If the federal government fails to reform our health finance system, Medicare alone could consume about 8.4% of U.S. gross domestic product by 2050.
Members of the Medicare Steering Committee at the American Academy of Actuaries, Washington, have published that figure in a review of the 2008 Medicare trustees’ report.
The Medicare Hospital Insurance trust fund is expected to go broke in 2019, and the 2008 trustees’ report, released earlier this week, suggests that the fund will become insolvent slightly earlier than the trustees predicted in the 2007 Medicare trustees’ report, the AAA committee members write.
If the government managed to sustain the current rate of increase in Medicare spending until 2050, Medicare and Social Security together would consume about 80% of federal revenue in 2050, up from 40% in 2008, the AAA committee members warn.
“If we are to avoid this trend, reforms must be made to address the rapid growth in Medicare expenditures,” the committee members write.
“It is important to recognize that the problem of rising health care spending in the Medicare program reflects spending growth in the U.S. heath system as a whole,” the committee members conclude. “Therefore, unless spending in the health system as a whole is addressed, implementing options to control Medicare spending may have limited long-term effectiveness.”