Medicare, Medicaid Financially Doomed

Friday, September 04, 2009 by: David Gutierrez, staff writer
Tags: Medicare, health news, Natural News

(NaturalNews) The economic crisis has pushed forward the looming day of bankruptcy for the Medicare and Medicaid health care programs, according to a report issued by the program's trustees.

Social Security is in a similarly critical position, the report said.

For a number of years, the report reveals, Medicare has been spending more in payments than it has been pulling in from tax revenue or interest on its investments. In last year's report, trustees predicted that the funds in the Medicare hospital trust would be expended by the year 2019; this year's report revises that estimate to 2017. The program owes $13.4 trillion more in benefits than it can afford, a full $1 trillion more than last year.

When all Medicare programs are added together, the total unfunded obligation is a whopping $37.8 trillion, or 2.7 times the size of the nation's estimated 2009 GDP, roughly $13.8 trillion.

Social Security trust funds are now predicted to hit zero in 2037, in contrast with last year's estimate of 2041. By 2016, the program will be spending more on benefits payments that it receives from tax revenue. In 2037, its tax revenue will only be enough to fund roughly 75 percent of its benefits payment obligations.

The health and retirement programs have been hit hard by a reduction in tax revenue caused by soaring unemployment. A total of 5.7 million jobs have been lost since December 2007, a major hit to programs that depend on payroll taxes.

As a measure of how hard the recession has hit payroll taxes, Social Security's tax income surplus for next year is estimated to be $3 billion, an astonishing $83 billion less than Congress predicted only a year ago.

The 2007 Social Security surplus was $72 billion, which was borrowed and spent by other federal government programs.

Sources for this story include: washingtontimes.com.