In 2011, the first US baby boomers, who were born in 1946, reached the age of 65 years and became eligible for Medicare. The baby boom lasted approximately 20 years, which means that the proportion of senior citizens will rise dramatically until approximately 2030, from 13 to an estimated 20 of the total population, growing from 42 million people in 2010 to 70 million in 2030 ioi. Older groups, such as those over the age of 80 years, will grow even faster. This demographic 'time bomb' is partly responsible for the worries that Medicare will go bankrupt. The most recent estimates by the trustees of the Medicare program indicate that for Part A of the program, Hospital Insurance, which is funded by a mandatory payroll tax, assets will be depleted by 2024, at which point, "beneficiary access to healthcare services would rapidly be curtailed" 102. While other parts of Medicare, particularly physician services and pharmaceuticals, also face challenges, they are funded by general revenues rather than a payroll tax and are not threatened in the same way. As with any program facing deficit, revenues must be raised or expenditures lowered. Raising revenues, however, proves to be difficult. It is true that some changes have been made at the margins - in particular, charging wealthier individuals more in premiums. However, the type of changes necessary to bolster revenue enough to support future expenditures would involve raising the payroll tax. Currently, 2.9 of payroll is taxed to support Medicare, split evenly between employers and employees (with another 12.4 earmarked for Social Security, which provides cash benefits), a rate that has not increased for a quarter of a century. The political climate in the country makes an increase in the payroll tax rate almost inconceivable.
展开▼
