Medicare – Simply Unsustainable

Posted on December 13, 2007 by Dr. David Edward Marcinko MBA MEd CMP™

Medicare and Medicaid Spending Growth

Staff Writers 

 

Like Michael Palmer’s song, “Irresistible”, it seems that Medicare and Medicaid spending would — if unaddressed — continue to grow faster than the economy over the next 75 years. According to the Congressional Budget Office; it’s also very unsustainable. 

The culprits are physician and hospitals reimbursement methods and new technology and treatments that drive costs.

“The main message of this study is that, without changes in federal law, federal spending on Medicare and Medicaid is on a path that cannot be sustained,” stated the CBO report of November 13th 2007. 

According to the CBO, by 2030, federal Medicare and Medicaid spending will consume about 8% of the gross domestic product, a measure of the total value of goods and services produced.

Of that, 0.8 percentage points would be from the effect of aging.

And, by 2082, federal Medicare and Medicaid spending would eat up 18.5% of the gross domestic product, with the effect of aging representing just 1.7 percentage points. 

What is the answer to this unsustainable [irresistible] dilemma?

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