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Obama's FY 2014 Budget on Medicare
April 9, 2013
In part two of three, I take a look at the predictions of the President's FY 2014 Budget in how it might affect Medicare. Note: Figures are in ten-year windows (not the usual five-year increments under the BillTally project).
Current status: Via the Centers on Medicare and Medicaid Services (CMS), health care costs for disabled and senior Americans will continue to rise, so much so that the program could be insolvent by 2027. From 3.7 percent of GDP in 2011, the Medicare Hospital Insurance and Supplementary Medical Insurance Trust Funds will continue to grow in obligations to approximately 6.7 percent of GDP by 2086 (73 years from now). We're talking trillions of dollars in projected obligations that traditional funding methods, a mix of payroll taxes and regular government spending.
Possibilities for FY 2014:
Bottom line: Even if all of the savings realized, the structural problems of Medicare outweigh many proposals, even ambitious ones. Though streamlining payment processes and taking more money away from drug companies could help to offset some current deficits, taxpayers need trillion-dollar solutions to the economy’s biggest single expense program. On the other hand, by requiring drug companies to pay more to the government, prescription prices may increase.
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