"The very last thing we ought to do is putting at risk the retirement security of millions of Americans." -- Debbie Wasserman Schultz, Chairman, Democratic National Committee
The 2012 Annual Report of the Boards of Trustees of the Medicare Trust Funds should be mandatory reading for any American planning to vote in November. It is not a partisan document.
Three of the six trustees are prominent Democrats and members of the Obama administration: Timothy F. Geithner, Treasury secretary, Hilda L. Solis, Labor Secretary and Kathleen Sebelius, Health and Human Services secretary.
The Medicare program has two components:
Hospital Insurance (HI), otherwise known as Medicare Part A, helps pay for hospital, home health, skilled nursing facility, and hospice care for the aged and disabled.
Supplementary Medical Insurance (SMI) consists of Medicare Part B and Part D. Part B helps pay for physician, outpatient hospital, home health, and other services for the aged and disabled who have voluntarily enrolled.
Part D provides subsidized access to drug insurance coverage on a voluntary basis for all beneficiaries and premium and cost-sharing subsidies for low-income enrollees.
(Medicare also has a Part C, which serves as an alternative to traditional Part A and Part B coverage. Under this option, beneficiaries can choose to enroll in and receive care from private "Medicare Advantage" and certain other health insurance plans that contract with Medicare. These plans receive prospective, capitated payments for such beneficiaries from the HI and SMI Part B trust fund accounts.)
So, what shape is Medicare in? According to the Medicare Trustees, "The estimated exhaustion date for the HI trust fund (Part A) remains at 2024 .... As in past years, the Trustees have determined that the fund is not adequately financed over the next 10 years."
Things are not as gloomy for the SMI component. "The SMI trust fund is adequately financed over the next 10 years and beyond because premium and general revenue income for Parts B and D are reset each year to match expected costs."
But if Medicare Part A fund is estimated to be "exhausted" in 2024, what will seniors do in 2024? If the fund is "exhausted" it isn't going to be there to pay for "physician, outpatient hospital, home health, and other services for the aged and disabled." Such payments as are made, will be reduced, and paid only from current revenues.
If the Medicare Part A fund will be "exhausted" in 2024, the head in the sand approach is abject stupidity. Debbie Wasserman Schultz (speaking of Social Security) says, "The very last thing we ought to do is putting at risk the retirement security of millions of Americans." But when the fund is heading to exhaustion in 12 years, doesn't doing nothing amount to "putting at risk the retirement security of millions of Americans?"
At the minute, there is only one candidate running for the presidency or vice-presidency who has put a plan to fix Medicare on the table. The response by the president, vice president and the Democrats has been to accuse that candidate, Congressman Paul Ryan, the only guy with the guts to put a plan on the table, of "wanting to push grandma and her wheelchair off the cliff."
Here is what Mr. Ryan writes on his website:
"It is morally unconscionable for elected leaders to cling to an unsustainable status quo with respect to America's health and retirement security programs. Current seniors and future generations deserve better than empty promises and a diminished country. Current retirees deserve the benefits around which they organized their lives. Future generations deserve health and retirement security they can count on. By making gradual structural improvements, Congress can preserve America's social contract with retired workers."
Not content with that "broad statement of principles," candidate Ryan proposes remedies to take effect in 2023, when those presently 55 and under begin to reach retirement age.
"Beginning in 2023, when workers currently under the age of 55 become eligible for Medicare, seniors would be given a choice of private plans competing alongside traditional fee-for-service option on a newly created Medicare Exchange.
"Medicare would provide a premium-support payment either to pay for or offset the premium of the plan chosen by the senior.
"The Medicare Exchange would provide all seniors with a competitive marketplace where they could chose a plan the same way members of Congress do.
"All plans, including the traditional fee-for-service option, would participate in an annual competitive bidding process to determine the dollar amount of the federal contribution seniors would use to purchase the coverage that best serves their medical needs.
"Health care plans would compete for the right to serve Medicare beneficiaries."
What is clear is that Mr. Ryan's remedy:
-- Does not effect current retirees.
Would be applicable only to people presently 55 and under who will reach retirement in 2023 or after.
-- Would give Americans reaching retirement age in 2023 a choice, to go with "a traditional Medicare Plan," or a "private plan."
Congressman Ryan's plan may be good or bad. But at least he has had the guts to put it on the table for debate. Calling Mr. Ryan or his plan names does not seriously address the issue. Running political ads showing a Ryan look-a-like pushing an old lady off the cliff is not serious discussion.
We deserve more from President Obama and the Democrats. What are the details of his plan to keep Part A from becoming exhausted? Doing nothing and avoiding the issue is not a "plan."
Medicare Part A is going broke. "Hope and Change" without more will not save Medicare. Where is the Harry Truman-type of leadership?
Posted Online: : Sept. 09, 2012, 5:00 am - Quad-Cities Online
by John Donald O'SheaCopyright 2012
John Donald O'Shea
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