TUCSON, Ariz., Sept. 2, 2015 (GLOBE NEWSWIRE) -- In 265 pages of complex tables, graphs, and actuarial technospeak with liberal use of euphemisms like "financially challenged," the Medicare Board of Trustees 2015 Annual Report uses the word "insolvency" exactly once, reports neurologist Lawrence R, Huntoon, M.D., Ph.D., in the fall issue of the Journal of American Physicians and Surgeons.
"Perhaps in recognition of the fact that all Ponzi schemes eventually fail, the authors of the Report acknowledge that a major crisis is coming," Huntoon states. The "solutions" proposed in the Report, however, basically focus on how to keep the Ponzi scheme going a bit longer. "There is, of course, no way to 'manage' a wealth transfer Ponzi scheme to make it financially sustainable."
The Hospital Insurance (HI, Part A Medicare) fund is heading for depletion in the near future, the Trustees acknowledge. But already in 2014, total expenditures were $613.3 billion with total revenue of $599.3 billion, including $11.2 billion in interest income. In fact, Part A expenditures have exceeded income every year since 2008. The deficit is made up, Huntoon explains, by using current tax revenues to redeem special, nonmarketable bonds.
The Medicare Board of Trustees has set minimum standards expressed as short-term financial adequacy and long-term actuarial balance, Huntoon writes. Neither short-term nor long-term goals have been met for more than a decade.
What happens when the Trust Fund is depleted? Trustees acknowledge that "[i]f assets were depleted, Medicare could pay health plans and providers of Part A services only to the extent allowed by ongoing tax revenues—and these revenues would be inadequate to fully cover costs. Beneficiary access to health care services would rapidly be curtailed."
The Report, Huntoon states, places its faith in the concept of "too big and politically important to fail." Trustees state: "To date, Congress has never allowed the HI trust fund to become depleted." But Huntoon says that this expresses "a delusional belief that Congress can vote to defy basic laws of economics."
The Trustees propose enacting reforms sooner rather than later, to allow more time for "affected individuals and organizations—including health care providers, beneficiaries, and taxpayers—to adjust their expectations and behavior."
Huntoon predicts "inadequate payment for those who provide care to Medicare beneficiaries, huge increases in taxation and premiums, especially for those whom the government labels 'wealthy,' and deteriorating access to care…for Medicare beneficiaries."
"Expectations of both young and old will indeed have to be adjusted—ever downward," he concludes.
The Journal of American Physicians and Surgeons is published by the Association of American Physicians and Surgeons (AAPS), a national organization representing physicians in all specialties since 1943.