• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Chart of the Week: Medicare Spending Is the Largest Driver of Future Deficits

    Medicare is in dire need of reform. This week’s chart illustrates why the entitlement program is the largest driver of long-term runaway deficits. With the country’s population aging and increasingly dependent on health care, Medicare’s cost to taxpayers is projected to rise from $522.8 billion in 2010 to $932 billion in 2020.

    The Heritage Foundation has long championed reforms for Medicare, most recently as part of Saving the American Dream. Heritage’s Bob Moffit recently outlined a two-stage approach to reform. The first step is saving the current program, then moving to premium support for Medicare, which is a variant of the defined-contribution system.

    The issue is also getting more attention on Capitol Hill. Just this month Rep. Paul Ryan (R-WI) and Sen. Ron Wyden (D-OR) introduced a bipartisan framework for structural Medicare reform. Their plan “would establish a premium-support system of financing for Medicare,” wrote Moffit and Rea Hederman on The Foundry. “This policy is central to the transformation of Medicare into a consumer-based system relying on competition rather than bureaucratic fiat.”

    Ryan, of course, already tried to transform Medicare earlier this year as part of his budget proposal. It created such an uproar among Democrats that their assertions were dubbed the “Lie of the Year” by Politifact and one of the “biggest Pinocchios of 2011” by fact checker Glenn Kessler of the Washington Post.

    There isn’t anything false or misleading about Heritage’s chart. The numbers come directly from the Congressional Budget Office. And unless something is done, Medicare will be the biggest driver of future deficits.

    Posted in Featured, Scribe [slideshow_deploy]

    8 Responses to Chart of the Week: Medicare Spending Is the Largest Driver of Future Deficits

    1. Carla says:

      War is the big deficit we're passing down, people dead and money spent for nothing.

      • Bill says:

        War is not even close to the biggest deficit we are passing down. Do some research and you'll find the amount spent on current conflicts is very little as compared to entitlement programs, etc In addition, conflicts will end and our our of control entitlement spending will not unless we do something. Lastly, although loss of life is always tragic do not say it is a waste to serve and defend your country. We face a very real threat that many want to turn a blind eye to. The folks we lost overseas were defending our country. We must be ever vigilant in preserving our freedoms or you'll be seeing the fighting in your back yard. I spent 22 years serving my country and served 2 years in the middle east, one of those as an advisor. People have no idea of the threat we face. Let's keep our eye on the ball when it comes to spending and deficits…The DoD isn't it. "Providing for the Common Defense" is one of the first maxims of government.

    2. Sam says:

      Everything but cutting out the waste, fraud and incompetence of the agency itself. There are so many stories of Medicare paying and not even knowing what is going on. Let's make all kinds of worthless reforms without paying attention to the actual problems of waste, incompetence and fraud. So typical.

    3. j cox says:

      I have and ALWAYS will have a problem with calling medicare an "Entitlement" program!!!! When in the name of everything will IT stop? Medicaid is an "entitlement program"!!!! I have paid into this blackhole for 30 years now, and will gladly take it ALL back…

      • Mike, Wichita Falls says:

        I guess it's called an entitlement because along with SS those Medicare deductions are called taxes not contributions even though they are supposed to go into "trust" funds. We're told so, but there's no guarantee you'll get it back. If you're older, you're at the mercy of Uncle Sam. If you're younger, you still have time to invest in your own separate, private account.

        Remember that these projections, as dire as they appear, are without doc fixes which Congress keeps enacting as they just did again with this 11th hour, two-month extension. I know CBO can only do what it's told, no matter how glaring reality is, but how much worse would these projections be with doc fixes? Past Congresses project these cuts into these great new programs to keep future costs low but later Congresses delay the cuts because it's political suicide to allow them to go into effect.

        Of course, if Congress had always followed the Constitution, none of these programs would be in place to create these dire financial times and political weapons.

    4. Leon Lundquist says:

      I would like to see the complete Deregulation Of Medicine! This Over Regulation has gone far enough, it is a bottomless pit to Practice Defensive Medicine! All the money in the world won't fill that regulatory created hole. We had the Over Regulation Of Medicine already! The cost of Medicine went over the Moon! Now, with Obama Care we have Super Over Regulation, where the cost of Regulation absorbs more money than the Medicine itself! Abolish the Department Of Human Services! Get the Feds entirely out of Medicine! So then, in the end the problem of Medicaid is the problem of Medicine itself! It has been forced by government to cost too much! The cost will destroy us all in Bankruptcy!

    5. Bobbie says:

      medicare spending is the biggest cause of future deficits because the government with their unconstitutional power and control has come to only run on corrupting inside and out, all government run programs. the government uses public tax dollars to discriminate, hold bias, favoritism and racism? that is 100 percent characteristic of American leadership? everything America doesn't stand for using other peoples' money that doesn't condone this governance! the high wastes of expense is too much government and their low quality, unconstitutional services.

    6. Ron W. Smith says:

      It's a bit too obvious that Medicare needs attention to avert future fiscal insolvency. The fixes involve making it more efficient in uncovering (AND prosecuting severely) fraud and abuse, tackling the end-of-life expense the program is saddled with and which private insurers would consider reason for coverage denial, and, yes, upping premiums based on ability to pay. What the fixes should not involve is privatization since we're already seeeing what that results in–costs twice the international average for coverage of people younger than Medicare age–or vouchers or reduced benefits for those not in end-of-life category or medical "accounts" to be drawn upon since all have shown huge weakness in every way except to get the monkey off the back of the federal government.
      The time for schemes is over. The time for REAL national dialogue–open discussion and debate across the country–is at hand. In fact, it's been at hand for a while. Let's begin.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.