Enjoy Night ā½ 8448380779 ā¼ Call Girls In Gurgaon Sector 48 (Gurgaon)
Ā
Medicare at Risk: Visualizing the Need for Reform
1. The number WORKERS PER MEDICARE BENEFICIARY
of workers
4.6
Medicare at Risk
per Medicare Seniors receive more in Medicare beneļ¬ts than they pay in
beneļ¬ciary
edicare spending 4.0
Many believe that seniors pay for their own Medicare beneļ¬ts, but in fact, current workers
2021: $7,989
s falling
ļ¬nance current enrollee beneļ¬ts. In addition, most Medicare beneļ¬ciaries end up receiving
useholds is rising
hortfall PERCENTAGE OF GDP
3.3 $8,000 than what they paid in to the system.
more
2.8
ederal
%
7%
$400,000
ore of household income than
Workersā6%
contributions to FIGURES ARE FOR BENEFICIARIES $357,000 $357,000 Total Beneļ¬ts
nding VISUALIZING THE NEED FOR REFORM
Medicare arenāt set aside the
ll continue. Absent reform,
WHO RETIRE AT 65 IN 2011 AND Received
2.3
%
ortfall is the EARNED THE AVERAGE WAGE
orbrings ineconomy-crushing new
either own retirementā Projected
en the $300,000
m their %
5% Total
Federal Deļ¬cit $6,000
hey pay program.
s in the for current
spends on
ļ¬ts. Even 4.1% $238,000 DIFFERENCE
%
4%
2010: $170,000 $188,000 $297,000
eneļ¬ciaries. A main cause
realistic
policies in
$200,000
fshortfall
Medicareās growing
ustained, by %
3% $4,136
RICAN HOUSEHOLD $110,000 $128,000
nsolvency is that the ratio
1 percent of
. 2% 3.3%
$100,000
Paid by
f workers to beneļ¬ciariesMedicare
way federal (81%
of total
$119,000 Beneļ¬ciary
argeting Shortfall $60,000 $60,000 $60,000
s falling. 1% federal
deļ¬cit) $0
stees 2012 Single Male Single Female One-Earner Two-Earner
Budget Office, 0% Couple Couple
2012 2015 2020 2025 2030 2035 2040
1965 Source: C. 2001Steuerle and Richard B. Fisher, āHowFoundation, August 2011.
Chart 2 ā¢ Medicare at Risk heritage.org
Eugene
Reforming Our Senior Entitlement2011
Lifetime Beneļ¬ts and Contributions Point the Way Toward
Programs,ā NIHCM 2020 2030
Alyene Senger
Chart 9 ā¢ Medicare at Risk heritage.org
ource: Medicare Trustees 2012 report.
March 2013 John W. Fleming
Chart 3 ā¢ Medicare at Risk heritage.org
1985 1990 1995 2000 2005 2010 2015 2020
2. Medicare PERCENTAGE OF GDP
spending is 14%
growing faster
than the rest of 12%
the federal
budget 10%
Medicare
Entitlement spending is the All Other
8%
main cause of long-term Non-Interest
runaway federal deļ¬cits. Spending
Medicare is the fastest- 6% Social
growing program due to Security
retiring baby boomers and Medicaid,
rising health care costs. %
4% Obamacare
Subsidies
2%
Source: Congressional Budget Office 0%
(Alternative Fiscal Scenario). 2011 2015 2020 2025 2030 2035 2040 2045 2050
Chart 1 ā¢ Medicare at Risk heritage.org
3. Medicare shortfall PERCENTAGE OF GDP
is driving federal
%
7%
deļ¬cit spending %
6%
The Medicare shortfall is the
difference between the
money the program brings in %
5% Total Projected
and the money it spends on Federal Deļ¬cit
health care beneļ¬ts. Even 4.1%
%
4%
assuming that unrealistic
cost-containment policies in
current law are sustained, by %
3%
2040, Medicareās shortfall
will account for 81 percent of
the federal deļ¬cit. 2% 3.3%
Addressing runaway federal Medicare (81%
deļ¬cits requires targeting of total
1%
Shortfall federal
Medicare. deļ¬cit)
Sources: Medicare Trustees 2012
report, Congressional Budget Office, 0%
extended baseline. 2012 2015 2020 2025 2030 2035 2040
Chart 2 ā¢ Medicare at Risk heritage.org
4. The number WORKERS PER MEDICARE BENEFICIARY
of workers
per Medicare 4.5
beneļ¬ciary 4.0
is falling
3.3
Workersā contributions to 2.8
Medicare arenāt set aside
for their own retirementā 2.3
they pay for current
beneļ¬ciaries. A main cause
of Medicareās growing
insolvency is that the ratio
of workers to beneļ¬ciaries
is falling.
