Restructure Medicare & Medicaid: Mathematical Illustration #1 —
Reduce Medicare Benefits* By 53%
Sizing the problem: It would take massive (53%) benefit cuts to address the shortfall of Medicare*
$2,434
Average Annual Medicare* Payments per Beneficiary ($)
20108Bey
Note: For mathematical illustrations, we simply calculate 7099, a revenue increase AND / OR expense decrease each major LORS ont program needs to reach
financial break-even. These calculations are merely mechanical illustrations and are not meant to portray realistic solutions.
Source: Dept. of Health & Human Services forecast in “2009 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary
Medical insurance Trust Funds,” 5/09. *Note that data presented here are limited to Medicare Part A (Hospital Insurance) Trust Fund. Medicare Part B (Medical
insurance) and Part D (Prescription Drug Benefits) are primarily funded via insurance premiums and general tax revenue transfers. Note also that data presented
| here are estimates prior to PPACA (2009 healthcare reform). (@E www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 273
Restructure Medicare & Medicaid: Mathematical Illustration #2 — Increase Medicare Tax Rate From 2.9% to 6.8%
Sizing the problem: It would take massive (3.9 percentage points) payroll tax hikes on individual and
g ------- businesses to address the Medicare* funding shortfall —_ 7 6 Se o 35 cI a“ x 4 = ° & 3 © a
2009 2010&Beyond
Note: For mathematical illustrations, we simply calculate how big a revenue increase AND / OR expense decrease each major entitlement program needs to reach financial break-even. These calculations are merely mechanical illustrations and are not meant to portray realistic solutions.
Source: Dept. of Health & Human Services forecast in “2009 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,” 5/09. *Note that data presented here are limited to Medicare Part A (Hospital Insurance) Trust Fund. Medicare Part B (Medical i... and Part D (Prescription Drug Benefits) are primarily funded via insurance premiums and general tax revenue transfers. Note also that data presented
here are estimates prior to PPACA (2009 healthcare reform). www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 274
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