The Growing Cost of Aging in America: Medicare and Social Security
Medicare1
Medicare is a federal health insurance program for people who are:
- 65 or older
- Younger than age 65 with certain disabilities
In 2016, national health expenditures on Medicare totaled $672,100,000,0002
49.8 million
Number of people 65+ receiving Medicare in 20173
Social Security
“Social Security replaces about 40 percent of an average wage earner’s income after retiring, and most financial advisers say retirees will need 70 percent or more of preretirement earnings to live comfortably.” – Social Security Administration4
Social Security helps:
- Older Americans
- Workers who become disables
- Families in which a spouse or parent dies
What is the Old-Age and Survivors Insurance Trust Fund?
This type of trust fund is set up by the U.S. Treasury where a portion of taxes is put away to pay for the monthly benefits of retired workers, their families and survivors of deceased insured workers. This fund ensures that families receive their benefits automatically and the Social Security Administration doesn’t need to request money from Congress to pay for the benefits.5
Recipients of Social Security6
| Year | Total Number of Social Security Beneficiaries receiving Benefits | Total Number of Social Security Beneficiaries receiving benefits from Old-Age and Survivors Insurance |
|---|---|---|
1970 | 25,700,924 | 23,035,295 |
1980 | 35,526,086 | 30,843,914 |
1990 | 39,824,692 | 35,558,711 |
2000 | 45,414,705 | 38,741,343 |
2010 | 54,032,097 | 43,846,211 |
2016 | 60,907,307 | 50,297,237 |
Medicare and Social Security as Part of Federal Budget7
Of the $3.95 Trillion in Fiscal 2016 Estimated Spending:
Medicare = 15%
Social Security = 24%
Budget for Social Security Compared With Medicare
According to the Congressional Research Service, “Mandatory spending is composed of budget outlays controlled by laws other than appropriation acts, including federal spending on entitlement programs.”8 Programs like Medicare and Social Security constitute the majority of mandatory spending.
| Year | Social Security9 | Medicare |
|---|---|---|
1970 | 29,600,000,000 | 6,800,000,000 |
1980 | 117,100,000,000 | 34,000,000,000 |
1990 | 246,500,000,000 | 107,000,000,000 |
2000 | 406,000,000,000 | 216,000,000,000 |
2010 | 700,800,000,000 | 520,500,000,000 |
2016 | 910,300,000,000 | 691,600,000,000 |
1 https://www.medicare.gov/sign-up-change-plans/decide-how-to-get-medicare/whats-medicare/what-is-medicare.html ↑
2 https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/CMS-Fast-Facts/index.html Fast Facts p. 11 ↑
3 https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/CMS-Fast-Facts/index.html p. 1 ↑
4 https://www.ssa.gov/pubs/EN-05-10024.pdf ↑
5 https://www.ssa.gov/oact/progdata/describeoasi.html ↑
6 https://www.ssa.gov/oact/STATS/OASDIbenies.html ↑
7 http://www.pewresearch.org/fact-tank/2017/04/04/what-does-the-federal-government-spend-your-tax-dollars-on-social-insurance-programs-mostly/ ↑
8 https://fas.org/sgp/crs/misc/RL33074.pdf ↑
9 https://www.cbo.gov/about/products/budget-economic-data#2 ↑