Sec. Leavitt to Greedy Governors: Medicaid Is Not A Bottomless Well

One of the “benefits” of the way we finance Medicare (and Social Security), at least, is that the law requires offically appointed actuaries to report annually on the fiscal status of the program, via the Medicare Trustees Report.

Each year, the horror of Medicare’s unfunded liability grows starker and closer. Very few politicians have the slightest interest in addressing this reality. One of those few (as I’ve noted previously) is U.S. Secretary of Health & Human Services, Michael Leavitt.

On the other hand, one of the (many) shortcomings of Medicaid is that it is financed from federal and states’ general funds, rather than explicit payroll taxes or premiums. This provides one explanation for why it has grown much faster than Medicare. The law does not require regular, actuarial, analyses projecting its costs into the future. So, Sec. Leavitt decided to have his department just do it.

American taxpayers can be grateful that he did. The first annual Medicaid actuarial report is a sobering examination of the future taxpayers’ liability for this out-of-control program, which will devour more of our nation’s wealth over the next ten years. (Imagine how bad it will be once they start projecting 75 years forward, as the Medicare trustees do!)

Even if U.S.S. Medicaid maintains its cruising speed, the number of people who fall into it is going to increase significantly. According to the report, the full-year enrollment in Medicaid last year for non-elderly people was 44.1 million, or 16.8% of the non-elderly population. By 2017, the figure will be up to 17.4% of the non-elderly population (47.8 million of a projected 275.3 million).

Will America’s greedy governors, who continuously lobby the federal government to make more people dependent on the state for their health care, be shamed into tempering their demands on the federal Treasury? Well, I wouldn’t put any money on it, but Sec. Leavitt has now provided the people with the information that we need to put such irresponsible demands in their place.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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