The United States faces a considerable challenge in providing health care for its elderly and disabled residents in the coming years. For one, the looming retirement of the baby boom generation will substantially increase the number of Medicare beneficiaries.1 The percentage of the population covered by Medicare could increase from about 14 percent today to 22 percent in the year 2025.
In addition, the Medicare Hospital Insurance (Part A) Trust Fund, as currently structured, is projected to be exhausted after 2008. This fund is financed primarily through payroll taxes and pays for hospital and other institutional care. Experts predict that by 2020, without changes to the program, spending will exceed revenues by $200 billion.