If one listens closely to all the conservative talkers and a couple of the cowardly Dems we will no doubt believe that Medicare is going bankrupt by 2019….there is even a couple of the doomsayers that say it will be in 2013….this is the argument that they are all using to cut the program or to try and drive that last nail into the coffin…..

This program which has benefited numerous individuals since its inception will become the play toy of politicians in the next year….even Dems are saying that program reform will help save it, and there are the Repubs that want to eliminate it completely in favor of a damn silly idea…HSAs (health saving accounts)….that is a brilliant plan…..

But what and when is Medicare going to go bankrupt?

News accounts sometimes treat Medicare’s bankruptcy as a predetermined fact. Nothing could be further from the truth; the notion of bankruptcy as destiny distracts from Medicare’s capacity to alter its own future.The trustees’ reports always stress that the projected date of insolvency assumes no corrective federal action or policy changes. But history shows that Medicare always has taken action to solidify its finances. In the 1980s, Medicare reformed its payment system for hospital and physicians, slowing down growth in program spending and pushing back the estimated date of trust fund exhaustion. More recently, the 1997 Balanced Budget Act included a series of Medicare reforms that dramatically controlled spending.

There is the stumbling point of all the predictions about the impending bankruptcy of Medicare……it is crap!…..it is the assumption that the government will do NOTHING or that there will be NO new payments into the system by taxpayers….

But regarless of the facts above….no matter who is in the White House…there will be reforms ot Medicare…..an attempt to save it from itself….but what will these reforms look like?

— Raise the payroll tax to bring in more revenue and because that political discussion has been postponed for so long it now becomes problematic. The trustees said Part A “could be brought into actuarial balance over the next 75 years by an immediate 108 percent increase in program income or an immediate 48 percent reduction in program outlays (or some combination of the two).”

— Reduce benefits for Medicare beneficiaries. The problem is that no one who wants a political future wants to go there.

— Cut payments to providers. This option is the one most favored by lawmakers. In Part A it would be the nation’s hospitals. After all, they can and do give the money back in the following year or so.

Those are the “reforms” that I see as the options the Congress will face as an attempt to “save” Medicare.  Next year will be a good year for analysts like me…..this year was a good one with the economic crisis and the health reform debate……will generate a plethora of posts and arguments…..

The prediction of Medicare’s death is seriously exaggerated…..the only reason it comes up at all is because the prediction can be used to gain political clout and show how “inefficient” a government run program can be…..it is all a game…it is all a lie…..