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Commentary

Financial Cure Overdue: America’s ailing Medicare, Social Security Programs
The Atlanta Journal–Constitution, 4-26-07

The editors at the Journal-Constitution ask when Congress will get serious about reforming Medicare and Social Security. Their answer: Don't hold your breath.

Only one page is important in this year's depressingly familiar report on Medicare's approaching financial crisis. It's the one with a graph showing the fund that pays hospital bills plunging toward zero in 2019.

That's a pretty convincing argument that time is running short to salvage the health insurance program for the elderly and disabled.

Not that Congress is likely to do anything about Medicare's financial problems or the less critical but still severe issue of Social Security, which is expected to run out of money in 2041. That's because there are no politically palatable choices. The most obvious fixes—changing benefits and/or raising taxes—are bound to be unpopular. Reducing the huge and wasteful administrative cost of health care will be challenging as well.

But the choice of doing nothing will soon be no choice at all.

In their annual report this week, system trustees pointed out again that Medicare payroll taxes can't keep up with the cost of care at hospitals and other in–patient facilities. Blame rising health care prices and the pending retirement of 78 million baby boomers.

Medicare's other trust fund, which provides supplemental insurance to cover doctors' bills, outpatient care and prescription drugs, is in better shape. That's because retiree premiums are increased as program costs rise.

Still, the overall Medicare program relies increasingly on massive injections of money from all taxpayers, retired or not. System trustees predicted that Medicare's dependence on general revenue will exceed 45 percent in 2013. Their warning, which follows a similar one last year, triggers a requirement that the president propose—and Congress consider—a means to reduce that reliance.

But early political bickering suggests that Congress will find it difficult to agree even on a stop–gap solution to that impending problem.



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