Is Medicare Solvent and Sustainable?
By Lee Goldberg and Sabiha Zainulbhai
Medicare is the nation’s primary source of health care coverage for more than 48 million elderly and disabled Americans. In 2010, Medicare accounted for 15.1 percent of the federal budget and 3.6 percent of gross domestic product (GDP).1 Its viability is vital for both the financial security of the people who depend on it now and for taxpayers who pay into Medicare and will rely on it in the future.
Solvency and Sustainability Defined
Solvency and sustainability are two useful but very different concepts for assessing the financial health of the Medicare program.2 At a time when Medicare is at the forefront of national political debate, it is essential to think about both Medicare’s solvency and sustainability without muddling the two terms.
Solvency is a measure of whether Medicare’s two trust funds – the Hospital Insurance (HI) Trust Fund and the Supplementary Medical Insurance (SMI) Trust Fund – are able to pay the full cost of benefits prescribed by law on a timely basis. Sustainability is a much more subjective concept, one that cannot easily be addressed by the annual calculations of the Medicare trustees. Instead, it is a concept that is intended to reflect societal values and the political viability of the program as currently structured. Sustainability asks whether future Medicare spending is at a level that Americans are likely to be willing and able to pay for, based on projections of economic growth and spending.3
http://www.nasi.org/sites/default/files/research/Is_Medicare_Solvent_and_Sustainable.pdf?
http://www.nasi.org/sites/default/files/research/Healthcare_Spending_Trends.pdf?
Medicare is the nation’s primary source of health care coverage for more than 48 million elderly and disabled Americans. In 2010, Medicare accounted for 15.1 percent of the federal budget and 3.6 percent of gross domestic product (GDP).1 Its viability is vital for both the financial security of the people who depend on it now and for taxpayers who pay into Medicare and will rely on it in the future.
Solvency and Sustainability Defined
Solvency and sustainability are two useful but very different concepts for assessing the financial health of the Medicare program.2 At a time when Medicare is at the forefront of national political debate, it is essential to think about both Medicare’s solvency and sustainability without muddling the two terms.
Solvency is a measure of whether Medicare’s two trust funds – the Hospital Insurance (HI) Trust Fund and the Supplementary Medical Insurance (SMI) Trust Fund – are able to pay the full cost of benefits prescribed by law on a timely basis. Sustainability is a much more subjective concept, one that cannot easily be addressed by the annual calculations of the Medicare trustees. Instead, it is a concept that is intended to reflect societal values and the political viability of the program as currently structured. Sustainability asks whether future Medicare spending is at a level that Americans are likely to be willing and able to pay for, based on projections of economic growth and spending.3
http://www.nasi.org/sites/default/files/research/Is_Medicare_Solvent_and_Sustainable.pdf?
Health Care Spending Trends:
Medicare and Private Health Insurance
Lee Goldberg and Sabiha Zainulbhai
Slowing the growth of health care spending continues to be a major domestic policy challenge. In 2010, total U.S. health expenditures reached $2.6 trillion – 18 percent of gross domestic product (GDP).1 Although health care spending has slowed in recent years, it is projected to grow faster than GDP over the next decade.2 Medicare, the nation’s largest health insurance program, accounts for one in five health care dollars, and in 2010 accounted for 15.1 percent of the federal budget – a figure that is expected to reach 17.4 percent by 2020.3,4
There are many drivers of national health care spending, ranging from rising prices for medical services and
increasing reliance on new and more expensive medical technologies to our growing elderly population and
imperfections in the market for medical goods and services. While per capita spending for both Medicare and
private health insurance has increased in recent years, Medicare’s costs appear to have grown more slowly,
according to national health expenditure data compiled by the Centers for Medicare & Medicaid Services’
(CMS) (Figure 1).5 The data indicate that Medicare expenditures since the enactment of the Balanced Budget
Act of 19976 have grown by an annual average of 4.1 percent, compared to 6.4 percent for private health
insurance.Slowing the growth of health care spending continues to be a major domestic policy challenge. In 2010, total U.S. health expenditures reached $2.6 trillion – 18 percent of gross domestic product (GDP).1 Although health care spending has slowed in recent years, it is projected to grow faster than GDP over the next decade.2 Medicare, the nation’s largest health insurance program, accounts for one in five health care dollars, and in 2010 accounted for 15.1 percent of the federal budget – a figure that is expected to reach 17.4 percent by 2020.3,4
http://www.nasi.org/sites/default/files/research/Healthcare_Spending_Trends.pdf?
Report: Private Insurers Profit by Ripping Off Medicare
Researchers say private programs like Medicare Advantage just add waste; Call for reformed, expanded Medicare for All
New research by health care experts concludes that privately run insurance plans designed to supplement the Medicare system serve no truly useful purpose and instead of helping seniors receive better care, Medicare Advantage plans actually undermine traditional Medicare’s fiscal health.
