BREAKING: Medicare’s Actuary Debunks Latest Trustees Report
The Trustees of the Medicare program have released their annual report, in which they conclude that the program is expected to remain solvent until 2024.
Yet, Medicare Chief Actuary Richard Foster, in his “Statement of Actuarial Opinion,” concludes that “the financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range…or the long range.” As Avik Roy explains:
Medicare’s reimbursements to doctors are scheduled to drop by 31 percent on January 1, 2013. Only then is Medicare solvent until … 2024. If Congress passes another of its numerous “doc fixes,” Medicare’s insolvency will be even closer at hand. The optimistic insolvency estimate from the Trustees will require “unprecedented changes in health care delivery systems and payment mechanisms,” without which Medicare fees “are very likely to fall increasingly short of the costs of providing those services.”
So under the most optimistic best case scenario we have about 12 years? Wonderful. This means we have what, maybe 4 or 5 realistically?
Sounds like Bernie Madoff accounting.
Issuing a Trustees report with such unrealistic projections is a waste of time and money, and it erodes the confidence that we have left in government.
Wow! What the Trustees Report basically says is that if America’s 778,000 doctors are willing to work for free, the Medicare program is solvent for only another decade. Great news indeed!!!
If doctor reimbursement rates fall that much, seniors will have difficulty finding doctors. Like others with difficulty accessing physcians, I guess they will end up in emergency rooms — imposing higher costs on Medicare than the “savings” on the physicians’ fees.
They’ll get their tax hike. Given all of the voting seniors and the AARP’s clout, they’ll get their tax hike.
Scary graph. It will never happen.
Medicare will never be insolvent. The US Treasury writes the checks right now for Medicare claims and will go on doing so. The Medicare Trust Fund is a not-so-useful fiction.
Persons over 65 are a very large portion of actual voters, and this will not change in the next 30 years. Congress will not permit the Treasury to stop writing checks.
The real problem is that Medicare spending will gobble up the Federal budget like Pac-Man. Just by 2020, Medicare spending with no changes will be about $1.2 trillion. Contrast that with the fact that all federal tax revenues in 2010 came to $2.1 trillion. No one that I read sees any chance that federal tax revenues will grow as fast as Medicare.
Finally, the doctor fees are somewhat of a sideshow in Medicare cost control.
Everyone has a doctor, so this is something the public can dig into.
However, most Medicare spending takes place in hospitals. Between 1990 and 2010, Medicare spending on hospitals went from $60 billion to $240 billion, rough numbers. The number of seniors on Medicare went from 34 million to 47 million, and hospital admission rates did not increase.
In other words, the hospitals have squeezed more money out of Medicare. This is what must stop. Ignore the doc fixes.