As of 12:01am EST on January 1, 2011, the very first Baby Boomer reached age 65… and that means that the era of Baby Boomers receiving Medicare has officially commenced.
It is estimated that, during the period when Boomers are reaching age 65, between now and roughly 2030, the number of folks on the Medicare rolls will double. Presently there are approximately 40 million Medicare recipients, and that number is expected to be around 80 million in 20 years.
These incredible numbers will cause major challenges in funding the system – along with serious challenges in controlling the overall costs of healthcare during this period. The rate of increase in the over-65 population will cause dramatic changes in the healthcare system in terms of capacity, costs, and controls.
The new healthcare law passed earlier this year created an Independent Payment Advisory Board, which is supposed to provide guidance on how to control Medicare spending. This will have to be accompanied by system-wide strategies to bring down the costs of medical care.
The only alternative to reducing costs is to increase taxes, and we all know how bitter of a pill that is.
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Sterling Raskie, MSFS, CFP®, ChFC®
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