The federal government is on the verge of breaking one of its oldest promises to its citizens health care for the elderly U.S. Secretary of Health and Human Services Michael Leavitt told a conference of seniors during a Wednesday visit to Salt Lake.
Shoring up Medicare is the single most important and possibly the ugliest political issue the country will face, but it must face it now, the former Utah governor told the home state crowd gathered at the Little America Hotel for the 21st Annual Utah Conference for Seniors hosted by Sen. Orrin Hatch and his wife, Elaine.
If something isn't done to seriously address how things are today and recognize that the premise of Medicare no longer holds true, the Medicare trust fund could well become insolvent by 2019. Four or five years later, he said, Medicare could come apart from the inertia of economic and demographic forces the plan's designers couldn't have imagined.
It's a combination of things, from the global economy to the mounting obligations to seniors, he said. Generations of younger workers who were counted on to underwrite Medicare are dramatically declining, just as the largest group of Americans in history reach the age when they're likely to use more medical care than they did in the previous 64 years combined.
Another factor is the burgeoning cost of health care, which is estimated by Leavitt's advisors to account for 41 percent of the typical family budget by 2030. In 25 years, the 13 percent of the federal budget now earmarked for health care services will be more like 23 percent, he said.
"What we see coming is whitewater and treacherous whirlpools," Leavitt said, likening the course of Medicare in the near future to a river with rapids tough enough to challenge the most expert river runners.
He was quick to note the problems can be solved if the various stakeholders including Congress, the current and next administration, public and private sector employers, and the seniors themselves get a sense of what's ahead "and get in and start paddling around danger spots."
Leavitt was short on specific measures that could be used to reorient Medicare. The fist step, however, is coming to grips with the fact that the plan will have twice the cost and half the people underwriting, he said.
It will take more positive approaches, similar to the significant cost savings and improved quality achieved through the recently implemented Part D Medicare plan.
"When seniors began to shop, they selected options that created competition and have driven down costs by 40 percent," he said.
Young families struggling to make ends meets today will no doubt argue that the Medicare deal wasn't struck by their generation, he said. Seniors will argue that they paid into the system and expect to have the promise kept.
"I can't stress enough that virtually nothing is how it used to be," Leavitt said, adding that imported goods to the United States will top $2 trillion this year, "a figure inconceivable just 10 years ago."
Like it or not, change is coming."We can fight it and fail, we can accept it and survive or we can lead it and prosper," he said.
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