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  • Morning Bell: Pictures of America's Medicare Mess

    Earlier this month, President Barack Obama sat down with world leaders at the G8 summit and bragged about his track record of supposed good governance — how he has worked to “bring down our deficits and debt over the longer term” and made “room to take a balanced approach to reducing our deficit and debt.” There are plenty of ways to shoot holes in the president’s pronouncement, but there is one glaring example of where he has come up far short — failing to address America’s growing Medicare crisis.

    In “Medicare at Risk: Visualizing the Need for Reform,” Heritage’s Kathryn Nix and John Fleming illustrate the facts about Medicare and why Washington must come to the rescue with innovative solutions to preserve the program today and into the future.

    President Lyndon Johnson signed Medicare into law in 1965, creating a program that today provides health insurance to some 48 million Americans. Now, though, that program is in desperate need of reform as the United States grapples with retiring baby boomers entering the system, increasing health care costs and a status quo that simply can’t be sustained.

    Case in point: Medicare spending is growing faster than the rest of the federal budget, and it’s the main cause of America’s long-term deficits. As Nix and Fleming show, Medicare’s costs are projected to shoot through the roof, surpassing Social Security, Medicaid, Obamacare subsidies and all other non-interest spending by 2050. Want more proof on how bad the situation is? By 2040, Medicare’s shortfall will account for 81 percent of the federal deficit.

    Here’s another disturbing fact: The number of workers per Medicare beneficiary is falling dramatically. Back in 1965, there were 4.6 workers contributing to Medicare for every person receiving benefits. Today, there are only 3.3 workers, and in 2030, that number will fall to 2.3. That falling ratio is leading to the program’s insolvency. And with longer life expectancy (which of course is a good thing), seniors today are collecting benefits for almost three times as long as when the program first started. That means the program is paying more benefits than ever before.

    Unfortunately, the situation isn’t going to get any better absent congressional action. The Medicare trustees (who issue reports on the program’s fiscal stability) project that under current law, Medicare will rack up $26.9 trillion in unfunded obligations over the next 75 years. In a more likely scenario, that number soars to $36.9 trillion. American taxpayers will pay the costs, and seniors will suffer the effects of a program that’s going broke.

    What’s that burden look like today? Working Americans pay for about 88 percent of seniors’ Medicare benefits through payroll taxes. Right now, that tax rate is set at 2.9 percent, costing a median household about $1,430 in 2010. But if Congress turns to tax hikes alone to cover the deficit in Medicare Part A (which covers inpatient care in hospitals), that rate would have to go up to 5.33 percent, costing that same household $2,630 per year.

    President Obama’s health care plan makes things even worse for the very seniors Medicare serves. Nix and Fleming show that Obamacare cuts $421 billion from Medicare in order to pay for other programs that aren’t even for seniors. On top of that, a large chunk of the Obamacare cuts come from slashing reimbursement rates for doctors, meaning that seniors’ access to health care providers is at risk, with 40 percent of providers in danger of closing their doors by 2050.

    It doesn’t have to be this way. The Heritage Foundation’s Saving the American Dream plan proposes reforms that would transform Medicare into a real insurance program that provides financial security to retirees and guarantees assistance to people who need it. Seniors will enroll in the health plans of their choice, much like Members of Congress and millions of federal employees do, and unlike today, all plans will include catastrophic protection.

    The picture of Medicare’s future is not a pretty one, and doing nothing about it won’t improve the situation. America can’t afford the status quo, and it’s time for leaders in Washington to do more than talk a good game, but to actually enact reforms that make sure Medicare’s promise can be kept for those who need it most.

    Quick Hits:

    Posted in Obamacare, Ongoing Priorities [slideshow_deploy]

    30 Responses to Morning Bell: Pictures of America's Medicare Mess

    1. ogieyoungnhip says:

      Sounds like a good plan to me~as large a problem as Medicare costs are is the massive problem of getting Congress to move forward with this or a similar plan.Sorry to say but I don't have much hope for that happening………..

      • Houndog says:

        First all funds going into Social Security/Medicare must be LOCKED BOX a PRIVATE ACCOUNT FOR SS/MEDICARE ONLY, PERIOD!
        All government employees including Congress must roll all retirement funds into SS and draw it on the same bases that other Americans. Those with retirement income of over $250,000. will be ineligible to draw SS, but can buy into Medicare.
        The same for America's Roads & Highways — Lock Box and only for ROADS, HIGHWAYS, BRIDGES, WHICH NO BRIDGE HAVING A LIFE OVER 40 YRS or Increase Traffic Flow of 25% – High speed Rail Service between major Cities

        Second part Next Comment.

