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| Washington
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Medicare, the real crisis
(click to enlarge) |
Isabel M. Estrada Portales
05/20/2005
As the supposed crisis of Social Security is being discussed,
Medicare, the white elephant in the room, is being ignored.
Democrats and Republicans, for a change, agree in the urgency
of addressing a crisis in Medicare that will show the first
fall out as soon as 2019. But both parties know the dimension
and potential political cost of the issue, so it’s put
on the back burner.
For Hispanics, Medicare is extremely significant, since not
only the number of Hispanic seniors will triple over the next
decade, but Hispanics have the lowest income, and the least
probability of having a private insurance to supplement Medicare,
therefore their higher dependency on the government program.
If Medicare’s funds are exhausted by 2019, as predicted,
the Hispanic community will feel the brunt of the problem.
Medicare is the federal health insurance program covering
nearly 42 million Americans—35.4 million seniors and
6.3 million people under age-65 with permanent disabilities.
Medicare benefits are expected to total $325 billion in 2005,
accounting for 13% of the federal budget, according to the
Congressional Budget Office (CBO).
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| Washington
Hoy |
| Drop Facts (click to enlarge) |
Medicare covers a diverse population: 71% of beneficiaries
have two or more chronic conditions, 29% are in fair/poor
health, and 23% have cognitive impairments. A relatively small
share of beneficiaries (10%) account for a large share (69%)
of total spending.
Many on Medicare live with modest incomes and assets; 51%
have incomes below 200% of poverty ($19,140/single and $25,660/couple
in 2005); and 48% of non-institutionalized Medicare beneficiaries
have countable assets (savings accounts, stocks, bonds, etc.)
below $10,000.
Medicare and Latinos
Thanks to Medicare, minorities and low income people in
general have equal access to mainstream medical care. Elderly
and disabled Latino account for 7% of Medicare beneficiaries.
With the aging of the baby boom generation, the Latino share
of U.S. elderly population will more than triple between
now and 2025, when one in six elderly Americans will be
of Latino descent, according to U.S. Census Bureau.
“Elderly and disabled Latino Medicare beneficiaries
differ in many ways from their non-Hispanic white counterparts,”
states a report by the Kaiser Family Foundation. “They
experience higher rates of serious health problems and are
more likely to be living in poverty.”
New drug benefit
According to Robert E. Moffit, Ph.D., and Brian M. Riedl,
from the Heritage Foundation, when the new drug entitlement
takes effect in 2006, seniors will pay an estimated $420
in additional drug-related premiums in the first year, plus
a $250 deductible.
“The government would then pay 75 percent of drug
costs up to $2,250. Above that amount, seniors would pay
$3,600 out of pocket--the “doughnut hole”--before
becoming eligible for catastrophic coverage, with the government
paying 95 percent of catastrophic costs and seniors paying
5 percent.”
“Unlike the hospitalization payments, which are drawn
from dedicated taxes deposited in a trust fund, the government
will pay for the drug benefit from general revenues.”
“All our estimates showed that the cost of the drug
benefit, through 2013, would be in the range of $500 billion
to $600 billion,” said Richard S. Foster, Medicare’s
chief actuary.
According to Moffit and Riedl, this is just for the next
10 years, before the baby-boom generation hits the program
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