Medicare Faces Inadequate Financing
Spending Grew 44 Percent in Past 3 Years
Medicare—the world’s most expensive single-payer health-care program—is not adequately financed for the next ten years, according to the Medicare Trustees’ 43rd report to Congress, released March 25.
The report notes that Medicare’s hospital (Part A) expenditures, which were $203.1 billion in 2007, are projected to more than double to $414.9 billion by 2017. But hospital trust-fund assets are projected to fall from $326 billion this year to $96 billion in 2017.
Total Medicare expenditures are expected to grow to more than $867 billion annually by 2017. “In the long range, projected expenditures and scheduled tax income are substantially out of balance, and the trust fund does not meet our test of long-range close actuarial balance,” the report emphasized.
Total Medicare expenditures amounted to $431.5 billion in 2007 (up from $301.5 billion in 2004). There about 44 million Medicare recipients. That means that the average amount spent per individual recipient was $9,807.00. But, more importantly, it is estimated that only about 180 million people are taxpayers in the US -- that is, about 60% of the population. So, for each of you taxpayers, your share of Medicare is $2,397.00 each year. Thus, it takes just four taxpayers to pay for each Medicare recipient's average share of benefits. That's in addition to any insurance costs you pay for your own family.
In addition to Part A’s $203.1 billion, last year’s Medicare expenditures included:
- $178.9 billion for Medicare Part B (physician visits, outpatient hospital, home health and other services) and
- $49.5 billion for Medicare Part D (prescription-drug coverage and premium and cost-sharing subsidies for low-income enrollees).
Medicare enrollment grew to 44.1 million people in 2007—36.9 million seniors and 7.2 million disabled—up from 41.9 million in 2004. That is a 5.24 percent increase over three years, while total expenditures grew by 44 percent. (Note: Table II.B1 states that total Medicare expenditures were $431.5 billion in 2007; Table V.F4 states that total Medicare expenditures were $434.7 billion in 2007.)
Source: “2008 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,” March 25, 2008: http://www.treas.gov/offices
