NCPA - National Center for Policy Analysis

Medicare at Age 50: Unlikely to Make It to 100

October 21, 2015

Americans born in 1900 and earlier were eligible for Medicare at its inception in 1965, but the life expectancy for men and women born in 1900 was under 50 years of age. The few men who lived to see their 65th birthdays around the time Medicare began could only expect to live another dozen years or so -- and women could only expect a few years more than men, says senior fellow Devon Herrick of the National Center for Policy Analysis.

Life expectancy has increased dramatically over the past half-century. As a result:

  • About percent 70 of Americans born in 1950 are still alive and now reaching Medicare eligibility at age 65.
  • One-in-five Americans born in 1950 will live to see their 85th birthday.
  • Men born in 1950 and turning 65 today can expect to live another 17 years, while women can expect another 20 years of life.

It is not just the proportion of Americans reaching Medicare eligibility that is driving up the program's cost, nor is it the number of years they remain on Medicare. Per capita spending on Medicare beneficiaries has also skyrocketed:

  • In 1970, annual per capita Medicare spending was only $385.
  • Today it is $12,430, and it is projected to approach $19,000 a decade from now.
  • Of the $12,430 spent per beneficiary in 2014, $5,400 was spent on physician care while $4,900 was spent on hospital care.
  • About $2,100 was spent on drug therapy.

Spending on Medicare beneficiaries is on course to grow another 58 percent in the coming nine years. In 1970, payroll taxes and premiums paid for virtually all Medicare spending. Today, general revenues are needed to pay about 43 percent of Medicare costs -- comprising about 1.5 percent of GDP. Only two decades from now, general revenues will be needed to cover more than half of the program's costs.

Source: Devon Herrick, "Medicare at Age 50: Unlikely to Make It to 100," National Center for Policy Analysis, October 21, 2015.


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