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Medicare, Medicaid Tab Keeps Growing

Medicare and Medicaid spending rose 10% in the second quarter from a year earlier to a combined annual rate of almost $992 billion, according to new data from the Bureau of Economic Analysis (BEA). The two programs are on track to rise $90 billion in 2011 and crack the $1 trillion milestone for the first time.

The jump in health care spending is the biggest since the Medicare prescription drug benefit was added five years ago and ends a brief lull in the spending increases that occurred during the economic downturn.

The debt limit and spending package approved by Congress and Obama don’t restrict costs of Medicare, Medicaid and other entitlement programs. The rapidly escalating costs of the health care programs will challenge lawmakers seeking to rein in federal spending in the future, especially in 2014, when coverage expands to people who are uninsured now.

The latest spending surge in federal health care is driven by more people getting more treatment, not by price increases. Health care inflation is at its lowest level in more than a decade — a 1.7% annual rate — but the aging population and the weak economy are sending more patients to government-financed care.

Medicare and Medicaid paid a record 57.5% of patient bills for hospital, doctors, drugs and other care in the last quarter, up from 49.3% in 2005.


5 Responses

  1. The government has the responsibility to crack down on fraud and not let the illegal aliens get any, any goodies/benefits. We tax paying, law abiding citizens are tired of this mess.

  2. Fraud and illegal aliens aren’t what is running up the costs. Americans demand a high degree of services, and the high demand is forcing up prices. A big chunk of spending is on “end of life care” (e.g. cancer therapies for older patients, giving them a few extra months and even just weeks, but costs tens of thousands of dollars). In fact Americans want the latest and best therapy, and don’t really like the idea of paying for it, and thus the Treasury is increasingly expected to come up with the money.

  3. to #3 I agree with you 100%. #2 I am surprised by your comment, it sounds like you are questioning the “few months” we learn that every moment we are alive counts. to #1, yes we need reform on illegals get care. However, we do need to remember these are people too. I think a good policy would be for illegals not to receive care for one year from the time they register that they are in the US. of course, if it is life threatening then yes care is given, but not for a sore throat in a ER. If there was some type of register system, then US can have names and addresses of this people. My biggest gripe is that they make money here and send it back home, and do not pay taxes. There has to be a solution…but YES our seniors deserve care even if it is a few weeks of life. Illegals are people……

  4. #3- but they didn’t pay enough to cover the benefits they are receiving – indeed they are receiving expensive treatments that didn’t exist 50 years ago. The problem is that medicare fees were set too low, both out of wishful thinking and not realizing the increased technology would be more expensive.

    If a person wants to spend every last dime at treatments hoping for a miracle, that is certainly their right. However they shouldn’t try to spend everyone else’s last dime (or in this case, the Treasury’s). Few of us would expect our children and grandchildren to sell their homes and take out loans to buy for an experimental treatment that at best might extend our lives by a matter of weeks – yet that is what Medicare is doing, and that is the main cause of the problem (along with 50 years of having set rates too low).

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