From Foresight, Vol. 6, No. 2
published 1999
Without changes, Medicare, the nation’s $207 billion-a-year, chronically ailing system for providing health care to seniors, is projected to go broke in 2008, reports Business Week. The shortfall will come decades before Social Security could exhaust its trust fund and before 77 million Baby Boomers start collecting Medicare benefits. A potentially fatal combination of rising health care costs and inescapable demographics is predicted to cause Medicare costs to rise from 12 percent of the budget today to more than 27 percent in 2030. While the White House and Congress are taking the first steps toward discussing the problem, the most obvious fixes—raising taxes, limiting coverage, or making wealthier participants pay more—are considered politically risky. Though congressional policymakers may not be ready to make hard choices, time is of the essence.
In spite of gaps in its coverage, namely long-term care and prescription drugs, Medicare provides a critical health care safety net for older Americans. It is particularly important to disproportionately poor Kentuckians and to older women who live longer and are more likely to be solely dependent upon Medicare coverage than men. In the face of rising health care costs, limited public resources, and the aging of our population, hard choices about the scope of entitlements must be made if we are to preserve this key safety net. And looming budget shortfalls mean the more quickly we develop prescriptions for funding, the more likely they will provide a long-term cure for Medicare’s budget maladies.