US Seniors' Health Program All Set to be Swamped by Boomers

by Kathy Jones on  January 1, 2011 at 6:32 PM Health Insurance News
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As the post-World War II generation becomes eligible for the government-administered health insurance for seniors, the struggling US Medicare program is about to be swamped.
 US Seniors' Health Program All Set to be Swamped by Boomers
US Seniors' Health Program All Set to be Swamped by Boomers

Thousands of the oldest of the so-called baby boomers -- people born between 1946 and 1964 -- will Saturday turn 65, the age at which they become eligible for the Medicare program for older Americans that has been run by the US government since 1965.

A baby boomer will turn 65 every eight seconds in 2011, meaning Medicare will gain some 7,000 potential new beneficiaries a day next year, according to the AARP, a non-profit organization that aims to improve the quality of life for older Americans.

That would mean more than 2.5 million potential new Medicare recipients next year alone.

Over the next two decades, more than 70 million people are projected to become eligible for Medicare, which covered 45.2 million people in 2008.

As the number of Americans who are eligible for Medicare grows, spending on the program is projected to expand from 3.6 percent of gross domestic product in 2009 to 6.4 percent in 2030.

That is largely because health care costs rise faster than inflation but also because of the increased demand placed on the program by an aging population.

Those two factors combined have raised concerns that the health program for US seniors could become insolvent during the lifetime of baby boomers, who have paid into Medicare throughout their working lives.

But John Rother, executive vice president for policy at the AARP, said those concerns were alarmist and there was no need to sound Medicare's death knell just yet.

"We do need to do better at getting higher value for the dollar in all health care programs, including Medicare, and it's true that so many boomers enrolling in the program is going to add a sense of urgency to that," Rother told AFP.

"But it's also true that people who are 65 and first eligible for Medicare statistically do not use much in the way of health services. It's only when they get into their mid-70s and 80s that they're likely to need intensive and expensive health care," he added.

"We have some time to make adjustments."

Medicare doesn't pay for all of a person's medical costs, but the AARP says it can still be a "very welcome 65th birthday present."

The program is backed by a majority of Americans, according to the Kaiser Family Foundation, which says that "meeting the health care needs of an aging population is a pressing challenge for the nation."

To keep Medicare afloat, US lawmakers have proposed raising the age at which people can receive benefits from the program.

But Rother said that would "just change who pays the bill," while newspaper commentator John Curtis wrote in the Los Angeles City Buzz Examiner that raising the eligibility age would be "no fix at all."

Curtis suggested a means test to determine whether a person is eligible for Medicare.

"If beneficiaries have the means to provide for their own retirement income and health insurance, then the government should not pay for it," Curtis wrote.

"Millionaires and billionaires earning retirement incomes above 250,000 dollars must forego Social Security income and pay for Medicare premiums."

But given the kerfuffle raised by Republicans over hiking taxes on Americans who earn 250,000 dollars or more, which saw President Barack Obama strike a compromise deal with them to avoid seeing middle class Americans pay higher taxes, a Medicare means-test looks unlikely.

And Rother said the Medicare system already takes into account the fact that the wealthy can afford to pay more and charges them higher premiums for prescription medications and other services not covered by the portion of payroll taxes that they paid into Medicare during their working lives.

Source: AFP

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