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Wed Jul 22, 2020, 07:39 AM

Medicare is running out of money - Kaiser Health News


Everyone involved even tangentially in health care today is completely consumed by the coronavirus pandemic, as they should be. But the pandemic is accelerating a problem that used to be front and center in health circles: the impending insolvency of Medicare.

With record numbers of Americans out of work, fewer payroll taxes are rolling in to fund Medicare spending, the numbers of beneficiaries are rising, and Congress dipped into Medicare’s reserves to help fund the COVID-19 relief efforts this spring.

“I think we have a real, impending health care crisis,” said Dr. David Shulkin, who was undersecretary for health at the Department of Veterans Affairs under President Barack Obama for two years and led the VA for a year under Donald Trump.

In April, Medicare’s trustees reported that the Part A Trust Fund, which pays for hospital and other inpatient care, would start to run out of money in 2026. That is the same as the projection in 2019. But the trustees cautioned at the time that their projections did not include the impact of COVID-19 on the trust fund.

“Given the uncertainty associated with these impacts, the Trustees believe that it is not possible to adjust the estimates accurately at this time,” said the report.

So Shulkin, now a senior fellow at the Leonard Davis Institute of Health Economics at the University of Pennsylvania, did his own projections. Given even a conservative estimate of how many workers and businesses would not be contributing payroll taxes that finance Part A spending, he said, the trust fund could become insolvent as early as 2022 or 2023.

“I think this is something that needs more immediate attention,” he said.

Others who make projections agree the insolvency date is getting closer, maybe not as close as 2022.

This sounds like part of the (r)epuglicon's plan.

There is one other COVID-related policy that could hasten the depletion of the Trust Fund. At least $60 billion of the funding provided as part of the CARES Act to help hospitals weather the pandemic came not from the general treasury, but from the Trust Fund itself.

That money in “accelerated and advance payments” is supposed to be paid back, via a reduction in future payments. But there is a push in some quarters for that funding to be forgiven, which would make the Trust Fund’s hole even bigger.

It is not exactly clear what would happen if the Trust Fund were to become insolvent because it has never happened before. As the Congressional Research Service pointed out, “There are no provisions in the Social Security Act that govern what would happen if insolvency were to occur.”

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Reply Medicare is running out of money - Kaiser Health News (Original post)
erronis Jul 2020 OP
captain queeg Jul 2020 #1
erronis Jul 2020 #2
KWR65 Jul 2020 #3

Response to erronis (Original post)

Wed Jul 22, 2020, 07:59 AM

1. So now is a good time to cut payroll taxes?

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Response to captain queeg (Reply #1)

Wed Jul 22, 2020, 08:26 AM

2. It is a good time - if they want to slash social programs (Medicare, Social Security, etc.)

You can never blame them for finding an opportunity in a global crisis!

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Response to erronis (Original post)

Wed Jul 22, 2020, 09:51 AM

3. One step closer to Medicare for all

By the end of this decade Medicare for all will be the health insurance for America.

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