If the Jeopardy question is what health care system services 45 million people and is the center of the health care reform debate, the Jeopardy answer is clearly Medicare. Since Harry Truman sought the aid of the United States Congress in establishing a national health insurance plan in 45, Medicare has provided services for the elderly, the disabled and the disadvantaged. Questions about the federal health insurance plan’s solvency have been at issue for some time; however, Medicare was given a boost when President Obama enacted health care legislation designed to maintain its financial solvency through the year 2029.
Medicare’s complexity goes beyond the four basic plans, A, B, C and D, which cover inpatient care, physician costs, outpatient care and, prescription costs. The federal plan is funded through its Hospital Insurance (HI) Trust fund. For some time, experts realized that payroll tax receipts would not meet the expenditures of the program. Many predict that the MHI would be depleted by 2019 and that tax revenues would 78% of the plan recipient’s benefit costs. In narrowing the gap between income and expenditures, drastic reform would be needed.
Since Medicare is so crucial to the health care industry in the United States, President Obama recently enacted health care legislation, Affordable Care Act, targeted at salvaging Medicare and keeping it solvent until 2029. With Medicare’s fiscal picture at least momentarily brighter, the Act institutes a series of reforms that are proposed to generate billions in savings and improve the care patients receive. The Centers for Medicare and Medicare Services (CMS) has already begun the measures which should add at nearly $ 600 billion to the HI in the next decade. With the costs revisions and savings, Medicare Part B participants may also see reductions in their annual premiums.
Projections indicate that with this newest health care reform legislation, medical spending would be affected and would result in annual rate of 5.3%. Without reform, experts predicated the rate of Medicare spending would raise 6.8% per year.
While many are relieved by the new legislation and the hope of salvaging Medicare, concern for other programs, such as Social Security, loom in the background. For the first time since that programs inception, the money flowing out of the program exceeds money coming.