To follow up on Drae’s excellent post on the coming Social Security crunch, I found the following story by CBS News about Medicare. Starting tomorrow, the US will see 10,000 Baby Boomers turn 65 each day for the next 19 years.
On New Year’s Day, the first baby boomers will celebrate the big 6-5, and they’re not just getting older. They’re getting more costly.
“Boomers” are the 77 million Americans born from 1946 through ’64. Beginning Jan. 1, 10,000 a day will turn 65. That will continue for the next 19 years.
“The retirement of the baby boom generation will bring a tsunami of spending that will cause a severe problem for the federal government’s budget over time,” said David Walker, former U.S. comptroller general and CEO of the Comeback America Initiative.
Take Medicare, health care for the elderly and disabled:
• The number of people eligible will nearly double from 46 million to 80 million by the time all the boomers reach 65.
• It’s estimated the cost will grow from $500 billion a year today to $929 billion by 2020.
• The number of workers supporting each senior will fall.
“Ultimately we’re going to have to make tough choices about how much health care can we afford and sustain and how are we going to change our payment systems to make sure that it doesn’t bankrupt the country,” said Walker. “Because if there’s one thing that could bankrupt the United States, it’s out-of-control health care costs.”
Medicare is already underfunded by at least $23 trillion. That’s the difference between the benefits promised and the taxes actually being paid into Medicare. It could go bankrupt as early as 2017. Yet Americans still, apparently, want it all. According to a new Associated Press/GfK poll, they don’t want to raise the age for Medicare.
So we will be adding over 70 million Medicare-eligible people over 19 years into a system that is already underfunded by 23 trillion. This is a problem that we have known would eventually occur since…well, since Medicare was created. The Baby Boomer generation was not exactly a secret. Congress, in their inimitable fashion, responded to this looming crisis by doing absolutely nothing. The only question is which will go first. Medicare or Social Security.