Medicare Solvency: Financial Analysis
Medicare Solvency
The Medicare Program is one of the largest social programs funded by the government to paid health care services for the elderly, disabled and individuals qualifying to receive Social Security benefits. It is financed by payroll taxes, premiums, and surtaxes from beneficiaries and it is currently divided into four parts A, B, C, and D. Part A is the Hospital Insurance (HI); Part B is the Supplementary Medical Insurance (SMI); Part C is the Medicare Advantage (MA) which is a combination of parts A and B, and Part D is the Prescription Drug Coverage (Shi and Singh, 2015).
There are three main factors that are affecting the Medicare solvency: the cost of health care services is growing faster than the general economy’s inflation
…show more content…
The slow wages growth and increased unemployment in 2010 were the causes of lower payments on payroll taxes resulting in a projected insolvency of 5 years earlier, 2024. Nevertheless, with the Medicare payment reduction and revenue increases included in ACA, as well as system reforms to improve efficiency and quality in patient care to reduce costs, we can expect a slower growth rate compared to historical trends, but regardless of the efforts, HI Trust Fund faces a medium long term deficit due to the upcoming increase of individuals older than 65 years old covered by Medicare and the decreasing relationship between employee’s tax contributions and health care expenditures. What is going to happen with the Trust Funds? Are we going to be covered by Medicare when we reach 65 years …show more content…
Medicare is facing challenges that need to be addressed for the future well-being of the Trust Funds, specially HI funds. There are several factors that can modify Medicare expenditures and therefore affect the projections. For example, the increase in the life expectancy, the aging of the population because of the Baby Boomers retire, a variation of unemployment rates, birth rates, death rates, labor force participation rates, wage increases, among other economic factors. What is going to happen after 2029? How are we going to pay health care services after retirement?
There are no provisions in the Social Secure Act that govern what would happen if insolvency were to occur (Davis, 2017). Hence, it is urgent to find a pathway for cost reduction.
The proposed Path to Prosperity initiative, form Chairman Ryan, includes major modifications to the fundamental basis of the program where Medicare would suffer a transition from defined benefit to a defined contribution (Petasnick, 2011). Is this going to be a solution or a problem?
The Pros And Cons Of Central States Pension Cuts
840 Words | 4 PagesMore than 40 years ago a pension was the best form of assurance for a financially happy life after retiring. In 2016, the Central States Pension Fund forecasted that it will run out of money in the near future. To potentially stop the fund from running out of money, it has proposed cuts to current and future pension payments. These cuts will affect not only thousands of workers, but could affect millions. As the director of the Central States Pension Fund it would be best to push for cuts on pension payments.
Long-Term Care: A Case Study
575 Words | 3 PagesThe proposed program will address the needs of minorities 65 and older at the time the program is implemented. Those taking part in the program would not loose any of the health benefits they are receiving from Medicaid under the current SSI health benefits insurance program. As well the person or persons must prove that they cannot afford to reside in a traditional long term care facility, such as a nursing home or assisted living, without incurring out of pocket cost. To be eligible, the individuals must be African American, U.S. citizen, reside in the state of Mississippi, and have a median $650 SSI income. As well they are not required to liquidate there asset’s and must reapply every year to reevaluate their eligibility.
Financial Reporting And Analysis: Harnischfeger Case
1163 Words | 5 PagesUnder the new pension plan, the employee’s pension benefits decrease, while the corporation’s net income increases. This may increase future pension costs in the long-run. 9. How did the pension plan changes affect Harnischfeger’s financial statements in 1984? Are these changes likely to affect future profits?
Medicare Pros And Cons
576 Words | 3 PagesIf You Have Medicare, Then It Is Important To Understand What It Does And Does Not Cover Prescription drug coverage for seniors was implemented as a part of Medicare in 2004. This coverage is known as Medicare Part D. Medicare D is offered through private insurance. It can be offered through plans that are affiliated with the Medicare Advantage Or A Stand-Alone plan. The system that was set up by Medicare to provide prescription drug coverage offers a lot of choices.
Long Term Impact Of The Social Security Act Of 1935
746 Words | 3 PagesThis paper will explore the long term impact of the Social Security Act of 1935. The Act was created by the Roosevelt administration. Roosevelt believed that the provision for the public was a matter of justice, and not a matter of charity. Although a social security bill was introduced on January 17, 1935, the act did not emerge. The existing federal and state aid and old-age pension laws formed a national policy of social security.
Medicare Part-A Case Study
390 Words | 2 PagesDear healthcare staff: The hospital is currently under financial difficulty and as a hospital administrator, I would like to explain to you how the Medicare (DRG) works. First, Medicare is a federal-sponsored health insurance program for individuals who are older than 65 years. Medicare also covers people with major debilitating conditions, such as End Stage Renal disease without any limit to household income. In order to qualify for Medicare, a person has to be a US citizen or with at least 5 years of permanent residence in the United States. Medicare is divided into four parts, namely: Medicare part A, B, C and D. The Medicare part A covers the inpatient cost of the hospital and skilled nursing facilities; Medicare part B focuses on outpatient
Comparing Medicare And Long-Term Care
553 Words | 3 PagesMedicare Kelsey Reinholt SOC 400 10/22/2015 Les Lazarevic ABSTRACT The focus of this paper is to provide knowledge over the Medicare and its requirements. This paper explains some challenges that might occur with the choices on Traditional Medicare, with Medicare+Choice, there is usually an incentive financially or at least an encouragement for a transfer to the private sector for little to no cost. Medicare and Medicaid, two publicly funded health programs, both cover populations in need of long-term care, but they are poorly coordinated.