By creating conditions where Medicare is overpaying premiums to these private (mostly for-profit) programs, the report—to be published in the forthcoming issue of International Journal of Health Services—found that as much as $282.6 billion dollars has been drained from Medicare since they were first introduced in 1985.
A majority of that waste, however, has been lost in the last eight years, the report says, following changes enacted under the Bush adminstration in 2003 which boosted Medicare payments to private insurers to nearly $85 billion through 2012. Those billions of dollars have taken a heavy toll on taxpayers, seniors, and ultimately—given the well-known impact of rising national health care costs—have helped drag down the entire US economy.
Bipartisan Spin on Medicare Plan
By MICHAEL COOPER, JONATHAN WEISMAN and ERIC SCHMITT
As Representative Paul D. Ryan debated Vice President Joseph R. Biden Jr. on Thursday night, he sometimes seemed to be defending his own past budget and Medicareproposals as much as his running mate’s plans — sometimes in misleading ways.
When Mr. Ryan was defending his plan to reshape Medicare so future beneficiaries would receive fixed amounts of money to purchase private insurance or buy into the existing government program — a model for Mitt Romney’s proposal — he described his plan as “bipartisan,” and called it “a plan I put together with a prominent Democrat senator from Oregon.” But he failed to note that he later lost that Democrat’s support.
Mr. Ryan was referring to a paper outlining a Medicare plan that he drafted in December with Senator Ron Wyden, a Democrat of Oregon. But Mr. Wyden withdrew his support of the plan after Mr. Ryan reduced the rate at which the federal subsidies would grow — a key point that could decide whether future beneficiaries would face higher out-of-pocket costs as a result of the new program.
A Drug to Quicken the Blood
By KATHLEEN SHARP
Santa Barbara, Calif.
AN anemia drug has likely harmed hundreds of thousands of patients, soiled the reputations of two Fortune 500 companies and shamed one of our legendary sports heroes, the cyclist Lance Armstrong. Only that last part was at issue in the United States Anti-Doping Agency report, released on Wednesday, that laid out the astonishing evidence against him. It didn’t explain the seductive power of the drug — an artificial blood booster called erythropoietin, or EPO for short — or how our health care providers and our culture pushed its irresponsible use.
EPO is a naturally occurring hormone that stimulates the production of red blood cells. As any anemic can tell you, without sufficient red blood cells we become exhausted, unhealthy and depressed. Those who couldn’t make natural EPO, like dialysis patients and people without functioning kidneys, had to rely on blood transfusions to get it.
But that changed during the biotech drug rush of the 1980s, when a start-up called Amgen found a way to genetically engineer the hormone. After patenting its artificial EPO, Amgen formed a partnership with the marketing mavens at Johnson & Johnson and boomed into the world’s largest biotech company.
Hailed as a wonder drug, EPO looked innocuous — 3,000 units of clear liquid swirling in a glass vial. To athletes, those tinkling vials also represented a way to “goose” the oxygen-carrying component of blood, increasing stamina. And really, what red-blooded American doesn’t crave more energy? Our literature is rife with fictional drugs that bestow superhuman abilities — like the “spice” found in Frank Herbert’s “Dune” — and so is our history; leaders from Grover Cleveland to John F. Kennedy used cocaine, “pep pills” or amphetamines.
But those energy boosts came with bad side effects. Not so, it seemed, with EPO, which was seen as safer than ephedrine, less risky than coke and more effective than a double espresso.
The Commodification of Health Care and the Search for a Universal Health Program in the United States
By Howard Waitzkin, M.D.
Robert Wood Johnson Foundation Human Capital Blog, Oct. 11, 2012
Robert Wood Johnson Foundation Human Capital Blog, Oct. 11, 2012
For better or worse, we treat health care in the United States as a commodity. We buy and sell it, and would-be patients who don’t have enough money to buy it must either rely on limited public assistance or go without care. In very real terms, it’s not just health care that we have turned into a commodity, it’s health itself, so it should come as no surprise that poor Americans die sooner than affluent ones, by an average of close to five years.
I observed this dynamic up close for the first time about 40 years ago, while working as a primary care practitioner in the clinic system of the United Farm Workers (UFW) Union in the 1970s (which, for a time, my mentors in the RWJF Clinical Scholars Program viewed as my required activity in clinical medicine). As I treated hard-working patients living in unhealthy circumstances, it was easy to conclude that one does not need to travel outside the United States to find the so-called “Third World.” As I observed with many of the patients I treated while working with the UFW, the living conditions of the poor contribute to ill health.
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