Medicare is gravely ill but getting short shrift

WASHINGTON — A looming Medicare shortage is seven times the size of the one that Social Security faces and nearly four times the entire federal debt. It is not being addressed by President Bush and Congress, and, to some, that is just as well.

Social Security, which Bush has hoisted atop his domestic agenda, is $3.7 trillion short of what it will need for benefits over the next 75 years, under the latest federal projections. Medicare, the health-care program for the elderly, must find an estimated $27.8 trillion.

By 2018, Social Security is on track to start paying more annually to recipients than it collects in payroll taxes — an ominous tipping point that Medicare reached last year.

While Social Security is expected to exhaust its reserves in 2042, Medicare should deplete the trust fund financing its hospital benefits in 2019, the latest forecasts show.

Medicare's problems are full of political and technical complexities that are thornier than those confronting Social Security.

That makes it a daunting mix the White House would rather tackle later.

"Once we modernize and save Social Security for a young generation of Americans, then it will be time to deal with the unfunded liabilities in Medicare," Bush told reporters last month.

Social Security supports 47 million people, most of whom are elderly and disabled. It is the largest federal program at $517 billion this year.

Medicare, costing $325 billion, provides health insurance to 42 million old and disabled people.

Though Medicare is smaller today, the government and public trustees who oversee both programs projected last year that Medicare's costs would overtake Social Security's by 2024 and nearly double them by 2078.

Helping make Social Security the current priority for the president and fellow Republicans is its relatively clear problems and potential solutions. It faces a crunch from the retirement of baby boomers starting later this decade. It either will need more money from the 12.4 percent payroll tax that workers and their employers split, or cuts in benefits, or extra federal borrowing.

Medicare faces the same demographic tidal wave — plus the added costs and complications of health care. Progress in medicine and medical technology are helping increase health-care costs by about 7 percent a year — more than double general inflation.