There’s been a lot of scaremongering lately about the future of the Medicare program. Is Medicare really going broke? How serious is the Medicare “crisis”?
Here are some facts to help you decide.
First, you should understand that this is all a bit like the boy who keeps crying “wolf”: The Medicare trust fund — which covers hospitalization and which is financed by the Medicare payroll taxes we all pay during our working years — was previously predicted to run short of funds in 1972. And in 1993. And in 2003.
It never did go broke, of course, because each time, Congress made small adjustments to the program to resolve the problem.
Now, the latest report from the Medicare trustees has projected that the trust fund will run short in 2024. So yes, there is reason for concern about Medicare’s future but no cause for panic.
This report is like the maintenance reminder light on your dashboard, not a red alarm bell. Just because you need to change the oil in your car, it doesn’t mean you need to junk it.
Similarly, this new projection doesn’t require a radical transformation of Medicare. Once again, Congress could make small adjustments that would extend the life of the program — adjustments like a modest increase in the payroll tax, for example. All they need is the political will.
Second, you may have heard the news that the House of Representatives passed a budget plan that would transform Medicare into a voucher program (supporters call it “premium support”).
Under the House plan, everyone born after 1957 would no longer get a guaranteed set of Medicare benefits.