    2. GOODBUSINESS says:

      Here is the fix for all the Government budget problems – if they would just get out of the way –

      RESTORE THE REPUBLIC – AND THE ECONOMY –
      The energy industry will save the USA – it will finance the rebuilding of our from raw materials [natural resources] altered in value adding manufacturing which will put the people back to work. The end result will be a doubling of the GDP over ten years and the problem will be solved until next time. End the EPA AND ENDANGERED SPECIES ACT – DO TORT REFORM and watch the hardest working most productive society on earth be reborn as the worlds industrial GIANT.

    3. Dr. Henry Sinopoli says:

      I most vehemently oppose Barry Obama's philosophy and governing, but after watching a television review of how some other countries handle health care and senior care, it seems there are workable models. Unfortunately because of our life-long politicians, and greed infested special interest groups we continue to spin our wheels.

      Interesting you have a picture of Mr. McConnell above…his life has been spent feeding off the public…Ehat is his great contribution?…Seniority. He will never have to worry about his health care…

      • O2BMe says:

        There are no workable models in other countries If you do your own research you will find those countries are going bankrupt because of their government programs and we, through the IMF, are propping them up. You wait for months in Canada for elective surgery and doctor appointments. Only their ER works. England is limiting services for the elderly and limiting medications. Do you want our government running our health system the way they have run the Post Office, the Railroads, Social Security, Medicare and Medicaid?

    4. this is the consequences of doing things that are unconstitutional in the first place.

    5. ken says:

      Their are 3 answers to the Medicare Problem__1] Americans pay as much as 10 or more times the amount paid for presription drugs as any oyher any people in the world. The farce called the FDA, the political payoffs to the Washingtom maggots, the lawsuit by our "humble, money sucking lawyers and the advertising of drugss [which which should scare any thinking individual off are all reasons__2] The food companies and doctors [ including "the obese person's choice", Dr. Oz] don't care or don't know what good healthy food is.__3] The cheating by the Medical People and the "allowing of cheating" by the government is out of control .

    6. Alice says:

      Every Person who is a United States Citizen Worked and payed in to this program . But the United States government has decided to let Illegals come here and to give them everything for free even tho they work under the table
      This is the truth because my neighborhood has changed.
      But you know what There is nothing that can be done. I feel sorry for what was once the greatest Nation on Earth. May God bless the United States of America.

      • Anthony says:

        They don't get everything for free. They work to pay rent and bills just like you.

        • Linda says:

          Illegals are also taking 4.2 BILLION from our pockets in tax deductions for children that don't even live in our country and the IRS knows it. What would that money do for the country? We need reforms on the IRS to stop this insanity!

        • Bobbie says:

          not at the cost everyone else is accountable for…
          ever hear of "sanctuary cities?" It doesn't say that in the name of self reliance and independent living. It costs the tax payers unfair taxes which to where illegal immigrants and who the government demeans as "minorities" are exempt. That's not America. No one or American should be seen less than anyone else.

        • Bobbie says:

          they work for cash and live in "sanctuary cities" where government qualifies them to live off everyone else to get the vote from them while government treats them as inferior in paying their bills responsibly and living free.

      • Tony Tiger says:

        You are so ignorant Alice, you do remember the US was made up of illegals that landed in the NE of the US and killed the locals. So, what's the problem today, Illegals continue to go in to the US, so what.
        Or, wait a minute, myabe you are intelectually challenged and do not posses the ability to speak other languages and you feel less secure of yourself.

        • George Washington says:

          Hey doc, why don't you come spend some time at our local VA, check out those long lines and long wait times. We have some great people in our VA system, but it's a typical govt op. BTW, why is Great Britian going back to priviatzed health care?

        • George Washington says:

          Uh Tigger, who did the Indians take this land from?

    7. Jolene says:

      One more good reason to concentrate on more jobs in the U.S. That equals more tax income, which goes a long ways to helping solve many of these debt issues. More jobs would give more returning service men and women the income they deserve, as well. Cutting off the illegal pay outs and services would be a major factor as well. Supposedly our educated Congressmen know how to create jobs… if they only would just do that, and ignore politics for a few hours. May God bless the United States of America.

    8. Jeanne Stotler says:

      Medicare fraud is rampant, and no one does a thing to stop it. I got statements from both Medicare and BC/BS saying I had been to a foot doctor, I called both and neither did a thing. Medicare told ME to call them, I did, doesn't mean it was corrected and I have no wa o fnding out. As a nurse I sw a lot of fraud, w let those who have never paid into it collect, and medical org. collecting huge bown up charges. If medicare and Ins. co. were billed what a person with cash pays, the cost of premiums an other cost would come down. Leave federal gov't out of the picture.

