(CNSNews.com) – Medicare faces an unfunded liability of $38.6 trillion, according to the Medicare Trustees report released Monday.
The unfunded liability is the amount that has been promised in benefits to people now alive that will not be funded by the tax revenue the system is expected to take in to pay for those benefits. (The Medicare Trustees calculate the unfunded liability for a period of 75 years into the future.)
The $38.6 trillion in unfunded benefits Medicare is expected to pay over the next 75 years equals $328,404.43 for each of the 117,538,000 households the Census Bureau said there were in the United States in 2010.“From the 75-year budget perspective, the present value of the additional resources that would be necessary to meet projected expenditures, at current-law levels for the three programs combined, is $38.6 trillion,” reads the report.
“To put this very large figure in perspective, it would represent 4.3 percent of the present value of projected GDP over the same period ($907 trillion),” states the Trustees report.
The extra money needed to fund the unfunded liabilities would have to come from something other than payroll taxes, benefit taxes, and premium payments scheduled under current law.
The report also says that there is “a significant likelihood” that the “projected HI and SMI expenditures are substantially understated as a result of potentially impracticable elements of current law.”