As currently structured, entitlement programs can’t keep up with longer life expectancies and changing demographics.
Within a decade, the total price for Social Security, Medicare and Medicaid will reach $3 trillion a year, but we’ll have fewer workers paying into the system and supporting those growing costs.
Entitlement programs are not self-funding, and for the most part, never have been.
Money must be borrowed to make up for these shortfalls, making entitlements primary drivers of our deficits.
The trust fund for the Social Security Disability Insurance program will be exhausted in just three years.
- Soon, one-third of Americans will be retired and will spend one-third of their lives in retirement. Meanwhile, the ratio of workers to retirees has dropped precipitously.
- During this decade and the next, the number of Americans 65 or older will jump 75 percent, while those of working age will nudge up by just 7 percent.
Within a decade, the total price for Social Security, Medicare and Medicaid will reach $3 trillion a year, but we’ll have fewer workers paying into the system and supporting those growing costs.
Entitlement programs are not self-funding, and for the most part, never have been.
- Medicare has had a cash shortfall every year since its creation except two: 1966 and 1974. Medicare’s annual cash shortfall in 2011 was $288 billion.
- Social Security had a cash flow deficit of $58 billion in 2012.
Money must be borrowed to make up for these shortfalls, making entitlements primary drivers of our deficits.
The trust fund for the Social Security Disability Insurance program will be exhausted in just three years.
- The trust fund for Medicare Part A, which pays for hospital services, will go bankrupt in 13 years. That projection is based on a “rosy scenario” under which Congress will do something it has refused to do time and time again — cut payments to doctors.
- Social Security will be unable to pay full benefits beginning in 2033 and will be forced to reduce payments by 23 percent.
