Two documents that anyone supporting or opposing the proposed new healthcare reform bills should read before considering any bill are: (1) the AMA news of May 18th of this year, and (2) The FY 2008 Annual Report of the Board of Trustees of the Medicare/Medicaid Trust Funds. I could not find the 2009 report, but since the economy is worsening, I assume it will not contain better news.

http://www.ama-assn.org/amednews/200...8/gvsb0518.htm
http://www.cms.hhs.gov/reportstrustf...ads/tr2008.pdf

The AMA News tells us that the Medicare budget for FY 2010 is $758.9 Billion; an increase of $56.3 Billion or eight percent over FY 2009.The is more disturbing than it appears at first since the underwriting assumptions for the Medicare budget forecast a rate of growth of 6%.

We have all heard that the needed savings in Medicare (~$500 billion over the next ten years) that will be needed to help finance a new healthcare program will come from eliminating waste, fraud and duplication in Medicare. We have not seen the savings from duplication and waste, but the fraud numbers are in.

HHS Secretary Kathleen Sebelius. Has gone on the record saying, "The president's budget lays out funding for anti-fraud efforts over five years that we estimate could save $2.7 billion." This is a savings of less than one tenth of one percent of the total amount that will be spent on Medicare over the next five years.

The Trustees Report, ignored largely by both sides, is that Medicare in going broke over the next seven years. Here is an excerpt from the FY 2008 Annual Report of the Board of Trustees, "The difference between Medicare’s total outlays and its “dedicated financing sources” is estimated to reach 45 percent of outlays in fiscal year 2014, the seventh year of the projection. As a result, the Board of Trustees is required to issue a determination of projected “excess general revenue Medicare funding”

To put this in plain English, it is saying that through FY 2010, the projected income from payroll taxes and other sources including the Trust fund, will meet Medicare benefits. After 2010, Medicare outlays will have to be supplemented with funds from General Revenues. By 2014, nearly fifty percent of the funds spent on Medicare will come from General Revenues and will cause the current budget deficit to skyrocket. These projections were done with a projected rate of increase of outlays by 6% per year, not the 8% we have been experiencing.

What this means to healthcare reform is that the entire $500 billion projected savings in Medicare/Medicaid expenditures will be needed to continue to fund these programs; and, in addition, funds will have to be diverted from General Revenues. There will not be a single penny left over to fund new healthcare programs.

This is neither Democrat nor Republican, Conservative, Progressive, Libertarian or Liberal. It is simply fact. Before we go forward on anything, lets get the finances in order.