Medicare is going insolvent in about 13 years....

[n2doc]

by Tim Fernholz



Chalk it up to the perils of projection: Today we learn that Medicare, the US public health insurance program for seniors, will exhaust its trust fund in 2026, thirteen years from now. When the trust fund runs out, the program will need to either reduce benefits, raise taxes, or borrow more money to meet its obligations. It’s, um, one of the most important decisions legislators need to make about reducing US public debt. And it feels like thirteen years is just around the corner, right? Maybe, but as Sean West notes, Medicare projections (pdf) have a long history of ups and downs. The graph above shows how forecasts of Medicare insolvency have evolved over time (note: a value of zero doesn’t indicate a doomsday prediction; it merely means there was no specific forecast in that year).

The average prediction of Medicare’s insolvency is eleven years. Note, too, that the forecasts track recessions. In times of trouble, tax revenues dip and predicted usage of the program goes up, depleting the fund. Conversely, when the economy is booming, more revenue is predicted to come in, and less healthcare is predicted to go out. This year, we’re seeing a slight increase in the program’s longevity, for several reasons: 1) the mild recovery, 2) the 2010 health care reform law, which cut hundreds of billions in Medicare spending, 3) budget cuts agreed to in 2011 and 4) an expectation of slower growth in health care costs. Of course, America’s health care system or public finances still need more work, but hey, it’s a start.

http://qz.com/89971/medicare-is-going-to-run-out-of-money-in-about-a-decade-but-thats-what-they-always-say/

Just like social security going 'bankrupt' , it is always going to happen, except when it doesn't.

[roamer65]

1. Not if we remove that stupid cap on FICA tax withholding.

Every ounce of ones income should be subject to the FICA tax, not just the first $112,000 or whatever the cap is nowadays.

[n2doc]

2. The point is, they are always predicting this, and it never happens. n/t

[Yo_Mama]

4. There IS no Medicare wage cap

None, zip, nada. Hasn't been for years.

All wages are subject to the Medicare tax, and there's a surcharge now for really high incomes. It's still going BK, and it really is.

[Nye Bevan]

6. There *is* no cap on the Medicare tax witholding.

Employees pay a Medicare tax of 1.45% on all income, period, with no cap.

And beginning this year, the rich (income of more than $200,000 individual or $250,000 married filing jointly) pay an additional 0.9% on income above that level.

[roamer65]

7. Then I stand corrected and am happy to hear it.

But there is a cap on social security withholding that still needs to be removed.

[onehandle]

5. The sooner the social safety net is eliminated, the sooner the one percent will be eliminated.