This is the accessible text file for CG Presentation number GAO-07- 526CG entitled 'Medicare: Taking Care of Your Future?' which was released on March 1, 2007. This text file was formatted by the U.S. Government Accountability Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. Please E-mail your comments regarding the contents or accessibility features of this document to Webmaster@gao.gov. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. Because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. United States Government Accountability Office: Medicare: Taking Care of Your Future? Florida State University: Pepper Institute: February 22 2007: The Honorable David M. Walker: Comptroller General of the United States: Composition of Federal Spending: [See PDF for image] - graphic text 3 pie charts with 5 items each. 1966: Defense: 43.0%; Social Security: 15.0%; Medicare & Medicaid: 1.0%; Net interest: 7.0%; All other spending: 34.0%. 1986: Defense: 28.0%; Social Security: 20.0%; Medicare & Medicaid: 10.0%; Net interest: 14.0%; All other spending: 29.0%. 2006: Defense: 20.0%; Social Security: 21.0%; Medicare & Medicaid: 19.0%; Net interest: 9.0%; All other spending: 32.0%. Source: Office of Management and Budget. Note: Numbers may not add to 100 percent due to rounding. [End of figure] Major Reported Long-Term Fiscal Exposures ($ trillions): Explicit liabilities (Publicly held debt, military & civilian pensions & retiree health, other); 2000: $6.9; 2006: $10.4; Percent Increase: 52%. Commitments & Contingencies: e.g., PBGC, undelivered orders; 2000: $0.5; 2006: $1.3; Percent Increase: 140%. Implicit exposures; 2000: $13.0; 2006: $38.8; Percent Increase: 197%. Implicit exposures: Future Social Security benefits; 2000: $3.8; 2006: $6.4; Percent Increase: [Empty]. Implicit exposures: Future Medicare Part A benefits; 2000: $2.7; 2006: $11.3; Percent Increase: [Empty]. Implicit exposures: Medicare Part B benefits; 2000: $6.5; 2006: $13.1; Percent Increase: [Empty]. Implicit exposures: Medicare Part D benefits; 2006: $7.9; Percent Increase: [Empty]. Total; 2000: $20.4; 2006: $50.5; Percent Increase: 147%. Source: 2000 and 2006 Financial Report of the United States Government. Note: Estimates for Social Security and Medicare are at present value as of January 1 of each year and all other data are as of September 30. Totals may not add due to rounding. Percentage increases are based on actual data and may differ from increases calculated from rounded data shown in table. [End of table] Potential Fiscal Outcomes: Alternative Simulation-Discretionary Spending Grows with GDP and Expiring Tax Provisions Extended (January 2007) Revenues and Composition of Spending as a Share of GDP: [See PDF for image] - graphic text: Line/Stacked Bar combo chart with 4 groups, 1 line (Revenue) and 4 bars per group. 2006; Net interest: 1.7%; Social Security: 4.2%; Medicare & Medicaid: 3.9%; All other spending: 10.5%; Revenue: 18.4%. 2015; Net interest: 1.3%; Social Security: 4.6%; Medicare & Medicaid: 4.9%; All other spending: 8.0%; Revenue: 19.9%. 2030; Net interest: 1.3%; Social Security: 6.5%; Medicare & Medicaid: 8.3%; All other spending: 7.8%; Revenue: 20.1%. 2040; Net interest: 3.5%; Social Security: 7.0%; Medicare & Medicaid: 10.3%; All other spending: 7.8%; Revenue: 20.1%. Source: GAO's January 2007 analysis. Notes: AMT exemption amount is retained at the 2006 level through 2017 and expiring tax provisions are extended. After 2017, revenue as a share of GDP is held constant-implicitly assuming action to offset the impact of bracket creep and to modify the offset of AMT. [End of Figure] Issues to Consider in Examining Our Health Care System: The public needs to be educated about the differences between wants, needs, affordability, and sustainability at both the individual and aggregate level: Ideally, health care reform proposals will: * Align Incentives for providers and consumers to make prudent decisions about the use of medical services, * Foster Transparency with respect to the value and costs of care, and: * Ensure Accountability from insurers and providers to meet standards for appropriate use and quality. Ultimately, we need to address four key dimensions: access, cost, quality, and personal responsibility: Selected Potential Health Care - Reform Approaches: Reform Approach action action: Revise the government's payment systems and leverage its purchasing authority to foster value-based purchasing for health care products and services; Short-term action: Check; Long-term action: [Empty]. Reform Approach action action: Consider additional flexibility for states to serve as models for possible health care reforms; Short-term action: Check; Long-term action: [Empty]. Reform Approach action action: Consider limiting direct advertising and allowing limited importation of prescription drugs; Short-term action: Check; Long-term action: [Empty]. Reform Approach action action: Foster more transparency in connection with health care costs and outcomes; Short-term action: Check; Long-term action: [Empty]. Reform Approach action action: Create incentives that encourage physicians to utilize prescription drugs and other health care products and services economically and efficiently; Short-term action: Check; Long-term action: [Empty]. Reform Approach action action: Foster the use of information technology to increase consistency, transparency, and accountability in health care; Short-term action: Check; Long-term action: [Empty]. Reform Approach action action: Encourage case management approaches for people with chronic and expensive conditions to improve the quality and efficiency of care delivered and avoid inappropriate care; Short-term action: Check; Long-term action: [Empty]. Reform Approach action action: Reexamine the design and operational structure of the nation's health care entitlement programs-Medicare and Medicaid, including exploring more income-related approaches; Short-term action: Check; Long-term action: Check. Reform Approach action action: Revise certain federal tax preferences for health care to encourage more efficient use of health care products and services; Short-term action: Check; Long-term action: Check. Reform Approach action action: Foster more preventative care and wellness services and capabilities, including fighting obesity and encouraging better nutrition; Short-term action: Check; Long-term action: Check. Reform Approach action action: Promote more personal responsibility in connection with health care: Short-term action: Check; Long-term action: Check. Reform Approach action action: Limit spending growth for government- sponsored health care programs (e.g., percentage of the budget and/or economy); Short-term action: [Empty]; Long-term action: Check. Reform Approach action action: Develop a core set of basic and essential services. Create insurance pools for alternative levels of coverage, as necessary; Short-term action: [Empty]; Long-term action: Check. Reform Approach action action: Develop a set of evidence-based national practice standards to help avoid unnecessary care, improve outcomes, and reduce litigation; Short-term action: [Empty]; Long-term action: Check. Reform Approach action action: Pursue multinational approaches to investing in health care R&D; Short-term action: [Empty]; Long-term action: Check. [End of table] On the Web: Web site: [Hyperlink, http://www.gao.gov/cghome.htm]: Contact: Paul Anderson, Managing Director, Public Affairs AndersonP1 @gao.gov (202) 512-4800: U.S. Government Accountability Office 441 G Street NW, Room 7149 Washington, D.C. 20548: Copyright: This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. 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