Medicare’s $100 Trillion Unfunded Liability

I’m a little late getting to this, but it’s important. The Democrats like to tell us that Obamacare is going to shore up Medicare, and that it’s already doing so. Don’t believe it, it’s a lie. The truth is frightening, but it’s something that needs to get out there.

From the Wall Street Journal:

Yet even with these unrealistic assumptions about Medicare costs, the future looks bleak. The unfunded liability in Medicare, the trustees tell us, is $34 trillion over the next 75 years.

Looking indefinitely into the future, the unfunded liability is $43 trillion—almost three times the size of today’s economy. Based on more plausible assumptions, such as those reflected in the “alternative” scenario for Medicare produced by the Congressional Budget Office in June 2012, the long-term shortfall is more than $100 trillion. …

So, what is the plan to deal with this mess? Cutting doctor fees.

As a result, Medicare will have to resort to a fallback mechanism: more cuts in provider fees. Were these cuts to be implemented, and if Medicare spending grew no faster than the economy as a whole, the problem of Medicare would be solved.

Yet studies by the Medicare actuaries in 2012 show that for this formula to work, the suppression of provider fees would have to be draconian. Medicare fees would fall below the reimbursement rates for Medicaid next year and fall further and further as the years go by. By 2030, for instance, doctors treating Medicare patients would be paid 40% of private health-insurance fees. The Medicare reimbursement to hospitals for inpatient treatment would fall to 60% of the private-insurance level.

From a financial point of view, senior patients will become less desirable than welfare recipients. Medicare’s Office of the Actuary is predicting that one in seven hospitals will completely leave the Medicare system by 2020 because of these pay cuts.

This is not a new problem. When the Affordable Care Act was passed in 2010, Medicare’s chief actuary, Rick Foster, said the cuts envisioned would damage access to care. Harvard health economist Joe Newhouse predicted that seniors may have to seek health care at the same places frequented by Medicaid patients today—at community health centers and the emergency rooms of safety-net hospitals.

Read the whole thing, as it explains how even the cuts in payments to providers won’t solve the problem. I guess that’s why they need the death panels. Remember,once you’re on Medicare the government won’t allow you to use your own money to save your own life. And once you opt into Social Security you’re stuck with Medicare whether you want it or not.