Is Medicare Broken

Recently, I have heard some comments saying Medicare should be used as the basis for health care reform. So, I thought I would do some research to see what is the true costs of Medicare. What I learned is shocking.

The Medicare Trustees current report (and these Trustees were ALL appointed by President Obama) states: “$38 trillion (260% of current GDP) would have been needed at year-end 2008 to fund over the next 75 years projected shortfalls for Medicare hospital coverage and to meet the federal government’s statutory obligation to pay its share of other Medicare benefits, including prescription drug coverage.”

As the baby boomers begin to retire in 2011 there will be over $40 trillion in unfunded liabilities associated with Medicare/Medicaid and Social Security. A number of economists have been asked how will this deficit be overcome. Their answer consists of the following approaches. 1. Raise taxes. Any tax increase to be meaningful must include the middle class since this is where the biggest source of revenue exists. 2. Reduce benefits. However, this is a political bombshell that would not fly. 3. Reduce coverage. This is the approach taken in Canada and England, i.e., reducing which procedures and care will be paid for. For example, in the U.K., persons over the age of 70 often are denied coverage for such procedures as breast cancer, prostate cancer, etc. The U.S. presents a unique prospective because hospitals must provide “free care” to the indigent. However, the remainder of the population, you and me, make up these costs since are medical bills are increased to make up this deficit. However, Medicare is paying less and less for its procedures and guess who is making that up? The general population has to make up the deficit to hospitals and doctors because Medicare does not pay its share of the costs. If doctors and hospitals are expected to make up this deficit the question becomes how long will they stay in business? 4. Delay benefits. This would result in the current workers having to continue to work until they are over 70 years of age.

If you think my comments above are farfetched read the letter sent by Baptist General of South Florida in which they announced that “Centers for Medicare and Medicaid Services (CMS) will no longer reimburse hospitals for certain specific conditions when acquired during the patient’s hospitalization. Pressure ulcer is one such condition CMS will not pay for if the pressure ulcer is acquired during the patient’s hospitalization. Although not always avoidable, CMS has taken the position that pressure ulcers are ‘reasonably preventable’ and will no longer reimburse hospitals…” http://www.baptisthealth.net/en/physicians/Documents/Wound_Care_Protocol_new.pdf

The nonpartisan Concord Coalition, citing data models from the Government Accountability Office, found that by 2027, Social Security, Medicare, Medicaid and net interest would consume all revenues collected by the federal government. By 2047, Social Security, Medicare and Medicaid alone would consume all revenues. By 2052 the economy will be in ruin.

So, in brief Medicare is broken and should not be used as a model for health care reform. And any politician who suggests Medicare be used as a model is a fool.
By Jim Pirretti