Big Problems For Medicare

You paid your Medicare taxes all those years and think you deserve full benefits after you retire.

Nearly 60% of people surveyed in an AP poll felt that they paid into the system so their benefits shouldn’t be cut. However, a new financial analysis shows that what taxpayers have paid into the system doesn’t even come close to covering the full cost of the medical care they can expect to receive as retirees.

Although Americans are worried about Medicare’s long-term solvency, few realize the size of the gap. Many workers believe that their Medicare payroll taxes are going for their own medical insurance for when they retire. This is not the case. Today‚Äôs withholdings are actually used to pay the bills of seniors currently on the program.

Recent debt reduction proposals have called for big changes to Medicare. Some plans call for phasing out the program, replacing it with a fixed payment to help future retirees buy a private plan of their choice.

Medicare covers 46 millions seniors and disabled people now. When the last of the boomers reaches age 65 in about 20 years, Medicare will be covering more than 80 million people. At the same time, the ratio of workers paying taxes to support the program will have plunged from 3.5 for each person receiving benefits currently, to 2.3.