In 2010, there will be 65 new Medicare beneficiaries per eight seconds, or 7,000 each day; a total of 2.5 million baby boomers who will swamp America’s senior’s health care insurance program. According to AARP (American Association for Retired Person’s), 70 million individuals are estimated to be Medicare beneficiaries over the next 20 years, compared to 45.2 million in 2008.
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Economists predict that Medicare’s current 3.6% of GDP (gross domestic product) cost will jump to 6.4% in twenty years’ time, mainly because the costs of medical care and medications are going up considerably faster than inflation, rather than the impact of an aging population.
There is serious concern that the present system for elderly health care in America could become insolvent for a considerable number of baby boomers when they reach 65 years of age, most of whom have paid into the system while in work.
Sixty per cent of Americans expect full coverage for their medical care when they become Medicare beneficiaries, an Associate Press-GfK survey revealed. However, the surveyors stressed that baby boomers should not expect to get full coverage through Medicare taxes.
Put simply, costs are rising too fast for Medicare taxes to cover everything.
A couple of baby boomers who reach retirement and had paid $114,00 in Medicare payroll taxes will typically require medical care costs exceeding $350,000.
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