Today marks 47th anniversary of the passage of Medicare and Medicaid, but unless serious reforms such as those found in Paul Ryan’s budget are put into place, today’s youth may never live to see a dime.
At the current rate, the Congressional Budget Office projects that Medicare could account for close to 10 percent of the nation’s total GDP within the next 30 years, which means the program stands the brink of “blowing up” unless reforms happen, according to Ryan Ellis, tax policy director with Americans for Tax Reform.
“If you let it go on its current trajectory, it collapses under its own weight,” former CBO Director Douglas Holtz-Eakin told Red Alert Politics. “It’s just not sustainable under its current course.”
And Obamacare is likely to make matters even worse because CBO projects that some $740 billion will be diverted from Medicare to pay for the new health care law in the next decade alone.
Medicare’s ballooning growth will have a direct impact on Social Security benefits because a CBO long-term study found that an increasing percentage of Social Security deductions will be needed to fund Medicare, according to Ellis.
“Right now Medicare is growing at 8 to 9 percent a year, and there is nothing to restrain that growth,” Ellis said. “A greater and greater percentage [of Social Security benefits] will be siphoned for Medicare.”
The Ryan budget would transform Medicare benefits by means testing them, adjusting them for the cost of living and adjust payments according to a person’s level of health are necessary to keep it from busting the federal budget. The Ryan budget would leave the system unchanged for those over the age of 55 and change the program for younger workers to prolong Medicare’s lifespan.
“People now in their 20s would get a lump sum in a voucher when they retire 40 years from now,” Ellis said.
And Medicaid’s prognosis is even worse because it already is insolvent, and states are terrified by Obamacare’s looming expansion of the program – the costs of which they will bear.
Medicaid is the biggest part of every state’s budget, and Holtz-Eakin anticipates that Obamacare will increase the costs to the states by 10 percent plus administrative costs.
“It will just make the burden a lot bigger,” Holtz-Eakin said.
Ellis warns that Medicaid could bankrupt the states unless solutions such as Paul Ryan’s proposal of block granting money to the states and allowing them to tailor their programs for their individual needs are put into place.