NCPA - National Center for Policy Analysis


February 14, 2008

All three major senior programs -- Social Security, Medicare and Medicaid -- experienced dramatically escalating costs that outstripped inflation and the growth in the senior population in 2007, according to a USA Today Analysis.


  • Overall, the cost of government benefits for seniors soared to a record $952 billion in 2007, or $27,289 per senior.
  • The Medicare prescription drug benefit, started in 2006, accounts for about one-fourth of the increase in Medicare, which provides health benefits for people 65 and older.
  • Long-term care costs per senior have declined slightly in the last three years because of a move away from nursing homes to less-expensive home care.
  • The cost of senior benefits is equal to $10,673 for every non-senior household; about 35 percent of the federal budget is spent on senior benefits, up from 32 percent in 2004.

According to Eugene Steuerle, a senior fellow at the Urban Institute, the full cost of senior benefits goes beyond Social Security, Medicare and Medicaid.  A complete estimate would include other programs for retirees, such as military and civil servant pensions and medical benefits, he says.

Source:  Dennis Cauchon, "Senior benefit costs rise 24% since 2000," USA Today, February 14, 2008.

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