Medicare: Four Years to Insolvency

Peter Suderman of keeps a close watch on Federal fiscal issues. Here’s what he tells us from the recent annual report of the Medicare trustees.    

“The Medicare Trustees Report estimated that Medicare's hospital insurance trust fund will be insolvent in 2026. At that point, the fund will have to rely on incoming revenues, essentially operating on a cash-flow basis—and there won't be enough cash.”

“In 2026, the hospital insurance fund will be able to cover only about 91 percent of its bills. In the years that follow, that gap will grow only larger. Without changes to the program's financing, doctors, hospitals, and other medical providers will face rapidly reduced payments from the program. This will have ripple effects on the provision and availability of health care and on the wider American economy, roughly a sixth of which revolves around health care services.”

“The report also noted …that its fiscal forecast assumes that an array of cost-reduction measures, including a series of caps on Medicare physician payments and bonuses, will persist. But the trustees noted that Medicare's "long-range costs could be substantially higher than shown throughout much of the report if the cost-reduction measures prove problematic and new legislation scales them back."

Somehow the Democrats in Congress don’t grasp this. They are trying to enact lots of new Medicare benefits – when Medicare won’t be able to pay its bills just four short years from now. This will compound the irresponsibility and bring Medicare’s day of insolvency even closer than 2026.


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Enter Comment Here:

  • Hank Buermann
    commented 2021-12-18 07:09:03 -0500
    David Sinclair wrote a book called Lifespan that describes ongoing research on the sub-cellular process of aging. He suggests that we should approach aging as a disease and treat it as such on a research level. He makes the case, and it logically follows, that if you can get better control of the negative effects of the aging process much of the costs of treating the conditions and disabilities that accompany aging will go away. His presentation makes a compelling argument that this is within reach today. Rather than spend ridiculous amounts of money and time on the frivolous distractions that our governing bodies thrust upon us why should we not mount a Manhattan Project style assault on understanding this process and cut off the cost drivers of healthcare at the root. Have we gotten to the point where we are willing to be forced to accept the proposition that the healthcare industry is too big to fail for lack of business?
  • Hank Buermann
    followed this page 2021-12-18 06:54:43 -0500
  • David Flemming
    published this page in EAI Blog 2021-12-14 16:13:52 -0500