As you read this, a funny thing is happening. Hair is greying, prostates are enlarging, and bladders are drooping as the baby boomers race (on prosthetic joints) towards the promised land at the finish line of life. Fortunately, through the miracle of modern medicine (and E. coli-free bean sprouts), our seniors are living longer and hardier than no generation seen before. And that promised land is less likely to be a light at the end of a long tunnel, and increasingly is a condo in Florida with prime views of 8th hole and preferred tee times.
The end result is that medicare enrollment is about to skyrocket with more than 70 million boomers set to enter the golden years in the coming decades.
And all that good living doesn’t come cheap. As medicare enrollment booms, so will its cost. I have conducted my own actuarial analysis of Medicare; using my third grade level arithmatic I have estimated that medicare will soon cost 14 gazillion dollars per year (. . .but if you don’t trust my math, the Congressional Budget Office’s estimates are in the graph below).
The CBO estimates that costs for medicare will go from about $526 billion in 2010 to $669 billion in 2015. And by 2020 that price tag will continue to increase to about 980 bi. . . oh what the heck let’s just call it an even trillion (what’s $20 billion among friends).
So what’s a politician to do when the numbers don’t add up? Or in this case add up to way more than we could possibly afford? The answer is ofcourse to reduce spending, in the form of a higher retirement age, or reduced coverage for patients and reduced payments for services. How do you think Grammy is gonna feel about this? Well, let’s see.
As you can seen, Grammy don’t like this one bit, neither do mom & pops and the grandkids. Either nobody explained to them that unless Grammy gets by with less, her kids are gonna have to get by on next to nothing, or maybe they don’t care. Or maybe she figures (and rightly so) that she paid into this thing for years, and therefore is entitled to the promised benefits.
Unfortunately those promises were nothing more than an outlandishly rosy scenario conjured up by a previous generation of politicians and the people who loved (being lied to by) them. The results of which were completely predictable and completely ignored by most.
Still, seniors and near seniors make up a powerful voting bloc, and would likely prevent any significant cuts to medicare in the near future. Yet the increasing revenue gap demands action. America’s creditors want to know that our debtor nation is still investment grade. All of this adds up to one indisputible fact: Someone’s health care is going to get the screws put to it, it’s just a matter of figuring out who. Who is that somebody likely to be? More in a future post.