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Medicare Cost Crisis Looming for Seniors

April 01, 2002

Why does the pronouncement by our Social Security commissioner on the prognosis of Medicare sound so much like the Arthur Andersen audit on Enron ("Social Security, Medicare Prognosis Is Upgraded," March 27)? The fact is that Medicare has so far balanced its budget mainly through arbitrary reduction on reimbursement to health care providers. The reduction is 5.4% for this year alone and projected to reach 20%-plus in the next few years.

Given that the annual Consumer Price Index still rises by around 3% and the cost of running a medical practice by at least twice as much, one can easily surmise that in less than two to three years the cost to provide health care for the seniors will exceed the reimbursement by Medicare.

Some physicians have already opted out of the Medicare program due to its declining payment and onerous regulations, and it should not be too surprising that many more will follow suit in the next few years.

Unfortunately, most of the seniors today will remain oblivious to this looming crisis until a rolling blackout on health care jolts them out of their complacency--like what the energy crisis did to us last year.

John T. Chiu MD

Newport Beach

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