Hypothetical Mean

Commentary from an Actuarial and Economic Perspective

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Adventures of an Actuarial Therapist

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It was a dark and stormy night.  I was closing up my office, and this scraggly old man in a red, white and blue top hat came scrambling in.  He called himself Sam.

Sam: Hey doc, you gotta see me.  My fiscal situation is a “ticking time bomb”.  We’re racing toward financial ruin, and I need to talk.

Me: Take a seat on my couch.  Tell me more.

Sam: Let’s talk Medicare.  In the near-term, the aging of the population is estimated to explode its costs beyond our means.  In the longer-term, medical innovation and utilization patterns threaten to bankrupt the country.

Me: Sounds rough.  Any ideas on how to fix the problem?

Sam:  I thought I’d start by offering somewhere between a $1 trillion and $2 trillion entitlement to help working age people get insurance.

Me: I think I missed something.

Sam: No, you didn’t.  I think that if we can wring a trillion dollars of revenue and cost savings out of the American public and Medicare, then we can give that extra entitlement and not speed up our impending fiscal disaster.  If we are lucky, we can put private insurance companies into the same situation I am.

Me: You mean fiscally insolvent?

Sam: Don’t worry.  We’ll set up a public option that will always be there if private insurance can’t survive under our new mandates.

Me:  I’m still stuck on how you are going to help Medicare or your fiscal situation.

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Written by Victor

July 18, 2009 at 2:08 pm