According to a US government forecast, Medicare’s financial troubles have worsened so much over the last year that the whole system will be broke in a little over a decade from now.

The Medicare system is a federal fund that finances hospital care for America’s elderly and disabled (see explanation below).

According to the trustees, which include three Bush Cabinet secretaries, the system will completely run out of money in 2018. Mainly because hospital costs were much higher than expected last year. In 2005 it was predicted the system would run out of money in 2020. When President Bush came into office it was predicted that Medicare would run out of money by about 2030. At this rate, who knows what the predictions are going to be next year, or the year after that.

The trustees also predicted the Social Security financial situation will be such that general benefits to retirees will become a problem to finance in 2040.

President Bush said the system is going broke and something needs to be done about it. John Snow, Treasury Secretary, and also one of the Trustees, said the Medicare system faces a financial crisis as baby boomers move into retirement.

What is Medicare?

Medicare is a program, funded by the US Federal Government, which provides health care cover for people over 65 and also people who have a disability – regardless of income. It is divided into three parts: Part A, Part B and Part D.

Medicare Part A

This covers inpatient hospital care, skilled nursing facility care, home health care and hospice care.

Medical Part B

Covers medical services, such as doctors’ services, laboratory and x-ray, durable medical equipment, ambulance, outpatient hospital care, blood and medical supplies.

Medicare Part D

This is aimed at helping beneficiaries get their prescriptions at lower prices. It is only available through Medicare private drug plans or Medicare private health plans.

Who is Entitled to Medicare Coverage?

For both options below, you must either be a US citizen, or have been a legal resident for at least 5 consecutive years.

— You must be at least 65 five years old.
or
— If under 65, you must be disabled and have had Social Security for 2 years or more

Link to more information on ?What is Medicare?’

Written by: Christian Nordqvist
Editor: Medical News Today