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The Medicaid/Medicare crisis

A recent Congressional Budget Office report indicates the Medicare trust fund will be insolvent by 2019, a full 23 years before the earliest projections for the Social Security fund. And, problems will abound well in advance of that potentially fateful date.
As reported by California HealthLine;
“According to (CBO Director) Holtz-Eakin, Medicare and Medicaid currently consume 4% of the U.S. gross domestic product, but that proportion could rise to 20% in the next 50 years if changes are not made (Reuters/Arizona Daily Star, 2/1). He also estimated that prescription drugs will make up 20% of all Medicare spending within 10 years (CQ HealthBeat, 1/31).
Among the potential solutions to the Medicare/Medicaid crisis (all of which are politically treacherous) are cuts in benefits; increase in retirement/eligibility age, reducing payments, increased provider competition, and the old favorite, eliminating waste.
Watch what happens with Medicaid this year to get a sense for where the Administration is heading on Medicare in the future.

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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