Estimated

Medicare Expenditures

By 2028

1.2 Trillion per Year!

The Facts on Medicare Spending and Financing

• Medicare spending was 15 percent of total federal spending in 2017, and is projected to rise to 18 percent by 2028.

• Based on the latest projections in the 2018 Medicare Trustees report, the Medicare Hospital Insurance (Part A) trust fund is projected to be depleted in 2026, three years earlier than the 2017 projection.

• In 2017, Medicare benefit payments totaled $702 billion, up from $425 billion in 2007.

• As a share of total Medicare benefit spending, payments to Medicare Advantage plans for Part A and Part B benefits nearly doubled between 2007 and 2017, from 18 percent ($78 billion) to 30 percent ($210 billion), as enrollment in Medicare Advantage plans increased over these years.

• Average annual growth in Medicare per capita spending was 1.5 percent between 2010 and 2017, down from 7.3 percent between 2000 and 2010, due in part to the Affordable Care Act’s reductions in payments to providers and plans, and to an influx of younger beneficiaries from the baby boom generation aging on to Medicare, who have lower per capita health care costs.

• Medicare per capita spending is projected to grow at an average annual rate of 4.6 percent over the next 10 years, due to growing Medicare enrollment, increased use of services and intensity of care, and rising health care prices.

DYI:  It is conservatively estimated that by 2028 Medicare alone will consume 1.2 trillion dollars per year.  In its current state this is a stand alone program – self funded by payroll taxes similar to Social Security.

 

Medicare brings in around 261 billion dollars per year the shortfall is by redeeming their trust fund.  This redemption does not change the overall deficit when redeemed for payment by the Treasury through incoming revenues.  Of course this soaks up tax revenues forcing additional [unless there is a surplus] borrowings for all of the other programs.  Simply put this is a bit of accounting slight of hand as these trust fund certificates are only IOU’s back up by nothing as the money was long ago spent.

When 2028 arrives only 9 years from now those IOU’s will all be redeemed and the world will see budget deficits just for Medicare alone of 939 billion!  Add on to the insane spending from both parties the world will easily see close to 2 trillion dollar deficits!

If anyone believes the Fed’s can immediately add almost 1 trillion dollars per year along with all of the other non stop spending without interest rates moving up, at an ever accelerating rate – is deluding themselves.  There is zero public talk in Congress, President or the main stream press [to any significant degree] to deal with this looming deficit busting monster.

As this approaches markets will begin to anticipate this calamity, at first very slowly, unless they see any resolution will accelerate closer the day of reckoning arrives.  With stocks and junk bonds trading at nose bleed levels these asset categories could easily fall up to 65% to even possibly 85%!  When Mr. Market will sense this is anyone’s guess as it is not determinable but make no mistake it will happen.

Don’t think this is a problem of biblical proportion?  I’m making a mountain out of a mole hill?  Remember the downturn of 2008 to 2011 was primarily in the housing sector and the assorted banking frauds.  All told around 3% to 5% of our economy principally centered in California and Florida.  That clipped the stock market 50% plus.  Today the entire health sector is a whopping 21%!

Job losses will be in the millions with unemployment soaring to the 20% plus level.  It’s an odds on favorite that the headlining money centered banks will fold up like a cheap tent in a mild breeze along with multiples of scores of publically traded corporations.  Anywhere from 80 to 100 million people will lose everything and when that happens a sizeable number will resort to violence as possibly 25% end up hungry and homeless!

Think the cop on the beat is going to show up to work when his paycheck bounces?  Not a chance.  Governments; Federal, State and especially local, for all intent, will cease to operate to any real degree.

Until the price fixing and monopolies are dealt with; just as was done before during the robber baron age will the Medical Industrial Complex be slain.  No new legislation is needed.  100 year old laws are on the books – Robinson-Patman, Clayton, and the granddaddy Sherman Anti-Trust Acts if applied aggressively will quickly restore competition to this industry dropping prices from 65% to 90%!  Bringing back to its historical share of the economy at 6%!  Unless that happens and soon Caty bar the door America is in for a ride of titanic proportion.

DYI