Confronting Urgent Realities: THE BOOMERS’ LENGTHENING SHADOW
These four measures alone, however, will be inadequate to meet Medicare’s longer-term commitment to future beneficiaries. Closer examination of the impending baby-boomer avalanche highlights both the difficulty and the urgency of revitalizing its ability to do so. During the 1990s and continuing through this decade, Medicare’s annual enrollment growth has been minimal as two million seniors age in each year while a few less die.
Meanwhile, the ratio of workers to beneficiaries continues to be nearly stable; however, starting in 2011 and repeating each year through 2030, Medicare will be struck by a double whammy, as twice as many Americans—four million a year— become eligible for Medicare and simultaneously stop contributing payroll taxes when they leave the workforce. The effect: a net gain of 20 million beneficiaries inadequately amortized by a dwindling worker-to-beneficiary ratio, which by 2030 will shrink to 2.3:1 from today’s 3.9:1.
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THE INEVITABLE, UNENVIABLE FIX
The equitable but politically challenging solution is one thus far barely whispered in Congressional cloakrooms—incre-mentally increasing the Medicare eligibility age to 67, as has already been done for Social Security. Rhetoric to the contrary, this would not be in violation of the “sacred trust” of Medicare in 1966. Back then, Americans were promised 14 years of Medicare coverage. Even with an increase to 67 years, they would still have at least 15 years of benefits. Social Security’s age eligibility precedent was set in 1983, when Congress passed legislation that, in 2003, began the slow incremental eligibility increase from age 65 to 67. For Medicare, we will probably not have the luxury of a full 20-year lead, but there is precious little time to lose.