Key Facts about Medicare Spending and Financing
A quick look at projected Medicare spending should tell you that the Part B premium should not have been reduced for 2023. That was pure politics IMO. Medicare costs will continue to rise significantly and the Medicare Part A trust is still headed for insolvency in only five years.
- In 2021, Medicare benefit payments totaled $829 billion, up from $541 billion in 2011. Spending on Part B services (including physician services, outpatient services, and physician-administered drugs) accounts for the largest share of Medicare benefit spending (48% in 2021).
- Payments to Medicare Advantage plans for Part A and Part B benefits nearly tripled as a share of total Medicare spending between 2011 and 2021, from $124 billion to $361 billion, due to steady enrollment growth in Medicare Advantage plans and higher per person spending in Medicare Advantage than in traditional Medicare.
- Medicare spending (net of income from premiums and other offsetting receipts) is projected to rise from 10% of total federal spending in 2021 to 18% in 2032, and from 3.1% to 3.9% of GDP over these years, due to growing Medicare enrollment, increased use of services and intensity of care, and rising health care costs.
- Average annual growth in Medicare per capita spending is projected to be 5.4% between 2020 and 2030, on par with the 5.3% growth rate in private health insurance per capita spending over these years.
- Funding for Medicare, which totaled $888 billion in 2021, comes primarily from general revenues (46%), payroll tax revenues (34%), and premiums paid by beneficiaries (15%).
- The Medicare Hospital Insurance (Part A) trust fund, which pays for inpatient hospital, skilled nursing facility, home health and other Part A services, is projected to be depleted in 2028, based on the latest projections from the Medicare Trustees.
- Source: Kaiser Family Foundation go here for more facts about Medicare
I believe at some point we will have to limit healthcare to just treat the really sick. Why do we need annual exams, they drive up the cost. And there is no real proof that the millions spent, improve health or life span. We treat people during their last few months or years with drugs that cost thousands of dollars for maybe a few more months of life.
I know people that take their kids or themselves to the doctor, every time they have a runny noise. Not realizing it drives up costs. When asked why, they say, I have good insurance and I’m are going to use it.
I have been to the doctor twice in the last 5 years and I have zero out of pocket costs. I do go to the doctor every 5 years and have blood work done.
So far my blood work numbers have not changed in the past 30 years. I did have a colonoscopy at age 60, no polyps, doctor said see you in 10 years. He will not be seeing me, I will use cologuard, saving Medicare hundreds of dollars.
Just imagine what the spending would be if Medicare paid providers at a higher rate. We would be reading of its need for immediate money infusion.
The VAT keeps getting closer no matter how much Warren and Sanders want to bash the rich and make them pay for all social programs. The supporters of massive defense spending need to turn down the volume also.
A VAT is going to dampen economic activity, if we still have an income tax too. People will make the choice not to spend on anything extra because of the VAT. Europeans pay between 17% and 27% VAT depending on country.
Just look at how many people are having trouble with the inflation spike, buying less, canceling major purchases, forgetting about going on vacation.
In the end the government tax receipts will be less than they would of been, without the VAT. Increased payments to the poor who qualify, because of VAT is a bad thing and it will happen. Remember be careful what you wish for. It looks good on paper, but in practice we will all be poorer.