1965 Medicare predicted cost of $26 billion in 2003

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In 1965, Medicare was predicted to cost $26 billion in 2003; the actual cost that year was $245 billion. Medicare's unfunded liability currently hovers around $40 trillion. A number of short-term problems plague the massive entitlement program. The program that pays for doctors' visits unexpectedly ran a $10.3 billion deficit last year and is likely to have one of $1.7 billion this year, despite congressional efforts to prevent such shortfalls.

According to National Bipartisan Commission on the Future of Medicare, Today, nearly 40 million Americans rely on Medicare for their health care. As the number of new Medicare beneficiaries rises sharply, there will be significantly fewer workers per retiree to fund Medicare.

Medicare Goes Broke in 2008
The Balanced Budget Act of 1997 (which also created the Medicare Commission) ensures solvency of the Medicare Part A trust fund for the next 10 years. But, without reform, the trust fund goes bankrupt in the year 2008.

Medicare Spending Affects Other Programs
Annual Medicare expenditures will climb from $207 billion, last year, to between $2.2 and $3 trillion by the year 2030. As a result, Medicare spending will become a much larger part of the federal budget, potentially affecting the funding of other important programs such as national defense, justice, health and safety and environmental protection.

Beneficiaries’ Out-of-Pocket Costs to Rise
As the Medicare system itself faces financial troubles, Medicare beneficiaries also face higher costs. Today, beneficiaries pay nearly 30 percent of their health care costs from their own pockets. In 1995, those costs averaged $2,563 per person to pay for premiums, services and products not covered by Medicare. In the future, out-of-pocket costs are expected to rise.

77 Million Baby Boomers to Enter Medicare
Medicare must be strengthened and improved to handle the increased demand of 77 million “Baby Boomers” (people born between 1946 and 1964) who will begin entering Medicare in the year 2011.

Fewer Workers Per Retiree to Fund Medicare
As the number of new Medicare beneficiaries rises sharply, there will be significantly fewer workers per retiree to fund Medicare.

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