Third Party & Independents Archives

More Warnings About Medicare: Insolvency Likely by 2019

And the economic news just keeps getting worse and worse, under the stewardship of Bush Jr. Seems the new Medicare law will not cure all senior health care ills as the Republicans would have us believe. And with each passing day the law once hailed as the savior of seniors and the disabled, is nothing more then a prescription for disaster, one which might leave the Medicare trust fund drained of reserves by 2019, some seven years earlier then expected.

Health and Human Services Secretary Tommy Thompson and in his annual report on the Medicare Trust Fund stated that increased health care cost—which has to include prescription drugs—and decreasing revenues (tax cuts), are the primary motivators behind the revised forecast. He went on to predict that changes to the program called for under the new Medicare law will help slow the growth in spending, however, this predicated on seniors enrolling in managed-care programs.

Thompson stated

"When you use the opportunity to allow the free-market system to work, it has the tendency to drive down costs."

Am I missing something or haven’t health care costs risen exponentially over the last 20 years under the free-market system? The free-market has not held down the cost of health care thus far, quite the contrary, as Thompson points out in his own report, health care cost continue to rise at an alarming rate. What makes him, or anyone else think that as seniors and the disabled enroll in private managed-care programs, the cost of health care will even out and eventually decline? What indicators are there in today’s economy that this happy circumstance will come to pass?

Vocal opponents (democrats, independents and other people with common sense) of the newly enacted Medicare law state that there is little evidence the changes called for under the law will slow the growth in health-care costs. It is more likely they contend, that little will change and that as is the trend today, managed care companies will make it more difficult—not less—for seniors and the disabled to see specialists, and continue to line their pockets with the resulting profits.

The Medicare trustees report blamed last years “higher spending” and “lower tax revenues” as primarily responsible for shortening by two years the estimated insolvency date of the trust fund. Wasn’t it Vice President Dick Cheney who said—irresponsibly—that budget deficits were nothing to worry about? Seems they are indeed something to worry about.
The report went on the state that from 1998 to 2002, health care costs spiked 35 percent. By 2002, the last year for which figures are available, such costs accounted for nearly 15 percent of the nation's gross national product, and more than likely accounts for a higher percentage of GNP today. Last year, employer-sponsored health insurance premiums rose by 14 percent the report said. And this year my health insurance premiums rose some 12 percent over last year, and the price I pay for prescription drugs increased again for the fourth straight year. Yes, the free-market is really helping me lower my health care, and prescription drug costs.

Still think the Bush economic plan of tax-rebates and spending is good for the overall fiscal health of the nation? I go on record as saying that the Medicare Law needs to be repealed, and redone right, better still Bush and the Republicans need to go before the U.S. has to declare bankruptcy.

Posted by V. Edward Martin at March 24, 2004 10:50 AM