1965 2001 2011 2020 2030
Source: Medicare Trustees 2012 report.
Chart 3 ā¢ Medicare at Risk heritage.org
5. Longer life expectancy means longer enrollment in Medicare
The average life expectancy in the United States has increased since Medicare was created,
but the programās eligibility age has remained constant at age 65. As a result, seniors collect
beneļ¬ts for almost three times as long compared to when the program started.
79.5
0
80 YEARS OF AGE
Average Life Expectancy
5
75
Years
70.2
15 years Enrolled in
Medicare
0
70
5 years
65
Age of Medicare Eligibility (unchanged at 65) Note: Some ļ¬gures
from 2009
Source: U.S. Census Bureau.
re S e u r a through 2020 have
been extrapolated.
60
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Chart 4 ā¢ Medicare at Risk heritage.org
6. In projecting Medicareās cost, more realistic assumptions
show an even worse outlook
The Medicare trustees are MEDICAREāS TOTAL 75-YEAR Total: $36.9 trillion
required to base their UNFUNDED OBLIGATIONS
$35 TRILLION
projections on current law as
it is written. These
projections rely on $30
Total: $26.9 trillion $20.5 trillion
unrealistic assumptions,
such as Congress allowing $25
staggering provider payment Outpatient
cuts that will harm seniorsā $20 $14.7 trillion and Physician
access to care. The Services
alternative scenario paints a $15
more likely picture of the $9.7 trillion
programās cost. Either way, $10 $5.3 trillion Hospital
the future is bleak. Insurance
$5
$6.8 trillion Prescription $6.8 trillion
Drugs
Sources: Medicare Trustees 2012 $0
report, CMS Office of the Actuary. Current Law Alternative Scenario
Chart 5 ā¢ Medicare at Risk heritage.org
7. The burden of Medicare spending 2021: $7,989
on American households is rising
$8000 $8,000
Medicare is consuming more of household income than
care
ever before, a trend that will continue. Absent reform, the
efore,
situation will soon require either economy-crushing new
ion
$6000 $6,000
taxes or painful beneļ¬t cuts in the program.
2010:
$4,136
MEDICARE SPENDING PER AMERICAN HOUSEHOLD
ARE
$4,000
$2,000
1970: $129
$0
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Sources: Medicare Trustees 2012 report, U.S. Census Bureau.
Chart 6 ā¢ Medicare at Risk heritage.org
8. Medicare beneļ¬ts are paid for by working Americans
Approximately 88 percent of seniorsā Medicare beneļ¬ts are funded by taxpayers. Medicare
Part A is mandatory coverage funded by the payroll tax. But Medicare Parts B and D, which
cover outpatient services and prescription drugs, respectively, are voluntary and funded
primarily by general revenue.
40%
41% FUNDING SOURCES OF $549.1 BILLION
36%
SPENT ON MEDICARE IN 2011
$223.3 billion
30%
$195.6 billion
20%
8%
10% $42.5 billion 3% 12%
$19.2 billion $68.5 billion
0%
General Current All Other Drawing Down Medicare
Revenues Workersā Medicare HI Beneļ¬ciary
Payroll Tax Trust Fund Premiums
Contributions
Source: Medicare Trustees 2012 report.
Chart 7 ā¢ Medicare at Risk heritage.org
9. Seniors receive more in Medicare beneļ¬ts than they pay in
Many believe that seniors pay for their own Medicare beneļ¬ts, but in fact, current workers
ļ¬nance current enrollee beneļ¬ts. In addition, most Medicare beneļ¬ciaries end up receiving
more than what they paid in to the system.
$400,000
FIGURES ARE FOR BENEFICIARIES $357,000 $357,000 Total Beneļ¬ts
WHO RETIRE AT 65 IN 2011 AND Received
EARNED THE AVERAGE WAGE
$300,000
$238,000 DIFFERENCE
$188,000 $297,000
$200,000
$170,000
$110,000 $128,000
$100,000
Paid by
$119,000 Beneļ¬ciary
$60,000 $60,000 $60,000
$0
Single Male Single Female One-Earner Two-Earner
Couple Couple
Source: C. Eugene Steuerle and Richard B. Fisher, āHow Lifetime Beneļ¬ts and Contributions Point the Way Toward
Reforming Our Senior Entitlement Programs,ā NIHCM Foundation, August 2011.
