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  • Medicare at Risk: Visualizing the Need for Reform

    Heritage’s new chart series, “Medicare at Risk: Visualizing the Need for Reform,” shows that, without the necessary structural reform, Medicare’s finances will have devastating consequences on the federal budget, not to mention taxpayers and seniors alike.

    Medicare’s Impact on the Budget. Medicare spending is rising faster than any other part of the federal budget, and it’s a major driver of runaway deficit spending in the not-so-distant future. Retiring baby boomers and rising health care costs will cause Medicare’s shortfall to contribute to 81 percent of federal deficits by 2040. Clearly, the federal deficit cannot be contained without addressing Medicare’s structural problems.

    Medicare’s Impact on Taxpayers. Medicare spending isn’t just busting the federal budget; its also consuming more of household budgets. In 1970, average Medicare spending per American household was $129. In 2021—just nine years from now—spending per household will be a whopping $7,987. Unless there is significant reform to deal with these rising costs, Americans will be faced with automatic benefit cuts or steep tax increases. The Medicare Part A payroll tax would have to increase by 84 percent just to make Part A alone solvent.

    A common misconception is that seniors pay for their own benefits, but actually Medicare is structured so that current workers pay for current retirees’ benefits. Meanwhile, the ratio of workers to beneficiaries is decreasing. In 1965, there were 4.6 workers per beneficiary, but by 2030, the ratio will have fallen to 2.3. The increase in beneficiaries and decrease in workers is one major cause of Medicare’s insolvency.

    Medicare’s Impact on Seniors. Obamacare did nothing to improve Medicare’s fiscal crisis. Even though Medicare spending falls by $421 billion under the health care law, the savings offset the cost of other provisions in Obamacare instead of shoring up Medicare’s deficits. Worse yet, Obamacare’s flawed method of controlling Medicare’s costs by cutting provider payments will significantly reduce seniors’ access to care. As the charts show, these profound cuts put 40 percent of providers in danger of closing their doors by 2050. As the number of beneficiaries rise, the number of providers cannot decrease without causing serious access issues.

    Medicare reform is vital if the program is going to be ready to handle what’s to come. To read Heritage’s plan to save Medicare, click here.

    Posted in Obamacare [slideshow_deploy]

    One Response to Medicare at Risk: Visualizing the Need for Reform

    1. mom46mom says:

      I think there are ways to make some cuts and establish limits. As Social worker I have worked many places. One place billed medicare and Medicaid for services. they wanted us to bill 1.25 hours for only 1 hour of service. How is this done. well Medicare has an 8 minute round up so if you bill something for 43 minutes, something for 8 minutes and then 8 minutes it rounds up so that would be 1 hour and 15 minutes. I would require any mental health services with the exception of the initial assessment to not be billed at over 1 hour. I would make anyone wanting to bill 1 hour 15 minutes get a pre authorization this is what private insurance does. Next there are people who are finished with talk therapy and only coming to remain on medications agencies are making them come in to see the doctor every 3 months which is standard. However, they are making medications only people come back every 3 to 4 months to do paperwork when the required paperwork is only due every 6 months. Private insurance does not require this these updates as assumed done when they see their psychiatrist. SO I would not allow these unneeded services to be billed. I would only pay for one initial assessment and then one review of a recovery plan and mental health update every 6 months to be done the same day they see the doctor so the services would bundle.
      I live in Illinois and a few years ago there were limits as to the number of sessions a Medicaid person could have. The limits were based on treatment history diagnosis. SO someone with a very serious long term illness could come several times a week. A person needing brief focused therapy could attend 6 to 10 times a year and the if they needed more be reviewed. Some places then changed how they coded services to get around these limits. I would reset the limits based on the individuals needs as defined by diagnosis, treatment history.
      I would also stop medicare and Medicaid from paying for court ordered or recommended treatment. In treatment ordered as a result of criminal court or parole should not be covered by medicare and medicaid. The individual states can decide if they want to fund or create community service programs to allow people to work for the costs of court and treatment. I would also run a very simple report to show that social workers counselor and therapist are only billing for the actual time worked or in direct contact with consumers . the amount of time billed should not exceed 75% to 80% of their work week or something is wrong

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