Next Stop, Medicare Wreck

A very good article in the Dec. 20 Los Angeles Times is a stark reminder of the ballooning Medicare funding crisis, a disaster-in-waiting recently obscured by all the political jockeying over Social Security. As reporter Ricardo Alonso-Zaldivar points out, the same aging demographics that threaten Social Security are poised to wreak mischief with Medicare, which is expected to deplete its trust fund by 2019, more than 20 years before Social Security's projected bankruptcy.

Oh, and in case anyone is keeping score, both political parties share culpability for ignoring this impending train wreck, especially since the Bush prescription drug benefit -- an election-year effort by the White House to out-Democrat Democrats -- tacked more than $8 trillion on to the Medicare budget hole. Some Republicans balked initially, but eventually fell in line. After all, the White House was sure, and rightly so, that the drug benefit would take some of the wind from the sails of Democratic pander boats.

Excerpted from the Times story:

"The hospital trust fund, the biggest part of Medicare, may also be the hardest to deal with. The fund, which is fed by a payroll tax of 2.9 percent split evenly by employees and employers, is on course to exhausting its surplus in 2019, according to Medicare's trustees.The trustees say the funding gap could be eliminated by more than doubling the payroll tax to 6.02 percent. But a substantial tax hike on workers, millions of whom can't afford health insurance for themselves, could spark a political backlash.

"Another option is to cut hospitalization benefits by about half. AARP policy director John Rother said the public would rather give back Bush's lower tax rates than accept Medicare cuts of that magnitude. 'The American people value their healthcare very highly, and they will pay for that,' said Rother, whose 35-million-member organization lobbies on behalf of Americans 50 and older.

"'Those are some mind-blowing alternatives,' [Paul] Fronstin [of the Employee Benefit Research Institute in Washington] said. 'It is hard for me to imagine what this program will look like down the road.'"

Social Security remains the Big Hot Potato in D.C. because Dubya at least has offered a revolutionary plan to confront the mess (more on that from this blog in the upcoming weeks). But it is vital that we not let Medicare continue to suffer from neglect like a nursing home resident collecting bedsores in a never-visited back room.