Medicare Facing Future Bankruptcy: IEEE-USA Today’s Engineer Online Cites
$30 Trillion Unfunded Liability

WASHINGTON (29 December 2006) -- Because of rising healthcare costs,
advancing technology, and an aging U.S. population, predicting future
Medicare spending is difficult. In 2005, the unfunded liability for
Medicare was projected to be close to $30 trillion, according to the
current issue of IEEE-USA Today’s Engineer Online.

“How well we deal with the funding issue will affect the extent to which we
push costs forward to future generations,” Today’s Engineer author George
McClure writes in “Fixing Medicare: An Intergenerational Dilemma.”

Medicare is a federal health insurance program for people 65 and older,
disabled people under 65 and those with end-stage renal disease.
Three-quarters of Medicare costs are covered by the program; the remainder
by recipients.

With the expected growth in those eligible for benefits and the uncertainty
of future healthcare costs, Medicare Part A, which covers hospital
services, is expected to run out of money by 2018. The prescription drug
program (Medicare Part D) is also unfunded. To prevent the projected
shortfall, some combination of cutting benefits, raising premiums or
increasing the payroll tax will have to implemented, according to Today’s
Engineer.

“The earlier that actions are taken to avert the looming crisis, the easier
those actions will be,” McClure writes. “But the politics are daunting.”