Medicare may grow to become the most important entitlement program for seniors in the coming decades. As medical costs increase, the cumulative lifetime benefits received from Medicare could one day surpass the lifetime benefits seniors receive from Social Security. Thus, the future of Medicare is critical for the 40 million seniors currently covered by the program, as well as the countless millions who'll become eligible in the coming years.
Medicare is in trouble
But Medicare has some serious issues to contend with. While designed to help seniors aged 65 and up cover approximately 80% of their eligible medical costs, the program simply isn't bringing in enough revenue via the payroll tax to cover its long-term costs. Based on the latest report from the Board of Trustees, the Hospital Insurance Trust is projected to exhaust its cash reserves by 2030 (or sooner if medical cost inflation is higher than expected). If this were to happen without any reforms being made by Congress, reimbursements to hospitals and physicians would be reduced to the amount of revenue being brought in on a monthly basis.