Baby Boomers Expected to Drain Medicare
The biggest generational wave in history could leave Medicare system broken.
Dec. 31, 2010— -- The first baby boomers will turn 65 Jan. 1, beginning a flood of applications for Medicare benefits that experts fear could drain the economy and hold political repercussions for President Obama.
The baby boomer generation marked a huge reproductive uptick between 1946 and 1964, when 76 million children were born, creating a higher demand across the nation for schools and consumer products, and an upheaval in popular culture.
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But this post-World War II generation's overwhelming demand on the Medicare system could possibly leave future generations with a bigger bill.
Medicare currently covers 46 million people, costing the government about $500 billion a year. But when the last of the iconic generation reaches 65 in about 20 years, more than 80 million people will be eligible for Medicare coverage, although the number of working people paying into the program will have decreased from 3.5 per person receiving benefits to 2.3.
The increase in the number of people eligible for benefits paired with the rising costs of health care and longer life spans threatens the program's sustainability. It could force the administration and Congress to come up with a plan to reduce costs, either by cutting benefits or raising taxes.
A recent Associated Press-GfK poll found that 61 percent of Americans favored raising taxes in lieu of slashing benefits. The poll included adults in their 20s, who potentially could end up paying more into the system.
Fifty-one percent opposed the idea of giving older Americans a fixed payment to use against the cost of private insurance, an option made popular by Rep. Paul Ryan, R-Wis. Sixty-three percent opposed raising the age of eligibility.