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June 23, 2016 at 12:30 PM
You may think you do a good of long-range planning for your practice, but the forecasters who work for the Medicare trustees probably have you beat.
This year, they are doing their best to create long-range health care cost projections and other projections for 2090. The projections incorporate assumptions about workers who may not even be born until about 2076.
The trustees are predicting that the main Medicare Part A hospitalization trust fund may run out of cash in 2028. At that point, Medicare might bring in only enough cash from payroll taxes to pay 87 percent of its 2028 obligations.
Related: Medicare fund to run short in 2028; IPAB still projected in 2017
But, on the other hand, a lot can happen between now and 2028.
Just 17 years ago, in 1999, one of the print publications behind LifeHealthPro.com, National Underwriter Life & Health, reported that the Medicare Part A fund was on track to go broke in 2015.
Policymakers stepped in and kept that from happening.
One obvious conclusion to draw is that predicting what will really happen to the Medicare hospitalization insurance program, or any other human program, in 2090 is not possible.
Seventy-four years ago, for example, the United States had just started fighting the Second World War. The United States did not have commercial use of electronic computers, microwave ovens, penicillin or microchips. People had no idea that interstate highways would crowd out street cars, or that urban planners worried about pollution and traffic would try to bring back street cars. Major sources of personal insurance lines health risk included polio and tuberculosis.
In connection with “Star Trek,” writers have looked ahead and decided that Earth will send its first faster-than-light probe out of the Solar System in 2067, which is 23 years before the end data for the long-range projections in the new Medicare trustees’ report. The writers have decided Earth will establish its first permanent Moon colony in 2090.
A great deal could change between now and 2090.
But, on the other hand, if you work downtown in a big U.S. city, chances are you benefit from use of a street grid created by urban planners 100 or more years ago. You may have gray-haired adult clients who are only now cashing in “baby life insurance policies” friends or relatives gave them when they were born 50 or more years ago.
For life and health insurers, planning what might happen to disability insurance or long-term care insurance insureds 20, 30 or 40 years in the future is part of everyday life.
Thinking about what the United States officially might look like in 2090 could help you think about that kind of medium-range planning in a different way.
For five glimpses of how the Medicare trustees’ forecasters see the United States operating in 2090, read on:
(Illustration: iStock)
1. U.S. gross domestic product could amount to about $464 trillion in 2090.
GDP is to a country what total income is to a human being. Economists use “GDP” as a synonym for “national income.”
The 2090 GDP figure is in a supplemental table, “Ratio of HI Taxable Payroll to GDP.”
That’s up from about $18.7 trillion this year, and up from $815 billion in 1966, the earliest year shown in the table.
Taxable payroll could amount to 44 percent of GDP in 2090. That would be down from 44.8 percent this year and up from 37 percent in 1966.
Related: Medicare Hospital Insurance Trust Fund
(Illustration: iStock)
