Medicare For All proponents have thus far failed to come up with a plan to fund the $30 trillion (over ten years) in taxes their proposal requires. Before expanding Medicare, they should note that the current Medicare system already faces a $44 trillion shortfall over 30 years. Specifically, Medicare is projected by CBO to collect $17 trillion in payroll taxes, and spend $61 trillion in benefits (net of senior premiums paid). The federal borrowing necessary to cover these shortfalls will add $28 trillion in interest costs over these three decades. By the end of this time period, Medicare will be running an annual shortfall of 8.6% of GDP (including interest costs). Perhaps advocates should try to pay for Medicare’s current commitments before adding $30 trillion per-decade in additional costs.
Brian Riedl is a senior fellow at the Manhattan Institute. Follow him on Twitter @Brian_Riedl.
Interested in real economic insights? Want to stay ahead of the competition? Each weekday morning, e21 delivers a short email that includes e21 exclusive commentaries and the latest market news and updates from Washington. Sign up for the e21 Morning eBrief.
Photo by Win McNamee/Getty Images