Medicare is a national social insurance program, administered by the U.S. federal government, that guarantees access to health insurance for Americans ages 65 and older and younger people with disabilities as well as people with end stage renal disease. Medicare offers all enrollees a defined benefit. Hospital care is covered under Part A and outpatient medical services are covered under Part B. Medicare Part D covers outpatient prescription drugs. According to the 2012 Medicare Annual Report, the Trustees project that Medicare costs will grow substantially until Trust fund exhaustion occurs in 2024. This model is obviously in need of urgent repair.

Four Options for Saving Medicare

from NCPA,

Medicare is not unlike a Ponzy scheme with each generation getting more back than it put in.

The 50-year old Medicare program is showing its age. Medicare accounts for about one-fifth of medical spending, or about 3.5 percent of gross domestic product (GDP). Over the years Medicare spending per capita has exceeded income growth in the economy. Over the next 75 years the Medicare Trustees estimate Medicare spending as a percentage of GDP will rise anywhere from about 6 percent to just above 9 percent. The Congressional Budget Office baseline put the estimate even higher — about 12.5 percent.

Medicare is not unlike a Ponzy scheme with each generation getting more back than it put in — the balance of which is partly paid by borrowing and higher taxes on succeeding generations of taxpayers. How can the continuous rise in the taxes needed to pay for Medicare be remedied?

Option 1) Raising premiums through a means-tested program.

Option 2) Higher deductibles and co-pays and maximum dollar expenditures across all beneficiaries.

Option 3) Reference pricing and balance billing.

Option 4) Premium support adjusted for GPD.

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