MEDICARE COSTS ARE WORST OF ALL
April 29, 2009
If you're stressed out over the possibility that Social Security costs will overwhelm our federal budget, wait until you see the impact of Medicare, says author Terry Savage.
- While Social Security (and railroad retirement benefits) are estimated to cost the government approximately $600 billion in fiscal 2008, Medicare costs will soon exceed the bill for Social Security.
- Medicare currently costs the government $390 billion a year, but its rate of growth is twice as fast as Social Security's.
- And that is before you factor in costs for the new Medicare Part D drug program.
- Conservatively, it's estimated that in the next ten years, Medicare spending will consume at least 25 percent of federal income tax revenues.
Keep in mind, that doesn't include a fast growing segment of government spending -- Medicaid. This shared program with the states is also growing exponentially, as it is used to cover nursing home care costs for indigent seniors, says Savage:
- The combination of Social Security, Medicare and Medicaid payments will soak up nearly two-thirds of every dollar collected in income taxes in 2030; since 1970, the share of gross domestic product spent on health care has more than tripled, from 5 percent to 16 percent, according to the National Center for Policy Analysis.
- Health care spending will exceed 40 percent of gross domestic product (GDP) by 2040 -- just 30 years from now, according to Congressional Budget Office and Medicare forecasts.
Source: Terry Savage, "Medicare Costs Are Worst of All," MoneyShow.com, April 27, 2009.
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