Robert L. Ehrlich, Jr. Medicare newsletter to constituent, 1996

NEWS FROM Robert L. Ehrlich, Jr. Second Congressional District of Maryland 1 407 York Road, Suite 304 315 Cannon House Olfice Building Lutherville, Maryland 21093 Washington, D.C. 205 1 5 Dear Friends: Our American health care system is the best in the world, and maintaining this system is one of the most important issues facing the country. A year ago, the 1995 Medicare Trustees' Report warned Congress of the financial crisis the Medicare system and its current and Congress's Plan: Medicare Spending Per Beneficiary A 46 Percent Increase The Problem, The Facts... In April 1995, the Medicare Trustees, including 3 Clinton cabinet members, reported the Medicare Hospital Trust Fund (Part A) would be bankrupt in 7 years if no changes were made. ► In June 1996, the Trustees reported Medicare Part A to be in worse condition than previously reported and to be bankrupt in 4-5 years. ► Congress's plan to save Medicare responsibly proposes to slow the rate of growth of the pro¬ gram, which is currently increasing at three times the rate of inflation. ^ In 1995, the Annual Report showed Medicare needed $165 billion over 7 years to retain its solvency. ^ In 1996, the Annual Report showed Medicare now needs $298 billion to retain its solvency. ► Last year, for the first time. Medicare began taking in less money than it spent. The program is now spending down the surplus it had built up. With each new day. Medicare spends $25 million more than it takes in. future beneficiaries are facing. As a result. Congress produced and passed an honest, reasonable plan which ensured long-term solvency, increased spending per beneficiary, and combated fraud and waste. It raised per beneficiary spending from $4,800 in 1995 to $7,100 in 2002. Unfortunately, President Clinton vetoed this plan, putting the future health care security of 33 million Americans at risk. We can, however, save a good system by taking immediate affirmative steps and handling the problem in an open, pragmatic manner. By working together, we can ensure that the next Medicare Trustees Report paints a brighter pic¬ ture. Very truly yours, L<№ 1L, ROBERT L. EI-IRLIOJyTR. Member of Congress Why Is Medicare Going Broke? A year ago, experts estimated the Trust Fund established to pay for Part A of Medicare — hospital costs — would run out of money in 2002. Now they are predicting "the fund will be empty by 2001 and will plunge further and faster into the red as spending USA Today put the problem in clear terms: "The nation's population is aging, which increases the num¬ ber of people who will become beneficiaries of the Medicare program and thus increase expenses. As the baby boom generation reaches 65 beginning in 2010, the number on Medicare will explode." Today there are 33 million Americans over the age of 65. In 2025, that number will soar to 63 million! Presently, there are four workers paying into Medicare for each beneficary. That ratio is expected to be about 2-to-l by 2025. The only alternatives are to reform Medicare or to double payroll taxes' on employees. THE MEDICARE PRESERVATION ACT allows us to protect our seniors without raising taxes on our children! Medicare Hospital Insurance Trust Fund Balance