time, and after that time, Medicare and Social Security will be funded from taxes (and bonds) raised during that year, regardless of the accounting entries.
I wonder how this will play out for those approaching the decision point of whether or not to enroll in Medicare vs. keeping private insurance or will private insurance pick up the difference in any drop in Medicare reimbursement rates or other variables not identified right now?
Obama was a total fraud...he didn’t have a clue what was in that bill. We had a chance to fix these problems but for John McPrick’s douchebaggery.
Medicare has been insolvent since 1986.
I have a friend whose husband is going to be turning 65 but is still working and has private insurance. She called me re: Medicare. I said get it now., stop paying for the primary insurance, and get a secondary. She was calling a broker I know.
Who cares what our working class elderly have to suffer, as long as the dregs can get free stuff?
Make sure that her husband’s doctors will accept Medicare or they should be prepared to change doctors and providers, if not.
Medicare has been operating in the red since 2008 and SS since 2010, i.e., benefits exceed revenue. The Medicare Trust Fund consists of non-market, interest bearing T-bills. Shortfalls between revenue and benefits are funded by cashing in the T-bills. The Medicare Trust Fund will be exhausted by 2026. By law, benefits will reduced to the amount of revenue.
40% of all Medicare expenditures already come from the General Fund. The premiums for Medicare Part B only cover 25% of the costs, by law. The other 75% comes from the General Fund. As a result, the costs of Medicare will continue to consume more and more of the federal budget as the population ages.
The "IOUs" in the Medicare Trust Fund are really no different than the T-bills held by China, Japan, etc. The Medicare and SS Trust Funds are included in our $20 trillion national debt.
This graph shows that the average man and woman (average defined in the study as average income over their working lives and living to the average life expectancy) who start receiving benefits in 2010 get over 3 times more in benefits than they pay in to the system! Of importance, the study accounts for inflation by calculating all past taxes and future payments in 2010 dollars to provide an accurate comparison.
If the notion that Medicare recipients are simply "getting back what they paid in" is false then where is the money coming from? Simply, the excess received is being borrowed from younger generations and the cost is more than we can bear.
This hulking mass of debt, which is largely attributed to Medicare, is by far the largest burden to future generation and greatly threatens our economic and societal well-being. Worse, the government's old age assistance programs are nearly defunct. Each May, the Social Security and Medicare Board of Trustees publishes their report on the financial state of their programs. These latest figures are not surprising. They are roughly the same every year. Medicare and SS are heading over the cliff. They must be reformed by reducing benefits or increasing taxes or some combination thereof. They are unsustainable as currently structured.
Obama, and every Democrat who helped craft that horrendous law, knew exactly what was in the bill. The intent was to flood Medicare with all the poor people who, up until that time, were ineligible, and over-tax the system. With both Medicare failing as well as the entire healthcare system (via Obamacare) all the parasites would scream for government run healthcare across the board.
Obamacare supposedly saved Medicare? - after taking three-quarters of a trillion from planned Medicare spending to send to Obamacare and make the books look as though it was ‘affordable’? - it is to laugh......
Couldn't agree more.
And, as you point out, it is important for people who think that the Trust Funds are an asset in hand to realize they are a designated liability, part of the National Debt.
Are you sure you arr not thinking of mediCAID?
Both parties need to be onboard. Ryan was a fool to take the lead. Trump was smart to parrot the Dem meme.
A MESSAGE TO THE PUBLIC:
Each year the Trustees of the Social Security and Medicare trust funds report on the current and projected financial status of the two programs. This message summarizes the 2018 Annual Reports.
Both Social Security and Medicare face long-term financing shortfalls under currently scheduled benefits and financing. Lawmakers have a broad continuum of policy options that would close or reduce the long-term financing shortfall of both programs. The Trustees recommend that lawmakers take action sooner rather than later to address these shortfalls, so that a broader range of solutions can be considered and more time will be available to phase in changes while giving the public adequate time to prepare. Earlier action will also help elected officials minimize adverse impacts on vulnerable populations, including lower-income workers and people already dependent on program benefits.
Social Security and Medicare together accounted for 42 percent of Federal program expenditures in fiscal year 2017. The unified budget reflects current trust fund operations. Consequently, even when there are positive trust fund balances, any drawdown of those balances, as well as general fund transfers into Medicares Supplementary Medical Insurance (SMI) fund and interest payments to the trust funds that are used to pay benefits, increase pressure on the unified budget. Both Social Security and Medicare will experience cost growth substantially in excess of GDP growth through the mid-2030s due to rapid population aging caused by the large baby-boom generation entering retirement and lower-birth-rate generations entering employment. For Medicare, it is also the case that growth in expenditures per beneficiary exceeds growth in per capita GDP over this time period. In later years, projected costs expressed as a share of GDP rise slowly for Medicare and are relatively flat for Social Security, reflecting very gradual population aging caused by increasing longevity and slower growth in per-beneficiary health care costs.
“Last week, a new Congressional Budget Office (CBO) report updated the amount of money Obamacare robs out of Medicare from $500 billion to a whopping $716 billion between 2013 and 2022.”
Daily Signal 1/8/2012 article.
Dems have used Social Security and Medicare funds as a piggy bank for many, many years.
If Medicare and Social Security funds were used the way they were intended, there would be no problem
Trump has created a climate where many new jobs are opening up, and tax revenues are rising. One offshoot of that is that Social Security and Medicare funds are increasing.
All this hissing and moaning gets annoying after a while.
Next theyll try to saddle Trump with the demise if these programs.
So much bull stuff. Im beyond sick of it.
When is the money projected to run out for all of the crap the illegals are getting, food, medical care, housing, education, etc????????????? NEVER hear of that money running out. This is such TOTAL BS!!!!
Medicare isn’t on Death’s Door.
Title I might be.
The DoD might be.
Farm Subsidies might be.