Medicare Now and in The Future

Publication Date: October 2008

Publisher: Henry J. Kaiser Family Foundation

Author(s):

Research Area: Health

Type: Brief

Coverage: United States

Abstract:

Medicare is a valuable source of health insurance for nearly 45 million Americans – mainly seniors ages 65 and older, but also 7 million younger adults with permanent disabilities. Before Medicare was signed into law in 1965, about half of all seniors lacked hospital insurance. Today, virtually all people ages 65 and over are covered by Medicare.

Medicare is a popular program, but faces a number of issues and challenges in the years to come. A critical challenge is how to finance care for future generations without unduly burdening beneficiaries, taxpayers, or the general economy. Another pressing issue relates to the role of private plans in Medicare, in light of rapid enrollment growth in recent years, and concerns about the current payment system for private plans. A third issue is the relatively new Medicare prescription drug benefit and how to address concerns about its current structure and further limit the burden of prescription drug spending. Lastly, there is the challenge of how to make health and long-term care more affordable for beneficiaries in light of rising health costs.

Medicare plays a central role in broader discussions about the future of entitlement programs. Together, Medicare, Medicaid and Social Security account for more than 40 percent of the federal budget. Given ongoing concerns about the state of the economy, the candidates’ positions on these popular but fiscally challenged programs are of profound importance to the retirement security of current and future retirees.