Medicare: Past, Present and Future

Studies | Health

No. 299
Sunday, July 01, 2007
by Andrew J. Rettenmaier and Thomas R. Saving


Introduction

“Medicare's unfunded liability over the next 75 years is $32 trillion.”

Medicare is America's second-largest entitlement program, second only to Social Security.  Oddly, while Social Security has received the bulk of the attention in recent years, Medicare is growing at a faster rate and has a long-term debt six times larger than Social Security's.  Medicare's problems are well documented:  The program, which currently represents 16 percent of federal spending, will double in size within the next three decades and nearly triple by midcentury.  However, projected payroll taxes, premium payments and other revenues dedicated to Medicare are not nearly enough to meet these costs, leaving a deficit of more than $32 trillion over the next 75 years. 

How will future taxpayers and seniors afford Medicare's soaring costs?  That is the focus of this report. 1


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