Medicare and Medicaid

The federally funded Medicare program guarantees healthcare for all Americans age 65 and up.  Its federally funded counterpart, Medicaid, provides healthcare for qualifying Americans who are economically disadvantaged.  Undoubtedly, both programs play an essential role in the lives of tens of millions of Americans by providing healthcare for many individuals who otherwise would be unable to afford it.  The problems within these programs are not related to their undeniably noble mission, but rather in how the unsustainable structure of Medicare and Medicaid is threatening the economic stability of the federal government.  Due to the rising cost of healthcare, each year these programs are consuming a larger portion of the federal budget and diverting more and more money away from all other federally funded programs.

Largely, it is how healthcare is delivered within the Medicare and Medicaid programs that are driving the exponential rise in cost. Both a reassessment of Medicare and Medicaid’s structure of delivery, its funding, as well as an understanding that more care is not necessarily better care is greatly needed.  If not, by 2019 the Medicare Hospital Trust Fund will be insolvent.  Just as importantly, Medicare and Medicaid reform is necessary before these programs economically shake the federal government as well as those who fund it – taxpayers like you.

• Federal spending on Medicare has increased from $8 billion in 1970, to an expected $479 billion in 2008, an increase of over 5800%.⁵
• Medicaid spending has increased from $5 billion in 1970, to an expected $362 billion in 2008.  By 2015, Medicaid spending is expected to increase to $625 billion a year.⁶
• Although ¼ of the increase in Medicare and Medicaid spending can be attributed to the aging of America’s population, the other ¾ is simply a result of healthcare’s soaring cost. ⁷