Restructure Medicare & Medicaid: Mathematical Illustration #1 — : n * 0 Reduce Medicare Benefits* By 53% Sizing the problem: It would take massive (53%) benefit cuts to address the shortfall of Medicare* fundin BRITE a sc 2 ss 6 9 ns = cI 8 a i a Se = 5,179 “ -53% $5000 =---=--=-- a t= t= A a = = & wo — se $4000 0° ons macs = Ages os om ona = aR RON = So eB $3 = 5 i] am wang = -~-=<-<-- Ss Za $2,434 wo oe fe $2,000 Zaieiiaiataiaieieiaaiiaiaiaiaiais So as a $1000 ---------- pn mam = mn men mu Bm mo mm am nam 5 $0 Note: For mathematical illustrations, we simply calculate 8099, a revenue increase AND / OR expense iecreasPour 1S Beyond ant program needs to reach financial break-even. These calculations are merely mechanical illustrations and are not meant to portray realistic solutions. Source: Dept. of Health & Human Services forecast in “2009 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical insurance Trust Funds,” 5/09. *Note that data presented here are limited to Medicare Part A (Hospital Insurance) Trust Fund. Medicare Part B (Medical _ Insurance) and Part D (Prescription Drug Benefits) are primarily funded via insurance premiums and general tax revenue transfers. Note also that data presented KP here are estimates prior to PPACA (2009 healthcare reform). (@E) www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 273 Restructure Medicare & Medicaid: Mathematical Illustration #2 — 1 ce) ie) Increase Medicare Tax Rate From 2.9% to 6.8% Sizing the problem: It would take massive (3.9 percentage points) payroll tax hikes on individual and g _.._. businesses to address the Medicare* funding shortfall —__ Percentage Be a en oo <li jem re = i) [a ne See eee Serre ee - a i) > iy) a 2 ee ee ee See ee UD coms oS = ee 1 ae = ae ee GANA MESES TANS A SA ES TE om Oe Be sa a 0 2009 2010&Beyond Note: For mathematical illustrations, we simply caiculate how big a revenue increase AND / OR expense decrease each maj