The Medicare Trustees Report is an extensive accounting of the solvency of Medicare, with all its complexity. The report seeks to address the key issues and cost drivers within the system which may weaken or threaten its long-term sustainability.
In 2017, 58.4 million people received healthcare benefits through our Federal Medicare program. Those 65 years and older represented 49.5 million and the remaining 8.9 million received Medicare benefits due to disability. Over 34% of beneficiaries chose a Medicare Advantage Plan (Part C) over traditional Medicare.
This annual report projects that Medicare will exhaust its funds by 2026, three years earlier than what was projected last year, if we do not act with a sense of urgency to reform Medicare. As a gross domestic product, Medicare will rise from 3.7% to 5.9% by 2042, complicated by an increase in baby boomers eligible for Medicare at a pace of 10,000 per day, beginning 2019.
The primary issues threatening the solvency of Medicare include the following:
A disproportionate income of payroll tax funding compared to Medicare expenditures
The 80/20 rule, a small subset of Medicare beneficiaries with complex, catastrophic health conditions consume the majority of funds for inpatient hospitalizations and very costly specialty drugs.
The high cost of end of life care exhausts 25% of the Medicare Trust Fund, annually
As more seniors continue to work beyond the age of 65 years and those disabled due to a bodily injury or accident join the ranks of those who qualify for Medicare benefits, it will remain critical to ensure worker safety to prevent injury. Technologies and systems designed to prevent injury or accidents will gain wider acceptance, and more data analytics will be leveraged to gradually, but deliberately shift the insurance paradigm from claim processing to claim prevention.
We can expect more discussions regarding payer models and aligning physician incentives, value-based care initiatives in workers compensation. There will be heated debates about end of life care and health care models for individuals with terminal or complex, catastrophic conditions to continuously improve access and quality of care at a lower cost.
Expect exponential gains in healthcare innovation including the use of technologies and data analytics to streamline and coordinate care; more gadgets for health monitoring and wellness promotion; greater efforts to improve the health care delivery process; movements toward transparency in healthcare pricing and interoperability for electronic health records amongst consumers, providers, payers and institutions.
For primary payers’ subject to Medicare Secondary Payer (MSP), we can expect that CMS will continue its efforts to recover funds from primary payers through more guidance, namely for liability and auto no-fault claims, including data mining and integrations to increase recovery, particularly for complex, catastrophic claims.
For primary payers adopting a digital transformation for claims, identifying, managing, measuring and monitoring MSP compliance through data analytics, will become a higher priority.
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