Medicare: Enrollment Up 2x to 46 Million While Annual Payments per

Medicare: Enrollment Up 2x to 46 Million While Annual Payments per Beneficiary Up 26x to $8,325 From 1966 to 2009 Real Annual Medicare Payments per Beneficiary & Enrollment, 1966 — 2009 Em = m= me mm mo me mi i = eS =H = et 50 S ge Enrollment —— Annual Per Cap Benefits (in 2005 dollars) = eee eT Ty Ti Titi 4 2 s =] 3 = eh) ao 30 5 a -_ < o a E 2 ° & $4,000 —~— 1 - 20 = e uw > te) a & $200 PITT i 10 o 3 a $0 T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T T 0 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 KP Note: Data are inflation adjusted using BEA’s GDP price index. Source: Dept. of Health & Human Services. i USA Inc. | Income Statement Drilldown 103 Medicare: Observations e 46 million elderly Americans (15% of population) received an average of $8,325 in tax-payer funded payments for healthcare in 2009 ($5,079 for hospital care; $3,246 for medical insurance & prescription drugs). e On the surface, $8,325 in free healthcare benefits every year certainly seems like a high number — 23% of annual per-capita income — (although working Medicare recipients do pay Medicare taxes). e As with employer-sponsored health insurance plans, if people, in effect, get a free benefit (with little personal financial commitment), they may not be especially diligent and frugal about how they ‘spend’ it. The same concept extends beyond healthcare recipients to the healthcare providers.* e When Medicare was created in 1965 to provide health insurance to elderly Americans, 1 in 10 Americans received Medicare, now 1 in 7 Americans receives Medicare...above the initial ‘plan.’ Note: *The issue that people overuse services for which they do not have personal financial commitment applies to most private insurance as well. For a more detailed discussion, see slide 293. Data are inflation adjusted using BEA’s GDP price KP index. Source: Dept. of Health & Human Services. a USA Inc. | Income Statement Drilldown 104 HOUSE_OVERSIGHT_020893