Tag Archives: Reform

Is Medicare in a debt crisis? Does Medicare need to be reformed?

Medicare is a social program that pays for the health care and prescription drugs of seniors. Forbes magazine explains the basic facts of the Medicare funding situation.

First, the facts:

Often lost in the campaign rhetoric and obscured by the opinionated news dominating the television and print media are the following background facts about Medicare, America’s most burdensome entitlement program given both the demographics and the growth expected in health care costs:

• Medicare is a taxpayer funded, government-run insurance program that is financially unsustainable in its current form. By all estimates, Medicare is spiraling into bankruptcy, with an unfunded liability of almost $38 trillion and a hospital insurance trust fund that will become insolvent in 2024, according to the 2012 Medicare Trustees Report.

• Medicare was already the single insurance program most likely to reject a claim, compared to all of the eight comparable private insurance plans studied in the AMA 2008 National Health Insurance Report Card. This rejection rate was double that of the private insurers’ average – those very same insurance companies vilified by President Obama as denying coverage to Americans.

• An increasing proportion of doctors are already not accepting Medicare patients. A 2008 report by the Medicare Payment Advisory Commission, an independent federal panel, said that 29 percent of its beneficiaries who were looking for a primary care doctor had a problem finding one. A 2008 survey by the Texas Medical Association that found that only 58 percent of the state’s doctors accepted new Medicare patients, and only 38 percent of primary care doctors did, a number shrinking due to government- decreed payment that is lower than cost. In the 2008 HSC national tracking survey, more than 20 percent of primary care doctors accepted no new Medicare patients (only 4.5 percent accepted no new privately insured patients) and about 40 percent of primary care doctors and 20 percent of specialists refused most new Medicare patients.

The rest of the article compares the Obama and Ryan plans for reforming Medicare.

Here’s a snippet:

President Obama’s plan for Medicare will not simply reduce access to doctors. According to the Medicare Trustees, Medicare payment reductions under the new law will cause hospitals, nursing facilities, and home health agencies to operate at a loss – 15 percent lose money by 2019, 25 percent by 2030, and 40 percent by 2050. The Trustees Report concluded the obvious – health care providers “would have to withdraw from serving Medicare beneficiaries, or shift substantial portions of Medicare costs to their non-Medicare, non-Medicaid payers.” Can American families with private insurance who already pay almost $1,800 per year – extra – for the underpayment by Medicare and Medicaid, subsidizing public insurance by more than $88 billion dollars per year, afford to add even more because of the president’s law?

Signed into law by President Obama is another nefarious method of reducing Medicare payments. A wholly unaccountable, government appointed 15-member Independent Payment Advisory Board, the IPAB, does not just “recommend” changes to reimbursements. It has unprecedented power to reduce (but not to increase) payments to doctors that the Secretary of Health and Human Services is required to implement. To be sure, the IPAB acts independently of the people, immune from Congressional oversight, and even beyond control of the judiciary – ensured in language within the law that isolates it from repeal.

The Paul Ryan plan changes nothing about Medicare for Americans 55 and older. Those who are younger than 55 will be given the option of choosing a private plan and then paying for it with a voucher provided by the government.

Paul Ryan teams up with Democrat Ron Wyden to push Medicare reform plan

Rep. Paul Ryan
Rep. Paul Ryan

From Investors Business Daily.


Pity the poor Democrats. Here they were counting on scaring seniors about GOP plans to “destroy” Medicare when Rep. Paul Ryan teams up with a prominent Senate Democrat to offer a compromise reform.

From the White House on down, Democrats were wringing their hands this week about the bi-partisan Medicare reform plan offered up by Ryan and Sen. Ron Wyden, D-Ore.

Their plan would shift Medicare from an open-ended health benefit to one in which the government provides a set amount of money for insurance. Seniors could choose from a variety of private, approved plans, as well as the traditional government-run Medicare.

The subsidy would be based on the second cheapest plan in an area, and if seniors wanted more expansive coverage, they’d have to pay the difference out of their own pockets. The reform would also cap the growth in Medicare.

[…]As one Democratic congressional aide told the New York Times, “this plan gives bipartisan political cover to Ryan and other Republicans against whom we have been waging a very successful political offensive.”

[…]While we prefer Ryan’s original proposal to his current one, it’s to his credit that he realized the political need to produce a bi-partisan compromise. Wyden, too, deserves credit for his willingness to buck his party and sacrifice short-term political gain for much needed long-term reforms.

I took a look at Wyden’s ACU ratings, and he has a 9.23 out 100. I have no idea how Ryan got this guy on board. It’s magic.

Entitlements programs are going bankrupt: how can we fix them?

From the American Enterprise Institute, a post that explains in brief how to reform each of the three largest entitlement programs so that they will not go bankrupt by the time today’s younger workers need them.

Here are the programs:

  1. Social Security (a social program to redistribute wealth from current workers to current retirees)
  2. Medicaid (a social program to provide health care to low income/low wealth Americans)
  3. Medicare (a social program to provide health care and prescription drugs to older Americans)

And here’s one of the solutions (for Social Security):

Social Security is the easiest entitlement program to reform and can be done without raising taxes.

  • The age should be gradually raised to 70 by 2065.
  • Benefits should be indexed to price inflation, not wage inflation, as the program’s purpose is to keep the elderly out of poverty.
  • Benefits should gradually be reduced for earners with high incomes. The system should be a way to keep individuals out of poverty, not create a dependent upper- and middle-class.

Together these three reforms would ensure Social Security stays solvent. The entire system, however, could be easily replaced with a new program designed to keep seniors out of poverty and empower them throughout their retirement. People should be given the incentive to work longer by eliminating the Social Security payroll tax for individuals over 62, and a basic income supplement should be provided to impoverished senior citizens. Workers should then be given ownership of their retirement savings by enrolling all workers 55 and younger into a retirement savings account funded by 5 percent of the worker’s earnings (2.5 percent from the individual and 2.5 percent from the employer). These simple reforms would create a system that  actually provides a safety net for needy citizens — all for 60 percent of what the U.S. currently spends on Social Security.

Click through for the other two problems and solutions.