The Swine Line

USA Today article on the cost of benefits to senior citizens

Senior benefit costs up 24%

The cost of government benefits for seniors soared to a record $27,289 per senior in 2007, according to a USA TODAY analysis.

That’s a 24% increase above the inflation rate since 2000. Medical costs are the biggest reason. Last year, for the first time, health care and nursing homes cost the government more than Social Security payments for seniors age 65 and older. The average Social Security benefit per senior in 2007 was $13,184.
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The federal government spent $952 billion in 2007 on elderly benefits, up from $601 billion in 2000. It’s the biggest function of the federal government. States chipped in $27 billion more in 2007, mostly for nursing homes.

All three major senior programs � Social Security, Medicare and Medicaid � experienced dramatically escalating costs that outstripped inflation and the growth in the senior population.

Benefits per senior are soaring at a time when the senior population is not. The portion of the U.S. population ages 65 and older has been constant at 12% since 2000.

The senior boom, however, starts big time in 2011, when the first baby boomers � 79 million people born between 1946 and 1964 � turn 65 and qualify for Medicare health insurance. The oldest baby boomers turn 62 this year and qualify for Social Security at reduced benefits.
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Findings include:

•Medicare experienced the most explosive growth from 2000 to 2007. The Medicare prescription-drug benefit, started in 2006, accounts for about one-fourth of the increase in Medicare, which provides health benefits for people 65 and older.

•Long-term care costs per senior have declined slightly in the past three years because of a move away from nursing homes to less expensive home care.

•The cost of senior benefits is equal to $10,673 for every non-senior household.

•About 35% of the federal budget is spent on senior benefits, up from 32% in 2004.
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Economist Dean Baker calls it “granny bashing” to focus on the cost of senior benefits. The elderly paid a designated tax for Social Security and Medicare taxes during their decades of working to support these programs when they retired, says Baker, co-director of the liberal Center for Economic Policy and Research.

It’s not “granny bashing” to be concerned about the exploding cost of seniors.  Mr. Baker doesn’t seem to realize that the taxes the current elderly paid when they were working are not being returned to them now that they are retired.  (If that were the case, we wouldn’t have as big a problem, which is why we need the option for private accounts, by the way.)  When the current elderly were younger, they were supporting their elders.  Just as today’s youth is supporting the current elderly.  The problem is that the youngest generation can not expect to receive the same benefits when they grow older because the proportion of workers to retirees is getting smaller.  Entitlement spending is out of control and headed for bankruptcy.