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Dr. Donald Berwick, administrator of the Centers for Medicare and Medicaid Services, talks with seniors about Medicare's Open Enrollment period in Washington, D.C., on Nov. 15, 2010.
Article Highlights
- Reminder: Last year's Medicare trustees report showed Medicare will run out of money to pay full benefits in 2024
- In 2011, #Medicare outlays had grown twice as fast as the economy for the last five years
- Baby boomers are reaching Medicare's eligible age for benefits (65) at the rate of 10,000 a day
The trustees report from the Center for Medicare and Medicaid Services is due out Monday, and while predictions are that the report will show the pace of cost increases has slowed somewhat, the medical insurance program for America's seniors is on a fast path to insolvency.
With 50 million people covered by Medicare -- and baby boomers reaching the eligible age of 65 at the rate of 10,000 a day – the latest release is not expected to ease any of the frustrations for patients, doctors and government number crunchers.
As a reminder -- and baseline for what to expect -- here's a look at five highlights from the 2011 trustees report:
1) Medicare will run out of money to pay full benefits in 2024, five years earlier than previously predicted.
2) Medicare outlays have grown twice as fast as the economy for the last five years.
3) As baby boomers start to retire, Medicare enrollment is expected to serve 64 million people in 2020.
4) Medicare spending represented 3.6 percent of GDP in 2010, or $523 billion.
5) From the 75-year budget perspective, the present value of the additional resources needed to meet unfunded projected expenditures, at current-law levels, is $33.8 trillion. That represents 3.8 percent of the present value of projected GDP, estimated to be $884 trillion, over the same period. In total, by 2085 Medicare expenditures are expected to equal 6.2 percent of GDP.
However, if Congress continues to override the statutory decreases in physician fees, and if the reduced price increases for other health services under Medicare become unworkable and do not take effect in the long range, then Medicare spending would instead represent roughly 10.7 percent of GDP in 2085.
Kicker: Data from the Urban Institute show that a two-earner couple turning 65 in 2011 and earning the average wage will use an estimated $357,000 in combined Medicare services over a lifetime while contributing a total of just $119,000, including both individual and employer contributions.
AEI research assistant Catherine Griffin contributed to this report.
