Part 1: Insolvency - The end of Medicare as we know it:
Bottom Line: Here's a riddle, how can 12 months pass but two years be lost in the process? It must be a Government run program. In part one of the looming insolvency of the US entitlement programs we're looking at Medicare. The annual report on the state of the Medicare "Trust Fund" wasn't pretty. Here are the high/low lights for Part A of Medicare:
Projected insolvency is now 2029
In the first year of insolvency only 88% of benefits would be available
Here are the changes from last year's report:
- Initial insolvency date (2029) one year worse than last
- In the first year of insolvency 88% of benefits would be available (1% better than last year)
So that's how only 12 months can pass and two years worth of solvency have been wiped away. Medicare, which nearly 55 million Americans (and counting) currently rely on, is on track for insolvency in just 12 years. And that's assuming that the timeline doesn't speed up still further in future years. It's not a question of if but when we're going to be forced to address the looming crisis in Medicare. The question is if we want to wait until its a crisis because of the lack of political will to do the right thing.
When Medicare was created the average life expectancy was 69. Today it's 80 and could continue to rise. Aside from cost overruns and Medicare fraud - which are huge issues for the program - what Medicare is expected to do today vs. what it was expected to do forty years ago is vastly different. Somewhere along the way prudent reform will likely have to include age adjustments and indexing Medicare to life expectancy - if we're serious about solving issues without Band-Aids.