Medicare Going Broke? Not Part-D.

The Medicare Trustees released their annual report today, and the news isn’t good. It seems that the program can’t be sustained financially without serious reform:

Medicare’s Hospital Insurance Trust Fund is projected to be exhausted in 2019 … These projections demonstrate the need for timely and effective action to address Medicare’s financial challenges …

And what sort of reforms would be effective. Well, as it happens, the report does contain some good news about Part-D that should suggest a solution;

The latest cost projections for Part D through 2015 are 13 percent lower than estimated in last year’s report (and substantially lower than the original estimates from 2003) …

Now, why is the news for Part-D so much better than for Medicare as a whole? Hmm … what’s different about Part-D? Could it be competition?

Plan bids for 2007 were 10 percent lower than in 2006, as a result of intense competition among plans to attract and retain enrollees …

For anyone not congenitally hostile to the market, the solution to Medicare’s financial crisis is obvious. The market-oriented approach that is working so well for Part-D needs to be implemented throughout the entire Medicare program.

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