Medicare Case Analysis

In the early 1900s having insurance was inconsequential, health care was relatively affordable and when the general population needed to go to the hospital, the hospital had an affordable payment plan. However, as insurance companies were being implemented, the United States was experiencing an increase of expenditure in medical care and the population was experiencing a longer life expectancy due to the medical advancements that was being made. During this time the population over the age of 65 as well as the indigent population was finding it hard to find medical coverage whether it was because insurance companies did not want the high risk of the elderly population or people were unable to afford the premiums. President Theodore Roosevelt

According to The Henry J Kaiser Family Foundation (2015), the historical trend of Medicare between the years of 1969 and 2013 grew at an average annual rate of 7.5 percent which was slower than the 9.1 percent growth rate of private insurance spending per enrollee. In addition, The Henry J Kaiser Family Foundation (2015), also states that in the last five years, Medicare spending has decreased compared to the previous decade at an average 4.1 percent between the years of 2010 to 2014 with a rate of 4.1 percent, from 2000 to 2010 the average rate was documented at 9 percent. Moreover, the spending per beneficiary has also decreased from 7 percent in 2000 to 2010 to 1 percent from 2010 to 2014 (The Henry J Kaiser Family Foundation, 2015). The Congressional Budget Office, states that spending per beneficiary equates to approximately 1,200 dollars per person and decreases can be contributed to the ACA being implemented (The Henry J Kaiser Family Foundation, 2015). With the application of the ACA, the health care industry has had the ability to introduce various delivery systems that have had an impact on decreasing expenditure with Medicare

The biggest concern is whether Medicare will have the ability to sustain itself. Medicare has recently celebrated 50 years in 2015, and as our society is learning, Medicare has outpaced inflation, growth in the general economy, as well as growth in the federal budget (Moffit, 2016). The fact of the matter is that there were 77 million American born during the years of 1946-1964 which equates to about 10,000 people per day are turning 65 everyday (Moffit, 2016). Many policymakers suggests that Medicare by the year 2040, Medicare will reach a 5.8 percent gross domestic product (GDP), and in 2087 it will reach anywhere between 6.5 percent to 9.8 percent depending on future cost savings, productivity gains and limits on spending (Hensley, 2013). However, there are other policymakers that suggest Medicare is never going bankrupt because the ACA has had the ability to help curve spending for Medicare (Van de Water, 2016). Van de Water (2016), states that Part A will remain solvent with the ability to pay one hundred percent of hospital bills by the contribution of raising revenues and by the slowing the growth of costs to at least 2028. In addition, Van de Water (2016), states Part B will have the ability to remain solvent with the contributions of beneficiary premiums and general revenue. The opposing side argues that there is a decline in workers in the workforce that by 2030 there will be 2.4 workers for every person on