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Election Season continues apace, so it is no surprise that we are hearing all the usual scare-tactics about Medicare – but before you take them at face value, please read this piece from Modern Healthcare: "Predicting Medicare Spending is Hard, Especially If It's In the Future."

Modern Healthcare editor Merril Goozner debunks 2016 presidential debate-host Chris Wallace's claim that Medicare "is going to run out of money in the 2020's" resulting in "huge cuts in… benefits."  "Not true," says Goozner, and we agree.

First, funding for Medicare Part B and Medicare Part D comes from beneficiary premiums and the government's "General Fund" –  they are a federal budget item, just like (to use Goozner's example) the Defense Department. Whether to, and how much to, fund these items is a purely political decision.

As to the Medicare Part A Trust Fund, which is usually the source of all the claims of wrack and ruin? Well, those claims are not entirely accurate, either. According to The article,

Assuming nothing changes between now and then and their projections are accurate—a questionable assumption I will get to below—the tax will generate enough revenue in 2028 to pay fully 87% of Medicare's hospital bills. Congress at that point will have three choices. It could use income taxes to support hospitals like it does the rest of the program; it could raise the payroll tax to about 2.2% to cover the shortfall; or it could means-test the program, cut benefits or use a combination of the two to close the gap. That's hardly a “huge cut” in benefits.

But Goozner doesn't just stop there. He goes on to question the assumptions used to make these predictions at all, saying that the experts behind them have consistently missed significant economic events that affect such spending, and have thus consistently mis-predicted healthcare spending. There is no need for rash action that might compromise the effectiveness our decades-strong Traditional Medicare program.

Read the full article at: http://www.modernhealthcare.com/article/20161022/MAGAZINE/310229985 

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