Who is ending Medicare as we know it

Do you really need to know?

Anyone with an at least two digit IQ knows the three big entitlements (Social Security, Medicare and Medicaid) are already bankrupt and in the process of bankrupting our country. But this House hearing was really interesting.

Rep. Roskam: Thank you, Mr. Chairman. Your report shows that Medicare will now be bankrupt in 2024. Americans would then be forced to either endure a massive tax hike or "an immediate 17-percent reduction in expenditures." In other words an immediate 17-percent Medicare cut. Can you explain what you mean by immediate?

Dr. Blahous: Well the way that the trust funds work, both on the Social Security side and on the Medicare HI side, is that the amount of expenditures the program can put out there is limited by what's in the trust funds. Now on the SMI side that's not really an issue because we just give the trust fund each year whatever is required to keep pace with costs. But once that trust fund runs out, the program lacks the authority to make benefit payments.>/u>...

Roskam: And that immediate is the common understanding of immediate, in other words, this present moment in time. In other words, when insolvency happens, then you immediately are prohibited based on the law and based on your understanding as a trustee from paying anything further out. And your estimation is that it would be a 17-percent benefit cut. Is that right?


Dr. Blahous: Well its 17 percent on average over 75 years, now it varies according to year. I think in 2024 specifically it's about 10 percent and that increases, then it becomes 25 percent by the 2040s.

Dr. Reischauer: What I think my colleague was describing is when the trust fund became insolvent, money would still be flowing in from tax receipts and Medicare would delay paying bills, and so a hospital would send this bill in and rather than being paid in 24 days, it might have to wait five months. The CMS and intermediaries and other payers would be writing out the checks and transferring the resources to the hospital, hospice, whatever, on a much delayed basis.

Roskam: So that cut just so I'm clear, is not a hypothetical cut, it's not a hypothetical delay, it's an actual delay in payment to the point of reaching this 17-percent number based on your own projection. Is that right?

Dr. Blahous: That's right. The Social Security Act which deals with these trust fund issues is very explicit that payments can only be made from the trust funds.

Roskam: So there's no other flexibility. If the revenues aren't there, if an insolvency is declared, you have no other remedy but to move forward and make those cuts. Is that right?

Dr. Blahous: Right. The programs don't have the authority to borrow in excess of the resources provided by the trust funds.

Roskam: And absent some change in the program your prediction is that is where our nation will be in 2024. That's right?

Dr. Blahous: That's right.

Dr. Reischauer: With respect to the hospital insurance system.

Roskam: I understand. So when the gentleman from Wisconsin said that there's a proposal that's out there by the Majority on this Committee that ends Medicare. In fact, Medicare as we know it will end in 2024, absent some change in policy or some change in moving forward. That's right isn't it?

Dr. Blahous: Yes.

Gee I wonder where AARP is? Rhetorical question, I know.

In other words the system is heading to bankruptcy (actually it already is) and will simply collapse in 13 years. And where are the Democrats with their ideas to fix the problems?

Their silence is deafening. No surprise there.

Let's pray the end the Obama Reign of Error comes soon...we need adults to handle these problems. God knows those idiots like Schumer, Reid, Barney Frank et all will not.

UPDATE: Remember the fact the Obama regieme hasn't proposed a budget yet for FY 12. This is a classic...from the CBO head.

HBC Chairman Paul Ryan: “We got your re-analysis of the President’s budget. I won’t go back into that. But the President gave a speech on April 13th where he outlined a new budget framework that claims $4 trillion in deficit reduction over 12 years. Have you estimated the budget impact of this framework?”

CBO Director Doug Elmendorf: “No, Mr. Chairman. We don’t estimate speeches. We need much more specificity than was provided in that speech for us to do our analysis.”

Is is 2012 yet?