Healthcare Must Be SUSTAINABLE

Health care spending exceeded $2 trillion dollars in 2006; this represents 16 percent of the GDP. The Centers for Medicare & Medicaid Services (CMS) project that health care spending will be more than $4.1 trillion by 2016, accounting for 19.6 percent of the GDP. Government spending accounted for 46 percent of total health spending in 2006. The federal revenue spent comes from two major entitlement programs, Medicare and Medicaid; federal spending on these two programs was 21 percent of the entire federal budget. Under present growth rates, Medicare and Medicaid spending will rise to 8 percent of the GDP by 2030, 14 percent of the GDP by 2050 and 31 percent of the GDP by 2082.

It is a fact that there will be a Medicare crisis before there is a social security crisis; the Medicare Part A, hospital, Extended Care Facility (ECF), along with other facilities, will completely eliminate the $326 billion trust fund by 2019. The 2008 Medicare Part A has only enough dedicated tax revenues to cover 94 percent of its spending, which will create debt.

The Medicare Trustees Report for 2008 states that Congress could bring Medicare Part A into balance either by reducing Medicare spending by 51 percent or by increasing payroll taxes from 2.9 percent to 6.4 percent. Medicare Part B (physician costs and outpatient services) faces rapid growth, from $187 billion in 2008 to $325 billion in 2017. This estimate assumes that physicians’ fees will be cut 40 percent over the next nine years.

Private insurance companies will not be able to mitigate the cost of losing Medicare and Medicaid through private coverage. Private insurance companies simply would not be able to afford to take care of the oldest or sickest patients because the premiums that they would have to charge would be too high for individuals or families to pay out of pocket. In 2004, health care spending per capita was $14,797 for individual patients over age 65 and $25,691 for individual patients 85 and older.

The loss of Medicare cannot be offset by policymakers, either. Policymakers cannot shift cost burdens to the states, which are facing rising costs and limited resources already. States cannot afford the burden of high Medicare costs.

There is no way to salvage the costs of coverage provided by Medicare besides continuing to make it a federal issue. Without revising the costs necessary to continue providing coverage, it is clear that not even the federal government will be able to handle the continually rising costs. None of the health care reforms currently under consideration by the government will save Medicare. Revising the system to work more efficiently so that we can provide coverage to all is the only way to save health care as we currently know it.