Solving the Medicare Crisis - Case Study Example

It is worth mentioning that the largest portion of the American economy dumps into health care programs for the citizens of the country. Medicare comprises the largest portion of the health care budget of the US. Due to the sensitivity of issues surrounding US Medicare program, this paper will identify the contemporary challenges, discuss the challenges, other specific issues surrounding the crisis within the Medicare of US. Solving the Medicare Crisis With the growing population of aged people in America, Medicare is gaining much popularity due its structure of saving and providing health care to the old age members of the society.

The importance bestowed on Medicare cannot be overlooked at the expense of any other crisis that could be facing the scheme. Worthy to note is that Medicare started experiencing circumstantial crisis in the year 2007 at the verge of global financial crisis. Being among the influential sectors of the economy, US government increased its budget margins extended to the health care and Medicare in particular. However, the problems and crisis facing Medicare in US are persistent and unresponsive to the government huge budget allocation to support the program and improve general quality of health care in the US.

Currently the government has set a Congress panel to analyze the contemporary crisis and make viable decisions. Why Medicare is in a Crisis and Why Radical Reforms are Necessary The American Medicare is in dire situation of liquidation and termination as the number of consumers faces an upward tilt resulted by the predictable growing number of aged people. Eure (2005) reports that crisis facing health care could increase and become worse than in the future years. In order to preserve and ensure sustainability of the program, certain radical measures are essential and of great need in such a situation.

How is Medicare funded now? Why do the elderly feel that Medicare is an insurance program, not a welfare program? Is this perception accurate? According to Robinson (2011), Medicare program gets fund in different ways depending on the divisions. Robinson (2011) mentions that Part A of Medicare program that covers in-patient hospital bills is catered for by Hospital insurance Fund (HI Fund). Part A division of Medicare gets finance from the 1.45% government’s deductions made on the pay slips of workers and employers in general.

Part B of the Medicare run by Supplemental Medical Insurance (SMI Fund) covers the appointments of doctors. SMI Funds obtains finances from the premiums and the general national budget. Robinson (2011) exemplifies that premiums and taxes channeled into the SMI Funds undergoes yearly adjustments and therefore can never be overdrawn. Robinson (2011) reveals that the Congressional Budget Office through the reflection of the HI Funds usually determines the stability of Medicare. According to Robinson (2011), in spite of the great contribution of taxes and premiums to the Medicare, the vast cost of Medicare gets financial support from the government.

The funding of Medicare program is usually sourced from the taxation of individual employees working in the US economy (Emmanuel, 2011). In addition, individual employees organize for payment of monthly premium that is deducted from the salary of the stakeholders. Eure (2005) unveils that in 2004, individual participants in the Medicare program paid a total of $66. 60 per month.