Health Costs Drive Spending on Seniors’ Entitlements
The cost of government-sponsored benefits for U.S. adults ages 65 and older increased to $27,289 in 2007 -- a 24% increase over the inflation rate since 2000, according to a USA Today analysis.
Medical costs were the primary cause of the increase, USA Today reports. For the analysis, USA Today examined a variety of government data to determine the cost of Social Security, medical benefits and long-term care for seniors. Social Security, Medicare and Medicaid funding for people other than seniors was not included in the analysis (Cauchon, USA Today, 2/14).
According to USA Today, the cost of Social Security, Medicare and Medicaid grew faster than the rates of enrollment in the programs and inflation. Seniors' benefits in 2007 cost $952.3 billion and accounted for 34.9% of the federal budget, the analysis found (USA Today, 2/14).
By contrast, the three programs in 2000 cost the federal government $601 billion (Cauchon, USA Today, 2/14). States contributed an additional $27 billion in 2007, mostly for Medicaid payments to nursing homes (USA Today, 2/14).
The analysis also found:
- Medicare experienced the greatest growth, and the Medicare prescription drug benefit accounts for about one-quarter of the increase;
- Long-term care costs for seniors have declined over the past three years as a result of a shift from nursing homes to less-costly home care; and
- The cost of senior benefits is equal to $10,673 for every nonsenior household (Cauchon, USA Today, 2/14).
According to USA Today, "The senior population boom -- combined with rising Social Security payments and medical costs -- is projected to cause the cost of senior benefits to accelerate at an unprecedented rate," with the government predicting Medicare costs to double in the next decade (USA Today, 2/14). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.