Will Medicare Bankrupt the U.S.?
In a lengthy, excellent piece over at the Center for Public Integrity, David Nather says that, the way things are going, it just might:
With its one-two punch of rising health care costs and more seniors to cover, Medicare will eat up more and more of the federal budget in the years ahead. But it's also politically untouchable. When either Democrats or Republicans try to suggest ways to trim the costs, they're accused of trying to push Grandma down the stairs in her wheelchair. Republicans did it to the Democrats during the debate over the new health care law, and Democrats are doing it now, at the height of election season, as Republicans float their own proposals.
Medicare is already growing faster than Social Security, and it could become bigger and more expensive than Social Security in the next 25 years. It is also growing faster than the economy, and if that keeps up, Medicare could cause the national debt to swell up to more than two-thirds of the gross domestic product in just the next decade.
For years, experts have also warned that Medicare faces trillions of dollars in unfunded liabilities — meaning that it will have to pay trillions of dollars more than the amount of money that is coming in. In fact, last year, the Medicare trustees warned that the program was facing more than $36 trillion in unfunded obligations.
The whole essay, which chronicles both the many ways in which Medicare is broken and the incredible political challenge of fixing it, is worth reading. Nather is particularly good at describing the inherent uncertainty in claims that the new health care law will keep costs from rising as quickly. Despite all those White House promises that overhauling the health system would bend the cost curve downward, the program—along with the national budget—is still in deep fiscal trouble. And since Congressional Democrats decided to take a big chunk out of Medicare and put that money towards a new health insurance entitlement, it's likely that Medicare cuts will be off limits when attempting to balance the budget.