What Are The Unfunded Liabilities of Medicare?

By John Harvey

If you turn on the news you will notice that some people start to talk about massive unfunded liabilities of Medicare and that these liabilities show that government programs usually cost a lot more than expected and therefore should be put into the hands of private companies.

According to recent statistics the Medicare system is it's present form unsustainable and that there have to be major changes to fix this government health insurance program. So what are these unfunded liabilities and how will they affect you.

The unfunded liability is basically the gap between what Medicare or Social Security takes in through taxes and the amount they are expecting to payout, It's just a projection, not something 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.

Medicare and Social Security supposedly have sufficient funds to cover their current expenditures, but I would guess that the government is already printing money to pay Medicare's bills because I don't believe that US Treasury Bonds will sell well in the immediate future. Although we hear that the current administration does not anticipate raising taxes on the middle class, it will be the middle class who will see higher taxes in the form of higher prices and other higher fees and charges.

As who will be the lenders for Medicare. I would say primarily China, maybe Germany (which is funny because Germany is supposedly struggling with it's own health care system), but because of the weakness of the Dollar and the rising disenchantment with Americas spending policies it will probably end up on the shoulders of the American tax payer.

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 the Medicare Modernization Act of 2003 was signed into law by George W. Bush, it was in the name of "honoring the commitments of Medicare to all our seniors," but he might not have realized the consequences for a society which has more elderly people than young. He also probably did not expect that the economy would collapse the way that it has over the last six or seven years. - 23211

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Two Ohio Health Insurance videos from TopSeekInc: Ohio Medicare Insurance RX and Ohio Medicare Supplement Insurance RX