Will Medicare End in 5 Years?
“Crunch time for Medicare is just five years away, according to the latest annual report from the trustees who oversee the program. The trustees say the popular health care program for seniors will begin to run short of money in 2026, the same doom date as in last year’s report.
“Social Security is in slightly better shape, with enough funding to stay solvent through 2033. But that’s one year sooner than last year’s forecast.”
Will the government really let Medicare collapse?
Very unlikely. Millions of seniors are on the program. And seniors are the most reliable set of voters there are.
“If Medicare becomes “insolvent” and Congress does nothing about it, that doesn’t mean the program would stop paying benefits.
“It means Medicare would pay less than 100% of benefits. The main funding mechanisms for Medicare are a 2.9% payroll tax, general revenue from the Treasury Department, income tax on Social Security benefits and premiums paid by enrollees. Money from the 2.9% payroll tax goes into a “trust fund” that can’t be used to pay for anything else.
“In the past, the payroll tax generated more money than Medicare spent, leaving a surplus that helped pay for future benefits. But costs have exceeded dedicated funding for most of the last 13 years, as medical costs rise disproportionately, the population ages, more Americans join Medicare, and people live longer.
Yes, but will Medicare end in 5 years?
“The trustees estimate that Medicare would still be able to cover 91% of its hospital obligations in the first year after the surplus dries up. That percentage would then decline as the gap between Medicare’s revenue and its obligations widened.”
Even that is unlikely to happen, because as Yahoo Finance puts it–
“The medical industry would pressure Congress and start warning patients that Uncle Sam is blocking lifesaving care. The press would play its amplifying role by highlighting all the tragedies likely to unfold if Congress doesn’t keep Medicare fully intact.
“Congress has fixed Medicare before, though in slapdash, temporary ways that hint what Congress is likely to do this time around.”
Expanding Medicare?
Making the situation more complex is that costs could go up. Why? Because Congress is considering lowering the Medicare age, nor raising it. And there is the possibility of new benefits that Original Medicare does not currently cover– dental, vision, and hearing.
My own sense is that news organizations will continue to remind us of the thinning of the financial safety cushion of Medicare. Meanwhile, the Congress knows no one– especially reliably voting seniors– wants to have something as important as health care– taken away from them.
You can see the original article here: https://finance.yahoo.com/news/medicare-isnt-as-broken-as-it-sounds-184504831.html
You can learn more about me at this link.
