I recently made another trip around the sun but I’m in good company. Our population is aging and we’re approaching a point where the age of our population may be at a tipping point for Medicare.
We’ve been hearing about the baby boomers for more than half a century and now they’re turning 65 which is the age of Medicare eligibility at a rate of 10,000 per day. Financing the baby boom’s health care expense will be front and center for the government for years to come. Today Medicare beneficiaries share of the population is 1 in 6 but by 2065 it will be 1 in 4. Making the situation worse is the number of full-time workers who will be supporting future retirees. In 2013 there are 5 full-time workers for every retiree by 2065 that ratio will be 3 to 1.
It’s going to be a challenge to continue to pay for Medicare but here’s the good news for health care workers. As the share of Medicare beneficiaries grows relative to the total population, so will the share of overall health care expenditures picked up by the government. The CMS projects Medicare’s share of the overall economy will nearly double over the next 50 years. Today Medicare counts for 3.3% of the GDP and by 2065 it’s projected to account for almost 6%.
So good news and bad news for you health care workers. You’re almost assured of having a job in the future – that’s the good news!!! Chances are a greater portion of your check will be going to taxes to help pay for Medicare – that’s the bad news!!!
On its current path and in current form, Medicare is not sustainable so I do believe we will see radical shifts in the structure of the program over the course of the next 20 years some of which has started with the shift to value based payments for hospitals and providers. I didn’t touch on Medicaid but ponder this as you try to wrap your mind around a possible solution for Medicare – the natoin is heading towards half its children being covered by Medicaid…