Part 2 - Insolvency - Medicare – T-minus eight years
Bottom Line: In part one 1 chronicled the looming insolvency in Social Security. While it's not a pretty picture, it's unfortunately an optimistic outlook compared to the problems starring us in the face with Medicare. While Social Security's insolvency timeline is 16 years – we only have eight before stuff starts to hit the fan in Medicare. What's more is that we've seen an incredible deterioration in the solvency of Medicare of the past year. Not only are we a year closer on the calendar but this year's projected insolvency is 2026 compared to 2029 just last year.
The combination of rising healthcare costs, longer life expectancies and record numbers of Boomers signing on (let along potential fraud that's been extensive in recent years) has created a fairly dire situation. As of this report 9% of Medicare benefits to part A would have to be cut in the first year of insolvency. Parts B and D are funded from general revenue so they're unimpacted, but the writing is on the wall and it's now less than a decade away. Let's hope the political will for reform isn't.