There's a reason they call economics the "dismal science", it often tells us things we would prefer to ignore. There has been concern about the financial viability of Medicare for decades and while there has been some tinkering around the edges, the politics associated with Medicare (senior citizens tend to vote) have so far prevented any far reaching overhaul.
Our current concerns come from people living much longer now than when Medicare was created so some of the basic actuarial assumptions of the program are outmoded. Then you have the front end of the Baby Boom generation just entering into Medicare eligibility which will result in swelling enrollment in Medicare for decades to come. Finally, you have the number of actively employed persons paying Medicare taxes becoming a smaller and smaller ratio to the number of people claiming benefits. Oh, yes, and if you haven't noticed, the base cost of virtually all health care services continues to rise faster than the general inflation rate.
So, you have more people enrolling and using the benefits for increasingly expensive care while at the same time you have a smaller pool of payers to financially support the current and upcoming enrollees. This is why many economists warn of the financial failure of Medicare if structural changes are not made to the program.
That is an excellent question! The eventual collapse of Medicare and Medicaid has more than just economists worried. And I said eventual collapse, since I believe that it is much more likely that our current Government philosophy of income disparity politics will continue to prevent any kind of significant reform or refunding of those programs. Without overhauling, the system is predicted to bankrupt in 2024. The Affordable Care Act ( Obamacare) created a series of fat trimming cuts that in theory will add 5 years to the life of the programs. As of the 2012 Census statistics, 55% of all seniors are currently at poverty level, and the statistics suggest that further cuts in just food stamps will double the currently 15% of Americans living in poverty (46.5 million households, and that number is woefully under estimated, as the formula for computing it is still based on 1963 data - bet you can't find a gallon of milk, or gas for what you paid in 1963). Jared Bernstein, a noted economist, calculates that the poverty rate will increase nearly 500% when SSI tanks in 2030. Now imagine the financial hardship on our Seniors, and our economy, when their medical expenses can't be paid for either. Something has to give, or we'll be seeing our parents and grandparents out on the streets, or not at all. An interesting statistic? 50 % of Americans combined own what the top 30 individual Americans do - $793 billion dollars. 47% of Americans own nothing, their debt is equal to or greater than their assets. I've been very blessed, God has been good to me and my family, but I'm worried, and if you have parents or grandparents, you should be too, as millions of folks depend on it. Thanks for asking!
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Our current concerns come from people living much longer now than when Medicare was created so some of the basic actuarial assumptions of the program are outmoded. Then you have the front end of the Baby Boom generation just entering into Medicare eligibility which will result in swelling enrollment in Medicare for decades to come. Finally, you have the number of actively employed persons paying Medicare taxes becoming a smaller and smaller ratio to the number of people claiming benefits. Oh, yes, and if you haven't noticed, the base cost of virtually all health care services continues to rise faster than the general inflation rate.
So, you have more people enrolling and using the benefits for increasingly expensive care while at the same time you have a smaller pool of payers to financially support the current and upcoming enrollees. This is why many economists warn of the financial failure of Medicare if structural changes are not made to the program.