Medicare Trustees Report Deficit Sooner Than Expected

May 14, 2011
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The latest news from the Medicare front has nothing to do with the latest Paul Ryan salvo against the entitlement. It’s the overall health of the program that has eyes concerned. Five years sooner than expected — that’s how quickly the feds say that funds are being consumed. According to trustees, the earlier deficit projections are the result of the poor economy, resulting in decreased collections from payroll taxes; continued current rates of Medicare spending without the influence of reform; and fraud.

The latest news from the Medicare front has nothing to do with the latest Paul Ryan salvo against the entitlement. It’s the overall health of the program that has eyes concerned. Five years sooner than expected — that’s how quickly the feds say that funds are being consumed. According to trustees, the earlier deficit projections are the result of the poor economy, resulting in decreased collections from payroll taxes; continued current rates of Medicare spending without the influence of reform; and fraud.

Don’t let those trustees’ predictions fool you. I, and many others who closely watch developments like these within the realm of health policy, believe that the outlook for Medicare is more grim because those original projections assume cuts in reimbursements to doctors that Congress has usually already applied as a matter of course, and overall cost savings are usually difficult to predict, regardless. As a result, Medicare legislation needs scrutiny — and fast. The longer lawmakers sit on numbers like these, they’ll have to apply emergency stopgaps no one wants — huge tax increases[1] or program cuts — to save the program. | LINK

  1. Medicare, to stay solvent for the next 75 years, would have to immediately raise payroll taxes by 24 percent, or cut current benefit payments by 17 percent.
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