    9. @egbegb says:

      Why are the Medicare and Social Security ratios different –
      NumberOfContributors / numberOfBeneficiaries for
      Today and 2030?

      Aren't the contributing populations for both programs the same?

    10. billstanley1 says:

      If my Medicare taxes and premiums had been placed in a private account and earned 6.34% per year, my Medicare premiums and the interest during the period I have been on Medicare would have paid for my Medicare benefits. When I die, my heirs would receive $139,000. Instead, they will receive nothing from Medicare. http://www.newsandopinions.net

    11. allen says:

      Read History and You will see it nothing but a Democrat re-play of "Tammany Hall Rerun". All the Green Give-aways, Billions you will find. The honest men are on their way in November.

    12. Ron Ruby says:

      I am on Medicare not by choice but required to do so once I turned 65 by my insurance company. I can afford to pay for my insurance and would prefer to do so, but not allowed. My question is how many of the 48 million presently on Medicare can do the same, therefore releasing the system of some of the burden.

    13. Linda says:

      There is another reason for the drop in the number of workers per Medicare beneficiary: abortion. We have allowed the murder of generations of those who would have been carrying some of the burden. When we continue in evil, we reap what we sow.

    14. Jim says:

      As Gomer Pyle so often said to Sgt.Carter—"surprise,suprise"!!!!!!!!!!!!!

    15. Al Connellyl says:

      The concept is good but the devil is in the details. Some of the current shortfall is due to the reduction of FICA tax to the individual and this has been touted as a "TAX HOLIDAY" when in truth it is negatively impacting the SS funding. The "Flat Tax" savings sound good but are subject to lobbying strength of current financial and tax planners which politicians will yield to and do not purport a reduction in the size and scope of the IRS! The additional income of SS retirees is not defined. Are deductions from an individual's current savings included in this calculation or is this based on defined benefits and other retirement support plans? If savings utilization is included this is an unreasonable solution that further takes away from those who are frugal while working so as to live better in retirement. The SS solution should not allowed any citizen to "opt out" and should be at least at the 6.2% level. (Too many citizens fail to save due to emergencies, procrastination, etc. and could greatly burden the re-designed system. ) There too many holes in this plan to endorse it especially given all is dependent on politicians. The political system must also be changed to terminate "career politician" and provide for true representation of the people.

    16. Al Connellyl says:

      First and foremost it is high time for politicians to stop calling SS and "entitlement". We worked, saved, and some of us delayed retirement past the age of 70 to provide a better retirement life style. Now you are asking those of us who were diligent and denies ourselves luxuries so we could have a bigger nest egg to forgo our benefits based on our ability to supplement our SS payments? This is where I start to believe both political parties are in favor of redistribution of wealth and we are penalized in the same maner as the hard working Ants to the benefit of the lazy Grasshopper. The true problem with the current system is that politicians used funds invested by hard working Americans for other purposes and programs and further burdened the system by making payments to people who never contributed and failed, and continue to fail, to police the programs that "steal" from the funds robbed from the working public.

    17. Liz says:

      Why not put medicare back to where it used to be? That is in it's own separate account. Johnson decided to put it into the general fund and it has gone down hill ever since. It could work it's way back. My Dad paid in all of his life and died at 60. NO medicare. On the other hand, my Mom lived to be 93. Things balance out.

    18. Sandy says:

      I believe the answer may be put Americans back to work. Imagine the Congress not being able to get their checks, because there are not enough Americans working so they can collect. We pay out so much to keep Americans on Medicaid, collecting when they don't work. Ticks me off they still consider SS an entitlement, when I've paid into it for 57 years. How I'd love to sue the Government for the money I've given them.

    19. JoAnn says:

      I believe that, if senior citizens have another insurance, besides Medicare, then that person needs for their regular insurance be the primary, and Medicare be the secondary. It would save Medicare for a much longer time. The only senior citizens that would have Medicare, then that would be their primary.
      After all, senior citizens pay the most for their regular insurance, and that should always be their primary.
      Also, I agree with LIZ, Medicare needs to be put back where it use to be, AND also with SOCIAL SECURITY.

    20. Blair Franconia, NH says:

      Confucius say, "He who toots his own horn, in the end, gets tooted."

    21. 2D Okie says:

      The gov.(congress & the executive) have the statisical capabilitiy to avoid any problems with any of the federal programs…if they would pursue that particular objective without trying to suck up to every adjacent interest or finding some way to enrich themselves and just serve the PEOPLE!!

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