Canadian Pension
610 Words | 3 PagesA country’s social security system is very important, as it directly relates to the happiness and wellbeing of its citizens. During this time period, Canada’s social security system advanced greatly, specifically with the Canadian Pension Plan and the Medical Care Act. Although an Old Age Pension Act was already introduced in 1927, this program only provided benefits for seniors who had an annual income that was less than $350. With the economic improvement following World War 2, seniors faced the problem of inflation because their pensions were tied to minimum income levels rather than the cost of living. In 1951, Louis St. Laurent fixed this issue by introducing the Old Age Security Act and Old Age Assistance Act, the first pensions that
Medicare In Health Care
602 Words | 3 PagesOne of the most popular health plans that people use is Medicare. One of the reasons why this is so is because it is public and goes towards making health coverage more possible. One payment plan states that people pay $104.90 monthly, with a $147 dollar deductible. Another payment plan under Medicare states that one has to pay $407 dollars monthly at the most. ("Medicare", 2015).
Argumentative Essay: The Future Of Social Security
1420 Words | 6 PagesThis issue has been known for some time. Numerous plans of reform have been proposed but have failed to address the issues enough to create a working solution. Social Security 's shortfall is so big that small changes don 't cut it. “Some say, for example, that we should raise payroll taxes just enough to make the system solvent, but this would have a major impact on average workers ' household budgets and would cost hundreds of thousands of jobs, slow the economy, and take a bite out of household savings. Even worse, because of the way the Trust Fund works, higher taxes probably wouldn 't fix the problem and wouldn 't take future tax hikes off the table.”
Healthcare And Medicare Comparison Essay
557 Words | 3 PagesMedicare pays for hospital and medical care for elderly and certain disabled American 's. This insurance consists of two main parts for hospital and medical insurance. Then there are two additional parts that provide flexibility and prescription
Medicare In Healthcare
120 Words | 1 PagesMedicare was initially formed as a health insurance program to provide aid in medical expenses for the elderly. President Lyndon B. Johnson influenced the path of these Medicare and Medicaid programs during his term as president in 1965. During the time that Ronald Reagan was president, new Medicare cost control approaches for health care providers emerged, which aided determining reasonable charges for the services provided and payment options. Medicare and Medicaid were the establishment of a mainstream model of federal medical assistance to people who are unable to secure it for themselves. Over time, many different policies have been endorsed to provide access to health care for specific groups who may be unable to pay for their own medical
The Negative Impact Of Medicare On The Healthcare System
278 Words | 2 Pages”(Michael Lewis) Furthermore, “Medicare is the largest health insurance in the world.” (Michael Lewis) Which is how; Medicare is played a big part in the GDP. This helps the elderly to keep more of their money for other things
Clinical Integration In Healthcare Essay
436 Words | 2 PagesThe nature of United States health care system is undergoing lot of changes. The steady increase in the cost of healthcare is one of the biggest concerns in the healthcare system that is affecting all clinical setting across the board. As a clinician who works mostly within the parameters of Medicare and Medicaid guidelines for reimbursement, healthcare providers are getting more and more challenged with struggles of providing optimum care with increased responsibility for cost and quality control to survive financially in new market pressures. Public fund deficits in conjunction with aging population in this country demands better utilization of care in a cost effective way in future.
Government Entitlement Spending
354 Words | 2 PagesThe percentage of government money paid in entitlements is growing over time, while the percentage of government money paid in investments is shrinking (Taylor, 2012). Entitlement spending is rising from about 12% in 1962 to a projected expenditure of about 58% in 2022. During this same period, investment spending is falling from about 31% in 1962 to about 10% in 2022. Major entitlements include Social Security, Medicare, Medicaid, unemployment, and nutrition assistance (aka SNAP). Investments include infrastructure, research and development, education and training.
More about Medicare Solvency: Financial Analysis
The Pros And Cons Of Central States Pension Cuts
840 Words | 4 PagesLong-Term Care: A Case Study
575 Words | 3 PagesFinancial Reporting And Analysis: Harnischfeger Case
1163 Words | 5 PagesMedicare Pros And Cons
576 Words | 3 PagesLong Term Impact Of The Social Security Act Of 1935
746 Words | 3 PagesMedicare Part-A Case Study
390 Words | 2 PagesComparing Medicare And Long-Term Care
553 Words | 3 PagesCanadian Pension
610 Words | 3 PagesMedicare In Health Care
602 Words | 3 PagesArgumentative Essay: The Future Of Social Security
1420 Words | 6 PagesHealthcare And Medicare Comparison Essay
557 Words | 3 PagesMedicare In Healthcare
120 Words | 1 PagesThe Negative Impact Of Medicare On The Healthcare System
278 Words | 2 PagesClinical Integration In Healthcare Essay
436 Words | 2 PagesGovernment Entitlement Spending
354 Words | 2 Pages