Why Medicare probably won’t last

October 26 01:00 2015 by ushadmin

Medicare turned 50 this year, but one organization doubts if it will live to see 100.

Devon Herrick, Ph.D., a senior fellow at the National Center for Policy Analysis (NCPA), has released a new report identifying three factors driving Medicare toward bankruptcy. Number one on his list is lengthening life expectancies.

“When Medicare was first formed, a lot of [people] didn’t make it to the Medicare age. It’s good news that we can expect to live almost 20 years after we reach eligibility, and in the future we know that that will increase even further, but that leads us into the second point,” he tells OneNewsNow. “That means we’re spending a lot of money on ways that are often very beneficial, but it’s also costly.”

In 1970, per capita spending for Medicare was $385. According to Herrick, that is a small amount, even when adjusting for inflation. Today, however, more than $12,000 is spent per beneficiary.

Herrick, Devon (NCPA)”Estimates are that we’ll be spending $19,000 per beneficiary about ten years from now,” the NCPA senior fellow notes.

The issue of rising drug prices is another factor driving Medicare toward bankruptcy.

“Our drugs are getting very expensive. Used to … if drugs cost $100 a month, we thought that was outrageous. Well, the fastest-growing segment of drug costs are those costing $1,500 or more per month,” Herrick explains. “A third of all drug spending is on these specialty drugs, and in many cases, they are great products. In other cases, they’re just overhyped and not great products, but we still have to pay for them.”

Herrick concludes that government regulations are partly to blame, while the FDA “just does not have the resources to process and approve applications for companies that want to compete.”..