Medicare- Unfunded Liabilities Exacerbated by the Addition of Part D

What is about to be written here is very, very difficult to get our minds around as Americans.  The dollar figures mentioned here are estimates and are almost impossible to get a precise read on.  The most reliable source for information is the Trustee Reports that are released annually and are a matter of public record at the Health & Human Services Website ...I whole heartedly recommend this site and its associated documents as a sure cure for insomnia and perhaps it could also double as a torture chamber in some sense.

Having said that, the estimates are as follows.  Previous to Part D (the incredible, fiscally irresponsible prescription drug act called the Medicare Moderinzation Act of 2003) the underfunded liabilities of the U.S. Government with respect to promises made under Medicare stood at a staggering $18-20 trillion dollars.  That is approximately $5 Trillion dollars more than the entire national debt which stands at $14.1 Trillion today, February 28, 2011.  Again, the long-term underfunded (or non-funded) liabilities of the taxpayer with respect to the Medicare program back in 2003 were already some very worrysome percentage more than the entire February, 2011 dollar amount owed by the country for every borrowed dollar the country still owes since the days of George Washington (1789-present)...Stop and just think about that for a few moments.  Get your brain around that one and try not to reach for the Prozac or the Arsenic.

Then, as if matters were not already difficult enough concerning this juggernaut of an entitlement program, consider that the underfunded liabilities of this program increased a whopping $8.1 Trillion or over (40%) in the stroke of a pen when congress passed and President Bush signed the bill referenced above adding Part D or prescription drug coverage to the mix.  This was the most aggregious, expansion of entitlement benefits in at least a generation to that date with no close rival since LBJ signed Medicare into law in 1965 as part of his "Great Society"...And what a wonderful society this is creating as we continue to suck prosperity out of future generations at the most alarming pace in our nation's history.

In the most recent "Trustees Report" (August, 2010), it is difficult (a huge understatement) to put a finger on the most current measure of the underfunded liability.  In fact, the trustees and the actuaries disagree with a variance of only $12.3 Trillion dollars (an amount roughly equal to or at least the vast majority of the entire National Debt on today's date as noted above).  Can you imagine what the overall unfunded liability of Medicare is today give or take the variance of nearly the entire National Debt figure?  It is too astounding to event put into print...I won't be responsible for any suicides!!!

Was Medicare Part-D as fiscally irresponsible as anything that has ever been contemplated by the Federal Government (you know, the one "of the people, by the people and for the people") as we like to hallucinate.

Reform is essential, mandatory, critical and incredibly urgent.  Will you raise your voice with me to assist before we lose complete control of our finances at the national level???

OUR DEBT- THE MOST SIGNIFICANT NATIONAL SECURITY THREAT WE FACE

As the Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, has noted, the most significant threat to our national security is our debt. http://ow.ly/4360W

DAVID WALKER (USCG)- 2001 OUTLOOK

In 2001, previous to 9/11, with expected budget surpluses, David M. Walker still warns about the long-term structural deficits created by the major entitlement programs (Social Security, Medicare and Medicaid) driven largely by the increase in cost of medical care.

"Rising health care costs - The resurgence of health care costs due to a variety of factors will put increasing pressures on governments, employers and individuals in the years ahead. We have a huge imbalance between what people want, versus what they need versus what we can afford in this critically important area. Stated differently, there is a huge imbalance between what has been promised and the resources that are likely to be available in this area, especially in connection with Medicare." (David M. Walker- U.S. Comptroller General, "Government Challenges in the 21st Century", National Press Club, April 23, 2001)

Said even more succinctly, "Given these long-range fiscal challenges, we must be prudent about how to handle the current surplus while getting on with entitlement reform if we want to avoid a train wreck down the road." (David M. Walker- U.S. Comptroller General, "Government Challenges in the 21st Century", National Press Club, April 23, 2001)

It is impossible to overstate the fiscal damage that has been done by various factors, circumstances and events since these statements were made in an era of relative peace and prosperity.  Wars in Afghanistan and Iraq and the most fiscally irresponsible piece of legislation passed since LBJ signed the establishment of Medicare in 1965 (the 2003 establishment of the Medicare, Part-D, Prescription Drug Benefit) was signed into law by President George W. Bush increasing the underfunded liabilites of the Medicare system by over 40% over the next 75 years- all with just one stroke of the pen.  There have been financial sector melt-downs, bailouts and a deep lasting recession since 2008.  All of these factors have left the fiscal state of the Nation in the most critical of condition.

The urgency with which we must take meaningful and aggressive action to get our arms back around our debt and deficit by reform of the entitlement programs cannot be overstated.  For additional education on the current state of affairs, please watch the following clips and comment- your voice counts!!!

I.O.U.S.A. Solutions

WISCONSIN LABOR UNREST

WISCONSIN LABOR UNREST

Sadly, the Wisconsin Labor unrest has less to do with unions and more to do with the critical state of financial affairs there at the local and state level.  Thank goodness that Senator Dan Liljenquist (Utah Senate) has led the way with Pension and now Medicaid reform to ensure that Utah does not face the same unreset and tension.  We are only seeing the beginning of the civil pain that we will face if reform is not undertaken at all levels of government to bring about the much needed FISCAL REFORM.

Welcome

Welcome to CITIZENS FOR FISCAL REFORM! 

Tune in often and invite your friends to vist us for updates and resouces concerning the entitlement reform that is so critically needed at all levels of government.  We will keep you informed and the message focused regarding what the best and brightest have to say about getting the American fiscal house in order!!!

For a brief and informative overview of the crisis, please visit the Peter G. Peterson Foundation's "I.O.U.S.A. Solutions" link for a well done, non-partisan documentary detailing the Nation's fiscal woes and many proposed solutions from both sides of the isle...

PGPF I.O.U.S.A. SOLUTIONS

What do you think?

Stay tuned.  Our discussion will provide, categorize and expound upon the "entitlements" including Social
Security, Medicare and Medicaid- which are literally bankrupting the Nation!!!