Modeling Solutions for Prevention of Medicare Insolvency for the Baby Boomer Generation (Born 1946 - 1964)
Medicare, a United States social insurance program operated by the United States federal government, began operating in a deficit in the year 2010. More funding was expended than revenue received for medical care, creating significant shortfalls for the Medicare Trust Fund. This study examined possible initiatives to describe Medicare funding related to issues as financial shortfalls utilizing mathematical modeling and simulation. The Park Conceptual Model is a framework created to identify internal and external changes that influence bankruptcies related to municipalities, and this Model served as the theoretical basis for this study. The following study addressed insolvency as negative cash flow and solvency as positive cash flow for the Medicare Trust Fund measured in United States dollars. Independent variables included: age increases, tax increases, and fraud reduction. These variables were modeled individually and in combinations to simulate Medicare revenue impacts in relationship to solvency that equate to break even or positive revenue for the Medicare Trust Fund. Mathematical models and multiple regression analyses were conducted to determine if Medicare solvency could be obtained for years 2013 to 2030. The results from this study demonstrate that a 2.9% Medicare payroll tax increase prevented Medicare insolvency for years 2013 to 2030.
Medicare, Baby Boomers, Model, Insolvency, Health and Medical Administration, Health Economics, Health Services Research
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