Medicare, Social Security Owe Up to $52 Trillion to Current Retirees and Workers

Press Release:

DALLAS, Dec 03, 2008 /PRNewswire-USNewswire via COMTEX/ --

Debts Up To Three and Half Times Greater Than Entire U.S. Economy
If the federal government stopped the Medicare and Social Security programs tomorrow -- collecting no more payroll taxes and allowing no more accrual of benefits -- it would still owe up to $52 trillion to those who have already earned these benefits, according to a new study by the National Center for Policy Analysis (NCPA).
"The numbers are staggering," said Andrew Rettenmaier, an NCPA senior fellow and coauthor of the study. "No one thinks we are going to end these programs," he said, "but if we account for federal obligations the way private pensions and state and local governments are required to, the federal government owes up to $52 trillion (in current dollars) as of today."

To put the numbers in perspective, the size of the entire U.S. economy is $14 trillion. The newly released study determined that: --

An estimated $9.5 trillion is owed to current retirees -- an amount
equal to almost $250,000 per person 65 years of age and older in 2008.

-- Adding the liability owed to those nearing retirement (55 and older)
more than doubles the accrued debt to $20.6 trillion.

-- Adding the benefits accrued by younger workers brings the total to as
much as $52 trillion. The beneficiaries include all retirees, as well as
anyone in the workforce above 22 years of age.

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Bayer to Pay $97.5 Million to Settle Kickback Claim

From Bloomberg.com:

A unit of Bayer AG agreed to pay $97.5 million to settle accusations that it paid kickbacks to diabetic-equipment suppliers, the U.S. Justice Department said.
Bayer Healthcare LLC was accused of giving $2.5 million to Liberty Medical Supply Inc. to persuade Liberty to provide its patients with Bayer diabetic-testing equipment such as testing strips and glucose monitors, the Justice Department said in a statement.
Bayer also was accused of paying $375,000 in kickbacks to 10 other diabetic suppliers and causing them to submit false claims to Medicare, the government said. From 1998 through 2007 the suppliers filed false claims on the sales to get Medicare reimbursements, the statement said.
“Paying health care suppliers to place a particular brand of device with Medicare beneficiaries violates the law and will not be tolerated,” said Gregory G. Katsas, assistant attorney general for the Civil Division.
Bayer spokeswoman Susan Yarin said the payment puts the matter behind the unit, based in Tarrytown, New York.

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Miami physicians sentenced for Medicare fraud

From BizJournals.com:

Two Miami physicians were sentenced to prison on Thursday for their roles in an HIV infusion scheme that defrauded the Medicare program out of $6.8 million.
A Miami federal court judge sentenced Carlos Contreras, 61, to three years and Ramon Pichardo, 58, to four years in prison. They also were ordered to repay $4.2 million in restitution to the Medicare trust fund.
Contreras and Pichardo each pleaded guilty to one count of conspiracy to commit health care fraud. Contreras was owner and a doctor at CNC Medical Corp. in Miami. Pichardo was a doctor there.
Contreras and Pichardo admitted that, between November 2002 and April 2004, they conspired with others to file $6.8 million in false claims to the Medicare program for HIV infusion services that were not provided or medically necessary.

Top Rated Hospitals have 70% fewer deaths

As this article reports, patients that are treated in top rated hospitals have a 70% higher chance of surviving, than if they were to stay at hospitals with the lowest rankings. According to the study "HealthGrades Hospital Quality in America", 237,420 deaths of Medicare patients could have been avoided. The four most common reasons for death, in over have the patients included: sepsis, pneumonia, heart failure, and respiratory failure. The study was conducted using 41 million Medicare hospitalization records between the years of 2005-2007.

Senate Investigates Medicare Call Centers

Yesterday's Wall Street Journal reported on Senator Gordon Smith (R-OR) and his investigation into the quality of Medicare's call center brought to Capitol Hill. The call centers, run by Vangent, are under investigation because "In 50 test calls placed last month, wait times ranged from zero to 45 minutes, and six calls were disconnected while on hold. Call centers have provided at least one piece of incorrect information or been unable to provide a response to at least one question in 90% of test calls placed in the past year," reported the WSJ article. Vangent denies the allegations citing their high customer satisfaction percentages.

What do you think of Senator Smith's investigation?

Humana looses some Medicare Enrollees

As a result of premium bids that are higher than low income, government assigned members of Medicare, Humana expects to loose 10% of them at the beginning of 2009. However, according to the Wall Street Journal, they believe this could be positive for Humana due to the fact that higher prices would increase the bottom line, shares dropped 5% to $41.75 when it was announced that this could lead to a los of 380,000 eligible Medicare members. To ensure drug coverage for these dropped Medicare enrollees, the government will automatically re-enroll them in private drug care provider programs.