HCM 500 CT 2

doc

School

Colorado State University, Global Campus *

*We aren’t endorsed by this school

Course

500

Subject

Finance

Date

Jan 9, 2024

Type

doc

Pages

Uploaded by jncook25

MEDICARE SOLVENCY Medicare Solvency Jessica Cook Colorado State University Global HCM 500: The U.S. Healthcare System Dr. Jennifer Davis July 30, 2023 1

MEDICARE SOLVENCY 2 Medicare Solvency The United States offers medical insurance coverage to residents that are aged 65 years and older, or those that have been diagnosed with certain disabilities. The insurance helps pay for several healthcare costs such as doctor visits, medication, hospital stays, and home health. Though funding for the insurance will need to be added to the accounts each year. The research will review what the Medicare Trust Fund is, while investigating where the accounts stand in the current state. In addition, reviewing what future challenges may present that affect the Medicare Trust Fund. Medicare Trust Fund Medicare provides insurance coverage to nearly 65 million residents in the United States who meets its requirements. The trust provides two aids in two separate funds which are known as hospital insurance, also known as Part A, which provides coverage for hospital stays and skilled nursing, hospice services, and a limited number of services in home health ( Status of the Medicate Trust Funds, 2022). The second fund called supplemental medical insurance, also known as Part B and Part D, which gives coverage for doctor visits, medications, limited number of home health, and outpatient services ( Status of the Medicare Trust Funds, 2022). The is also one more area of coverage for qualified residents, called Part C, which also gains funding from both the hospital insurance and supplemental insurance funds. Funding comes from employer payroll taxes that both employer and employee pay towards under Part A. For the supplemental fund are bsased on revenue from general taxation and premiums that the members will pay. Current State of the Fund Each year the funds are evaluated to compare the amount of spending to how much funds in being placed into the two separate funds. If spending surpasses the amount of funds available,

MEDICARE SOLVENCY 3 then Medicare will begin to deplete the necessary funds to provides services (Cubanski & Neuman, 2022). Projections for the current year of 2023 estimate around 172 billion dollars in available funds, however the amount of spending for this year is projected to be around 3 billion dollars. Leaving the remaining year end funds to be estimated around 169 billion dollars (Cubanski & Neuman, 2022). Still appears that there is a large amount of funding still available for recipients to utilize. In the 1990’s Congress stepped in and established ways to decrease Medicare spending to prevent the funds from depleting. With the prediction of spending the Board of Medical Trustees did find that the year 2022 did perform slightly better than planned to push back further decreased predictions ( Status of the Medicare Trust Funds, 2022). Future Challenges Previously, it was mentioned that the spending from 2023 would still leave enough funds available for use, however it is predicted to only last for an estimated amount of time. While the 2022 spending year performed slightly better than predicted, the Medicare Trust Funds are predicted to deplete by the year 2028 ( Status of the Medicare Trust Funds, 2022). Patterns show that spending is increasing fast each year and contributions aren’t filling the funds as fast. One major cause for the increased spending is the baby boomer generation is approaching the age of eligibility, as well as an increase in health care costs ( Status of the Medicare Trust Funds, 2022). One key factor about the depletion, however, is that funds will empty from the hospital insurance primarily. The supplemental insurance will not experience this drastic measure as the funds will be replenished by the U.S. Treasury. Another great impact to the funding is Senators proposing that Medicare be given to all U.S. residents, causing a drastic increase to increase which will lead to faster depletion ( Status of the Medicare Trust Funds, 2022).

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

MEDICARE SOLVENCY 4 There is more than legislation affecting the spending levels but there are a few other factors that will affect the future of Medicare Trust Funds either in a positive or negative way. A growing economy will increase revenue that is collected from payroll taxes. A growing economy led to an increase in employment numbers, though a decline in the economy could cause a decrease in revenue from payroll taxes (Cubanski & Neuman, 2023). Healthcare is constantly advancing, with advancements comes an increase in health care costs, and then leads to an increase in spending. Previously mentioned above that the baby boomer generation is about to reach eligibility age for Medicare, which increases spending, though the one loss is the decline in payroll taxes to fund Medicare Part A (Cubanski & Neuman, 2023). Conclusion There is a lot to consider when understanding the funding aspect of the Medicare Trust Fund. Now with the baby boomers entering the age for Medicare, it is time for the government to evaluate the spending limits. If the funds are depleted, the question remains on how to rebuild such a vast amount of funding to assure residents have the medical coverage. Some areas that are being considered are rebates for medication, that will lead to lower prices (Cubanski & Neuman, 2023). While there are ongoing talks about increasing spending to improve care, yet further considerations that will need to be discussed to increase revenue into the account. While the funds have an estimated five years before it reaches insolvency, this is a projection and there is still time to alter the estimates and improve solvency.

MEDICARE SOLVENCY 5 References Cubanski, J., & Neuman, T. (2022, June 17). FAQs on Medicare financing and trust fund solvency . KFF. https://www.kff.org/medicare/issue-brief/faqs-on-medicare-financing- and-trust-fund-solvency/ Cubanski, J., & Neuman, T. (2023, January 19). What to Know about Medicare Spending and Financing . KFF. https://www.kff.org/medicare/issue-brief/what-to-know-about- medicare-spending-and-financing/ Status of the Medicare trust funds . (n.d.). https://www.rpc.senate.gov/policy-papers/status-of-the- medicare-trust-funds#:~:text=The%20Medicare%20trustees%20estimate%20that%20the %20Part%20A,the%20program%E2%80%99s%20ability%20to%20provide %20beneficiaries%E2%80%99%20health%20benefits.