6 Jun 2016
Brief

A “Lifetime” Measure of Medicare’s Value (Brief 3 of 4)

Marilyn Moon and Jing Guo

Although Medicare was established as a “pay as you go” program—with current taxpayers contributing to pay for the costs of current beneficiaries—many observers of Medicare question what individuals pay over their lifetimes compared to what they receive in benefits. Some have gone so far as to equate program “affordability” with having each cohort of individuals pay for itself through its tax contributions.

This brief takes a critical look at this line of reasoning and generates a lifetime measure of contributions and benefits. The authors' measure differs in several ways from most approaches to what Medicare beneficiaries pay versus what they get. Two changes to the benefit side in particular are crucial—and result in quite different findings than are reported elsewhere. (The methodology, described briefly in this brief, and assumptions behind the analysis, are spelled out in greater detail in a forthcoming paper.)

Related Work

6 Jun 2016
Brief

Measures of Medicare's Finances Reconsidered: Introduction to the Series

The debate over Medicare’s future takes many forms. At its most basic, the issue is whether we can (or want to) afford Medicare. This series of issue briefs addresses key questions concerning the future of Medicare and how that will affect taxpayers and beneficiaries over time.
6 Jun 2016
Commentary

Is Medicare Really Unaffordable?

Each year when Medicare’s Trustees report comes out, as it will soon, pundits and politicians fixate on the projection of when Medicare funding will be eclipsed by Medicare spending. But, Marilyn Moon asks, don’t we also need to know who pays for Medicare? What the taxpayer burden is and how much program participants pay? Whether we can afford Medicare as the U.S. population ages?
6 Jun 2016
Brief

Who Pays for Medicare? (Brief 1 of 4)

In the debate over Medicare’s future, one key question that’s nearly always at least implicit when reform comes up is who should pay. More specifically, how should the burden be split between taxpayers and beneficiaries? This brief examines how the burden is distributed and will shift over time.
6 Jun 2016
Brief

How Much Will Medicare Costs Affect Taxpayers Over Time? (Brief 2 of 4)

A major justification for reforms to reduce Medicare benefits surrounds the claim that the program will be unaffordable in the future and will overburden taxpayers. But many such arguments aren’t based on facts or more than minimal amounts of analysis of these claims. This brief takes a comprehensive look at the likely levels of burden that Medicare will impose on taxpayers in relation to their projected ability to afford them.
6 Jun 2016
Brief

Can We Afford Medicare? (Brief 4 of 4)

Measuring the contribution that Medicare and Social Security make to seniors is central to the debate over entitlement reforms. Understanding the role that these programs play is essential to understanding the impacts of various reform proposals. This brief explores issues related to the question of whether or not we can afford Medicare.

Further Reading