Medicare Supplemental Insurance – The Information One Must Know About

Expenses and financing problems

The expenses connected with Medicare “the Green book” about the House of the Way and committee means doubles each four years during the period between 1966 and 1980. By data to 2004, Medicare expenses made by the American government are $256.8 billion in 2002 financial year. The addressee of the award is strongly subsidized, and net spending under the program, the account of the awards paid on subscribers, has made 230.9 bln. dollars of the USA.

Medicare expenses constantly grow as in absolute expression and in percentage of the federal budget. In total, Medicare expenses have reached $440 billion in 2007 financial year, or 16 % of all federal expenses. Only the big categories of federal expenses are social protection and defense. Taking into account present dynamics of growth expenses, preservation of financing Medicare over the long-term can quite demand considerable changes.

As it was written in the report in 2008 Council of trustees Medicare and People Safety, Medicare will spend more money than it has from taxes this year (2008). Insurance Medicare hospital trust fund becomes insolvent by 2019. Soon after release of the report, main actuary testified that a system inconsistency can be rejected for 18 months if Medicare Advantage plans give more medical services, than traditional Medicare and to pass the economy beneficiary have been paid by the same rates, as a traditional payment for program service. It also has shown that 10-year-old cost advantage of drugs Medicare on 37 % more low, than was originally supposed in 2003 and 17 % lower, than forecasts last year. The New York Times writes in January 2009 that social security and medical “have appeared are almost sacred in the political plan even if they threaten to grow they are so great to be unstable in long-term prospect.”

Expenses on Medicare ate going sharply to increase next decades. Though the same demographic tendencies which influence social insurance and also influence Medicare, there are more important reasons of prospective increase in expenses. Congressional Budget Office (CBO) has specified that:” The further growth of expenses on one beneficiary on Medicare and Medicaid large programs of the federal government in the medico sanitary help will be the most important factors defining long-term tendencies in federal expenses. Changing these programs in order to reduce growth-expenses will be difficult, partly because of complexity of a choice to the politician in the field of public health services finally central long-term t nations plan problem in creation of a federal tax policy “. Besides, ОМС also projects that” A whole federal Medicare and Medicaid expenses will increase from 4 percent from gross national product in 2007 to 12 percent in 2050 and 19 percent in 2082 year.

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