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The Burden of Medicare: Potential Bankruptcy and Headed Towards a Financial Decline

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When Medicare was established, it was to promote health services for the eligible retirees of the age of 65 and older to help with medical health care. The Medicare bill was signed by Lyndon B. Johnson the President of the United States on July 30th, 1965. The House and the Congress have established this plan on the dates of July 27th and July 28th, of 1965. The policy for this bill has been in effect for almost a hundred years, for which it doesn’t feel like. President Teddy R. Roosevelt first opposed of the plan to incorporate the health care services and combine the policy with the Social Security plan, but of course the Congress denied the proposed plan and shot it down. Later, almost over a decade, President Truman had made almost a similar proposal and transitioned it into a National Health Plan, but Congress, yet again ignored it without a thought. From there on it was then when Dr. Thomas Parran who was associated with the Public Health Services in 1937 strategized the idea to promote it just for retirees. This specific subject of Medicare to help better the people of the United States citizens, has been an ongoing battle to establish a reformed plan of service that can be beneficial to the people. This essay is discussing the hardships of the ongoing issues and the political and financial strains that have been in affect for decades, and if we can stay afloat of the Medicare challenges that our economy faces as of today and in the future.

When you think of Medicare, you probably think government assistance for disability and security for health insurance. You would be correct, but do you ever think of the potential financial issues with government health cost per American and what the effects will be for the future and current generation to come with Medicare? Times are changing, and people are living longer. This is true. So, thinking of the future, it is going to cost the government in outgoing expenses for health care in the next 75 years an estimated amount of $103.2 trillion. When the premiums and the cost of taxes average out it will only be covering only up to $57.4 trillion. Sounds astounding don’t it? This means for the government financial side the trustees say they are still out of money. This is causing a major issue when they don’t even have the funds to help make up the costs that are paying out for the people who use government Medicare assistance.

The government is already in a crisis with government funding as of today and the future. Let’s look at what issues we have as of today. The current government is on a shutdown due to political debate on the cost of the wall to eliminate immigrants from Mexico to not cross-American jurisdiction. When we have issues on our own financial obligations to take care of the health of our people, do you think that the cost of a wall is going to help decrease or eliminate our government spending towards health care? No. We have too much in government spending towards non-sense costs, which is affecting the economy. For the year 1990, the Medicare and Social Security range were 28% for federal spending. The prediction according from the Obama administration, in 2019 it will increase to an astounding amount of 40%. With the expense towards government spending increases to almost double for the year 2019, this will put a burden on the Americans to increase taxes, increase budget deficits, or eliminate or dispose of programs (Samuel, 06/01/2009). With the Federal spending in the year 3016 and 2026, it will rise from $3.9 trillion to $6.4 trillion. With Social Security and other popular health care programs it will make up for about 60 percent of the $2.5 trillion dollar increase on spending, and if some of the programs require for interest included with the cost of the debt then it will make up to that 78.3 percent towards federal aging program.

When the form of the bill took effect in 1965, it was not known of what was to come. In this time the Vietnam War was not really into chaos, and it was still in good times. What came next was known as the “baby boom” era. The government was not predicting that it would have increase in population based on the war status, but it caused issues for the potential outcome of coverage for Medicare on retirees or the disabled. Much of the care for Medicare patients are from the “baby boom” era, and they are living longer than the predicted life expectancy. Around the year 1995, the government was concerned about the baby boom era reaching at the retirement age. The government was in a bind on trying to propose a way to help make sure that the budget for the future was to be in consideration, but there was no way to help change the ways of Medicare Spending. The average life expectancy for individuals was 70.2, but four years ago it has increased to 79.4. The prediction of the average life expectancy is to increase to 80.7 years by the year 2030 comes along. This is showing that the population has taken a greater deal in their health and the life style choices and, making sure they are being treated accordingly. Another thing that has made a huge impact on health of the Americans, is that insurance companies has taken into effect of covering for cost of preventative care and offering medical coverage to create and establish a healthier lifestyle (Moffit, 2016). On the political debate, politicians will make a statement to say that the people will always be protected on the help of government services provided by Medicare. This is not a promise or a guarantee that is set in stone that you will always get this advantage for true coverage.