Chart 8 ā¢ Medicare at Risk heritage.org
10. Obamacare raids CUTS IN MEDICARE DUE TO OBAMACARE, 2013ā2022
Medicare to pay
for other new Hospital services $260 billion
programs Payment rates in
$156 billion
Medicare Advantage
Projected Medicare savings DSH* payments and
from Obamacare donāt other Medicare $145 billion
improve the program. provisions
Instead, they pay for other Home health
new programs created services $66 billion
under the law that arenāt Skilled nursing
even for seniors. By slashing services $39 billion
reimbursement rates Obamacare cuts
instead of introducing real All other services $33 billion $716 billion
reform, the health law from Medicare
jeopardizes seniorsā access
to providers. Hospice services $17 billion
$0 $50 $100 $150 $200 $250
billion
Source: Congressional Budget Office * Disproportionate Share Hospital, meaning payments that go to hospitals that
report. serve a large number of low-income patients.
Chart 9 ā¢ Medicare at Risk heritage.org
11. Cutting provider PHYSICIAN
PAYMENT RATES
100%
of Private
payments to Insurance
Payment
lower Medicare Rates
costs will hurt 80%
access 75%
Ratcheting down Medicare
payments to contain the 58% 58%
programās cost growth will
limit seniorsā access to care. 50%
Medicaid, the government
health program for the poor, Medicare
already sets provider Medicaid*
26%
payment rates far below 25%
private insurance, creating
similar barriers to care for
enrollees.
0%
2012 2086
Sources: CMS Actuaryās 2012
Illustrative Alternative Scenario. * Average of all states.
Chart 10 ā¢ Medicare at Risk heritage.org
12. Seniors face PERCENTAGE OF HOSPITALS, SKILLED NURSING FACILITIES, AND HOME
severe access HEALTH AGENCIES THAT WOULD OPERATE AT A LOSS
45%
problems 40%
because of 40%
Obamacare cuts 35%
Obamacare makes deep
30%
cuts to provider payments
to offset the cost of new 25%
25%
programs that arenāt for
seniors. If these deep cuts
20%
go into effect, many
providers will operate in 15%
15%
the red, making it very
difficult for seniors to
10%
access their services.
5%
Source: Medicare Trustees 2012 0%
report. 2019 2030 2050
Chart 11 ā¢ Medicare at Risk heritage.org
13. Small Medicare PROJECTED MEDICARE SAVINGS DUE TO HERITAGEāS MEANS TESTING
reforms can make $200
2037: $179 BILLION
a big difference
Keeping Medicare āas we
know itā is unsustainable.
$150
A simple reform such as
raising upper-income
beneļ¬ciariesā premiums
and gradually phasing out
taxpayer subsidies for the $100
wealthiest retirees (about
3 percent) would save 2014:
hundreds of billions of $39 BILLION
dollars.
$50
Source: Calculations by the Heritage
Foundationās Center for Data
Analysis based on baseline data in
the current projections and data
provided by the Peter G. Peterson $0
Foundation. 2014 2015 2020 2025 2030 2035 2037
Chart 12 ā¢ Medicare at Risk heritage.org
14. Heritage plan MEDICARE SPENDING AS PERCENTAGE OF GDP 6%
would rein in 6%
excessive
Medicare
spending Current Law
Heritageās comprehensive 5%
Medicare reform would
ļ¬nancially preserve 4.5%
5%
Medicare for future
generations while also
improving it as an
insurance program for 4%
Americaās seniors.
Heritage Plan
Source: Calculations by the Heritage
Foundationās Center for Data
Analysis using data from the 3%
Congressional Budget Officeās 2012
Long-Term Budget Outlook. 2013 2015 2020 2025 2030 2035 2037
Chart 13 ā¢ Medicare at Risk heritage.org
15. The Health Care Intiative is one of 10 Transformational Initiatives making up The Heritage Foundationās
Leadership for America campaign. For more products and information related to these Initiatives or to learn
more about the Leadership for American campaign, please visit heritage.org.
The Heritage Foundation is a research and educational institutionāa think tankāwhose mission is to formu-
late and promote conservative public policies based on the principles of free enterprise, limited government,
individual freedom, traditional American values, and a strong national defense.
As conservatives, we believe the values and ideas that motivated our Founding Fathers are worth conserving.
As policy entrepreneurs, we believe the most effective solutions are consistent with those ideas and values.
214 Massachusetts Avenue, NE ā¢ Washington, DC 20002-4999
(202) 546-4400 ā¢ heritage.org