What Are Unfunded Medicare Liabilities?
If you turn on the news you will see that some people are starting to discuss the tremendous unfunded liabilities of Medicare, that they prove that government programs typically cost much more than expected, and that they should be placed into the hands of private companies.
Recent statistics show that the Medicare program cannot continue in its current form and that major changes are needed to fix this government health insurance program. What are these unfunded liabilities, and how will they affect you?
Basically, the unfunded liability is the gap between the amount Medicare or Social Security are expecting to pay out and the amount they take in through taxes. The gap, or unfunded liability, is an estimate rather than a figure that is set in stone.
Many European government health insurance programs, such as Germany’s, have struggled for many years and can be thought of as being on the brink of bankruptcy. You know who is paying to keep them alive. The taxpayers.
Right now, Medicare and Social Security are said to have enough funds to cover their payouts, but because I don’t believe that US Treasury Bonds will sell well in the near future, I expect that the government is already printing money to pay for Medicare’s expenses. We have heard how the current administration does not expect to raise middle class taxes, but it will be the middle class who pays higher prices and other increased fees, which are just another form of taxes.
I would say that primarily China and possibly Germany will be Medicare’s lenders (somewhat amusing as Germany is said to be having difficulties with its own health care system), but because the Dollar is weak and disenchantment with America’s spending policies is rising, it will more than likely end up on the shoulders of America’s taxpayers.
So why is Medicare not sustainable? Some people actually say that Medicare was already bankrupt in’65, when it was introduced under Lyndon Johnson, while others expect to collapse within the next 10 years.
When George W. Bush signed the Medicare Modernization Act of 2003 into law in the name of “honoring the commitments of Medicare to all our seniors”, he might have not thought of the consequences of a society with more elder than young people. Plus he probably didn’t think that the economy would tank as much as it did over the last 6 or 7 years.
TopSeekInc helps health insurance brokers to display their expertise in videos: Ohio Medicare Insurance RX and Ohio Medicare Supplement Insurance RX