Looming Crises In Medicare

As the nation braces itself for nationalized health care, a new report from the Urban Institute gives a good indication of the type of hit that taxpayers will suffer because of future government spending on health care for Medicare.

The average American receives three times more medical care benefits than the amount they pay into Medicare — this is from a recent audit from economists at the Urban Institute. As an example, if a 2-income earner couple making $89,000 a year will retire this year, they will have only paid $114,000 into the system during their lifetime careers. But they will most likely draw out $355,000 in medical services during retirement. The audit estimates these service will range from medicine to hospital care.

Medicare now covers about 46 million people and that number is expected to double by the time all the “boomers” have reached retirement age in about 20 years. The big problem is that the number of working Americans that pay into the system won’t be able to keep up. Right now, 3.5 workers are paying into the system for every one who’s getting benefits. That number is expected to drop by two-thirds (Yikes!) to 2.3 workers for every Medicare recipient. Taxes haven’t risen at the same pace as Medical costs have and benefits are triple the amount of taxes.

How long can we sustain such a broken system? Many people predict that the system will implode and private insurance remains a preferable option. At least private insurers invest the money that they take in premiums. The government does not invest any of the Medicare (or payroll) taxes.

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