Politics and Medicare

Politics and Medicare are featured in a recent NPR story.

Here are highlights from the NPR story on politics and Medicare:

The challenge for Medicare is not to expand benefits, but to figure out a way to control future cost increases and avoid benefit cuts. Unlike Social Security, Medicare spending is not fully funded by Medicare taxes. True, it does have a trust fund. But this covers only Part A covered expenses for hospitals and nursing homes.

There are big subsidies to help cover expenses for Medicare Part B (doctors, outpatient and durable medical equipment) and Part D (prescription drugs). In calendar year 2015, according to the 2016 annual Medicare trustees’ report, this support totaled nearly $275 billion, or more than 40 percent of all Medicare spending.

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The point here is to emphasize that Medicare is not a self-funded program like Social Security. Arguing for expanded Medicare benefits is fine and dandy. But such arguments should be paired with fiscally responsible funding strategies. To date, many liberal supporters of expanded benefits don’t seem to either understand or acknowledge the heavy financial consequences of expanding the program.

Recognizing these pressures, the Centers for Medicare & Medicaid Services is embarked on a Don Quixote quest to improve the quality of medical care to Medicare beneficiaries while at the same time lowering costs, at least on a per capita basis.

Part D Drug Costs

Trump and Clinton both have promised to deal with this problem. One place to begin would be for Congress to enact a law giving Medicare the legal authority to negotiate prices with drug makers. This power was expressly withheld from Medicare when Congress created Part D drug plans in 2003.

Again, the composition of the next Congress will have a big if not controlling voice in any Medicare changes.

The full story can be read here:  What Clinton and Trump Propose for Social Security and Medicare

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