Campaign Medicare Debate

by George Burns

Several topics in this year’s presidential campaign grab the headlines – some important, some not.  Charges and counter-charges are hurled about by the candidates, their surrogates and the media with each side assuring the public that what candidate A says is right while candidate B is wrong or vise versa.  The result is a bewildering array of propaganda mixed with truths and half-truths.  And, on occasion, outright lies.  So, absent trustworthy facts on which to base decisions too many votes will be cast for the wrong reasons (good looking, good speaker, nice smile, agreeable promises, etc.) or trusting the lesser informed opinions of others.  Consequently, the only way to cast an informed vote is to fact check credible sources ourselves.

One of the more contentious issues in this campaign is Medicare, including the status of $716 billion taken from Medicare over the next decade to fund portions of Obamacare.  First, two relevant facts.  Medicare is in financial distress. The Medicare Board of Trustees in their 2012 Annual Report estimate that Medicare will only be able to pay 87 percent of expected benefits starting in 2024.  After that the “expenditures that can be financed with HI [health insurance] dedicated revenues will decline slowly to 67 percent in 2045, and then rise slowly until it reaches 69 percent in 2086.”  These projections are based on an uncertain future.  Thus, they are more likely to decline than improve.  Second, over the past 30 years Medicare has doubled as a share of the nation’s GDP and will double again in the next 30 years.  It is the second largest item in the entire federal budget and growing rapidly.  The pace of Medicare growth when coupled with Medicaid, Social Security and debt interest payments will consume the “entire” federal budget by 2025.  This means either dramatic cuts in government spending or huge tax increases will be required.

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