For Medicare’s Birthday, Democrats Advance Its Demise

Medicare and Medicaid Face Serious Financial Crises 45 Years After Their Creation, but Democrats’ Plan is Bankruptcy, Benefit Cuts

• Today, on the 45^th anniversary of the Medicare and Medicaid programs opening enrollment, the future of both programs is very much in doubt, as both face serious financial challenges that threaten their viability, and Democrats are pushing policies that would hasten the programs’ bankruptcy and induce benefit cuts.
• The Obama-appointed trustees of Medicare last week reiterated the findings of their May 2011 report: that the Democrats’ plan for Medicare is to let it go bankrupt, requiring “real,” not merely hypothetical, 17 percent benefit cuts.
• Medicaid, too, faces a crisis, in part due to the government takeover of healthcare that dumped millions more Americans into the program without strengthening its finances. The weak economy has caused a growing number of Americans to depend on Medicaid, but because of the Democrats’ policies, the program stands to induce benefit cuts to those vulnerable Americans. Will Democrats renounce their strategy to bankrupt Medicare and induce benefit cuts in both Medicare and Medicaid?

BACKGROUND:

Today, July 1, is the birthday of the Medicare and Medicaid programs, 45 years to the day coverage under the programs first began. But now the future of Medicare and Medicaid is very much in doubt, as both programs face serious financial challenges that threaten their viability, and Democrats are pushing policies that would hasten the programs’ bankruptcy and induce benefit cuts:

“July 1, 1966: Medicare coverage began. All persons age 65 and over were automatically covered under Part A. Coverage began for seniors who signed up for the voluntary medical insurance program (Part B). More than 19 million individuals ages 65 and older were enrolled in Medicare.” (“Medicare: A Timeline of Key Developments,” Kaiser Family Foundation, Accessed 7/1/2011)

OBAMA-APPOINTED MEDICARE TRUSTEES: MEDICARE WILL GO BANKRUPT IN 2024, FIVE YEARS EARLIER THAN FORECAST LAST YEAR: “Medicare’s trust fund will run dry in 2024, five years earlier than forecast just last year, and Social Security’s will be exhaused by 2036, adding fuel to the debate over cutting one or both programs to reduce annual budget deficits.” (Richard Wolf, “Medicare, Social Security Money Running Out Faster,” USA Today, 5/13/2011)

“AS NUMBER OF MEDICAID PATIENTS GOES UP, THEIR BENEFITS ARE ABOUT TO DROP” WHEN SUPPLEMENTAL FUNDS RUN OUT STARTINGTODAY: “The Obama administration injected billions of dollars into Medicaid, the nation’s low-income health program, as the recession deepened two years ago. The money runs out at the end of this month, and benefits are being cut for millions of people, even though unemployment has increased.

“From New Jersey to California, state officials are bracing for the end to more than $90 billion in federal largess specifically designated for Medicaid. To hold down costs, states are cutting Medicaid payments to doctors and hospitals, limiting benefits for Medicaid recipients, reducing the scope of covered services, requiring beneficiaries to pay larger co-payments and expanding the use of managed care.” (Robert Pear, “As Number of Medicaid Patients Goes Up, Their Benefits Are About to Drop,” The New York Times, 6/15/2011)

The Obama-appointed trustees of Medicare last week reiterated the findings of their May 2011 report: that the Democrats’ plan for Medicare is to let it go bankrupt, requiring “real,” not merely hypothetical, 17 percent benefit cuts:

DEMOCRATS’ PLAN FOR MEDICARE WILL END “MEDICARE AS WE KNOW IT”: REP. PETER ROSKAM (R-IL): “In fact, Medicare as we know it will end in 2024 absent some change in policy or some change in moving forward. That’s right isn’t it?”

BLAHOUS: “Yes.” (Remarks from Charles P. Blahous, Committee On Ways & Means, U.S. House Of Representatives, 6/22/2011)

DEMOCRAT PLAN MEANS AN “IMMEDIATE 17-PERCENT REDUCTION” IN BENEFITS OR “IMMEDIATE 24-PERCENT INCREASE” IN TAXES: “The long-range financial imbalance could be addressed in several different ways. In theory, the standard 2.90-percent payroll tax and the additional tax 0.9-percent tax on high-income earners could be immediately increased by the amount of the actuarial deficit to 3.69 percent, or expenditures could be reduced by a corresponding amount. Note, however, that these changes would require an immediate 24-percent increase in the tax rate or an immediate 17-percent reduction in expenditures.” (pp. 28-29, “2011 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,” The Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 5/13/2011)

CUT IN BENEFITS UNDER DEMOCRAT MEDICARE PLAN IS REAL, NOT JUST HYPOTHETICAL: ROSKAM: “So that cut just so I’m clear, is not a hypothetical cut, it’s not a hypothetical delay, it’s an actual delay in payment to the point of reaching this 17% number based on your own projections. Is that right?”

BLAHOUS: “That’s right. The Social Security Act which deals with these trust fund issues is very explicit that payments can only be made from the trust funds.” (Remarks from Charles P. Blahous, Committee On Ways & Means, U.S. House Of Representatives, 6/22/2011)

AMERICAN ACADEMY OF ACTUARIES: BENEFIT CUTS COULD BE EVEN HIGHER: “The projected HI deficit over the next 75 years is 0.79 percent of taxable payroll. Eliminating this deficit would require an immediate 24 percent increase in payroll taxes or an immediate 17 percent reduction in benefits—or some combination of the two. Delaying action would require more drastic tax increases or benefit reductions in the future.” (“Medicare’s Financial Condition: Beyond Actuarial Balance,” American Academy of Actuaries, May 2011)

Medicaid, too, faces a crisis, in part due to the government takeover of healthcare that dumped millions more Americans into the program while paving the way for cuts to provider reimbursements that would limit access to care. The weak economy has caused a growing number of Americans to depend on Medicaid, but because of Democrats’ policies, the program stands to induce benefit cuts to those vulnerable Americans. Will Democrats renounce their strategy to bankrupt Medicare and induce benefit cuts in both programs?:

DUE TO GOVERNMENT HEALTHCARE TAKEOVER, “SEVERAL MILLION MIDDLE-CLASS PEOPLE [WILL] GET NEARLY FREE INSURANCE MEANT FOR THE POOR”: “President Barack Obama’s health care law would let several million middle-class people get nearly free insurance meant for the poor, a twist government number crunchers say they discovered only after the complex bill was signed. …

“Up to 3 million more people could qualify for Medicaid in 2014 as a result of the anomaly.” (“A Glitch in ObamaCare Could Give Middle Class Insurance Intended for Poor,” Associated Press, 6/21/2011)

CHILDREN WITH MEDICAID FACE LIMITED ACCESS TO CARE DUE TO PROVIDER REIMBURSEMENT CUTS: “Children with Medicaid are far more likely than those with private insurance to be turned away by medical specialists or be made to wait more than a month for an appointment,even for serious medical problems, a new study finds.

“Lower payments by Medicaid, delays in paying and red tape are largely to blame, researchers say. …

“Sixty-six percent of those who mentioned Medicaid-CHIP (Children’s Health Insurance Program) were denied appointments, compared with 11 percent who said they had private insurance, according to an article being published Thursday in The New England Journal of Medicine.

“In 89 clinics that accepted both kinds of patients, the waiting time for callers who said they had Medicaid was an average of 22 days longer.“(Denise Grady, “Children on Medicaid Shown to Wait Longer on Care,” The New York Times, 6/15/2011)