Memo

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Memo To: Representative Howard Hughes From: Date: Re: Panel discussion on funding Medicare crisis Message: Below please find outline of current Medicare cost concerns as well as some history on the program as well as some plan options to cutting overall costs. Medicare is facing a major financial crisis. The federal government subsidizes medical care for more than 45 million elderly and disabled Americans through Medicare. Medicare is the third-largest federal program after Social Security and defense, and it will cost taxpayers about $430 billion in fiscal year 2010. Medicare is one of the fastest-growing programs in the federal budget, with spending likely to double over the next decade and to surpass Social Security…show more content…
Interest made from this trust fund also contributes to the income of the fund, to be used by the beneficiaries. AARP suggests that in the year 2000, four workers contributing to the fund covered each Medicare beneficiary. Realizing that Part A had some flaws, and could prove to become very expensive for those patients who were chronically ill and might not be able to afford treatment within the given coverage guidelines of Medicare Part A, CMS devised an optional Medicare Part B program, commonly referred to as “physician services”. Medicare Part B not only adds additional insurance, but also covers other health care needs, particularly those not covered by Part A. This Supplemental Medical Insurance (SMI) does not cover the services 100%, but rather 80%, where the beneficiary would only be responsible for the remaining 20%, also known as a coinsurance. (Lonchyna) Prior to Medicare being enacted into law, all individuals seeking assistance from medical providers, namely physicians, had to do so at their own expense. These individuals were left to pay for their medical treatments and consultations by

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