The population of Medicare-eligible people began growing rapidly in 2011, when the first of the baby boomers (the generation born in the years 1946 through 1965) reached age 65 and became eligible for Medicare. By the year 2030, when the youngest boomers have reached age 65, Medicare enrollment will nearly double to an estimated 80 million.
Spending for Medicare totaled about 3.6% of the Gross Domestic Product (GDP) in 2010. The figure is projected to rise to 5.1% by the year 2030.
Even with Medicare, many older Americans face large out-of-pocket health care costs. First, most pay premiums for coverage under Part B and Part D of Medicare. Second, they may pay premiums to private Medigap plans or to Medicare Advantage plans to cover items not covered by traditional Medicare. Third, they must make direct payments to doctors, hospitals, and nursing homes for services not covered by their health insurance. The cost of health care has been rising much faster than both the general growth rate of the economy and the increase in Social Security benefits. If current trends continue, income after taxes and health care spending for the typical married couple will be no higher in 2030 than it was in 2000. (See Richard W. Johnson and Rudolph G. Penner, Will Health Care Costs Erode Retirement Security? Center for Retirement Research at Boston College, Issue in Brief No. 23, October 2004.)
For more information on the future of Medicare, see:
The official Medicare website is www.medicare.gov.