Medicare Part A services are the basic hospital, and physician service plan. These services are not set aside as trust, but as a funding account to help pay for the hospital and physician services that are provided to the patient. Today, we do not have the funds that the government has promised to the people that we have covered under Medicare today. According to the trustees, the HI fund has never been filled with the obligations that the government promised. So, this tells us that every hard-working American is having taxes taken out to help pay for these fees of the current Medicare holders. By the time the year 2026 comes, it will no longer have the funds to pay back and debts to be owed.

One of the major concerns for the growth and the expansion of funding for financial help with people who carry Medicare, is that the growing population is not striving for workforce labor. This means that the aging population is not working and won’t be paying taxes to support the funding of Medicare. This has now become a congressional issue that politicians and the President of the United States must take control of now and handled obligations that it must face.

Another conflicting situation that is occurring, not only from the decline of workforce in the future on the younger aged American’s being unemployed, is the decline in the birth rate, also known as the fertility rate, population. In the 1930’s, it was at 2.3 and by 1957, we were at a fertility rate of 3.8. This was due to the war and the baby boom era. Now as the time has passed, the change in workforce has shifted to women no longer being stay at home as sole caregivers, women are now working full-time jobs to help support the family. With this increase in women’s role in working, it has decreased the fertility rate significantly starting in the 1960’s. According to economists, the rate for the participants that are currently looking and scavenging for work between the ages of 15 and older has astoundingly dropped to 62.6 percent. The prediction of the rate of work force for this age group is going to drop even more in the next few years due to the baby boomers retiring, women working in the workforce will drop to a level, and students are staying in school for longer extended times. Because of this it has decreased the percentage of workers in the workforce.

There has been debate on making the best of helping patients or people that are currently covered under government assistance through Medicare. There has been a new potential and effective way to help patients get everything they need and benefit the government spending on healthcare. This new way of Medicare is called, Essential Medicare. The goal of this type of Medicare is to combine all of Medicare Part A, B, D and supplemental into one basic plan for beneficiaries that choose to stay in a much simpler and traditional Medicare. With this plan it would help the comprehensive benefits, help to improve the financial protection, and help increase positive incentives to achieve a higher value care, and reduce the cost of sharing for the patients or people that are currently receiving care from higher value care providers. If we could establish such a great proposition with the Medicare Essential option, it would modernize the Medicare’s basic benefit plan and provide an integrated, comprehensive plan to obtain and achieve high value care, and high-performance care systems. Also, another positive benefit of this modernized route of Medicare, it would help to make a better marketplace with private plans. This would cause them to improve the core ways of treatment on their policies and provide better health care delivery and shared physician-patient decision making and helping to gain a better structure on the health care spending costs.

Hopefully, on the bright side of the economy status, we can allow the changes that need to be made necessary for the proper ways to help take care of people with a better and stronger health care delivery system. It’s astounding to know the costs broken down for which piece of the pie in government spending. We need to understand how things work in the health care delivery system, not just as physicians, economist or politicians. We as the people are getting the services that we need from the government which means we need to be researching information, being taught how the structure works in health care, and be well educated financial side of health care. I hope for change in the future to set for a healthier workforce and to protect the younger generation that is to follow in the retirement stages. The significant decline in the work labor has made it a shock to me but probably also to others that see that statistic are facts that represent true meanings of what is happening or what is going to lead to. Let’s make better choices for ourselves to set better goals for our future health care, and to acquire a secure and protect health plan, to decrease our chances of stress and expenses of health care costs.  

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The Burden Of Medicare: Potential Bankruptcy And Headed Towards A Financial Decline. (2022, February 10). GradesFixer. Retrieved September 24, 2022, from
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