What is the Future of Medicare?

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With baby boomers aging, many people are questioning the feasibility and future of Medicare. The estimated number of people who rely on its programs is predicted to reach 80 million by 2030. By 2027, the spending on Medicare will be over $1.2 trillion. Nevertheless, the federal health insurance program is underfunded, and the the aging population will continue to pressure an already fragile system.

Policy makers have been reluctant to make any major overhauls to the program because of political ramifications. However, the problem is set to get worse and Washington needs innovative ideas to resolve the issue. With the growing demand and public pressure, what is the future of Medicare? If the program is to have a future, reform is needed, and it will take courageous individuals from both political parties to set aside differences and consider long-term and feasible solutions.


Currently, individuals older than 65, people with certain disabilities, and those with end-stage renal disease qualify for Medicare. One proposal that politicians are negotiating is to raise the age of eligibility to 67 years. Although this makes sense given the increase in life expectancy since the creation of the program in 1965, such proposals have been political suicide because of partisan politics. However, the program was created for the purpose of serving retired Americans. As people live longer, the program’s liquidity suffers given prolonged coverage. In 1965, American men and women had a life expectancy of roughly 67 years and 74 years, respectively. Today, the age is 76 for men and 81 for women. Therefore, the proposal to increase the age of eligibility makes numerical sense. Along with other proposals, slowly increasing the age of eligibility to 67 can help save the program.

Medicare premiums

According to the nonprofit and nonpartisan American Association of Retired Persons (AARP), Medicare recipients pay a separate premium that covers visits to the doctor and prescriptions drugs. These payments cover roughly a quarter of the actual cost of the service. For individuals with higher income, the premiums are higher and up to three times that of the standard premium cost. Some ideas to overhaul the program target these individuals, where the proposal includes increasing premiums by up to 15 percent.

Fiscally, the proposal makes sense as the program’s liquidity is the foundational problem and raising rates will improve finances. However, higher income individuals already pay more into the program before retirement and will face additional costs while receiving benefits. This may be hard to sell with today’s political landscape and people in a higher tax bracket may consider this an unwanted tax increase. This can be a difficult perception to overcome and can produce a backlash among constituents.

The future

The survival of the program is indispensable for those in retirement, and if nothing is done, the future of Medicare is bleak. The program will not have the liquidity necessary to support the rising population of elderly individuals. Although many take political positions, the program should not be a partisan discussion — instead, voters and politicians should work together in a fiscally responsible way that reviews innovative ideas to fund and maintain coverage without creating scenarios where such proposals cause political death. Once that sort of discourse is in place, ideas have a chance to evolve into feasible implementations that can benefit all retiring Americans. In the meantime, retired or retiring individuals can review information on Medicare Annual Enrollment to check for the best coverage options. Hopefully, politicians and voters can develop a collaborative attitude that proactively looks for solutions and allows such services to continue.

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