Expert Voices: How Lifetime Benefits and Contributions Point the Way Toward Reforming Our Senior Entitlement Programs

August 2011

Reforms to Medicare and Social Security will likely be debated over the next few months as the new “super committee” formed by the debt ceiling agreement works to develop its long-term deficit reduction plan. In this essay, Dr. Eugene Steuerle and Stephanie Rennane help to inform this debate by presenting findings from their newly updated analysis showing that seniors retiring today can expect to receive dramatically more in entitlement program benefits during retirement than they contributed to the programs while working. For example, the average Medicare beneficiary can expect $3 in benefits for every $1 paid in payroll taxes. The authors posit that the magnitude of the resources involved when viewing these programs in tandem over a lifetime gives policymakers new impetus and flexibility to develop coordinated entitlement reforms that promote a coherent, equitable and sustainable support system for current and future generations of seniors.
 

Other recent Expert Voices essays include:

• Anthony T. Lo Sasso, University of Illinois at Chicago, "Community Rating and Guaranteed Issue in the Individual Health Insurance Market" (January 2011)

• Mireille Jacobson, RAND, and Joseph P. Newhouse, Harvard University, “Expect the Unexpected? Physicians’ Responses to Payment Changes”  (November 2010)

• Austin Frakt, Department of Veterans Affairs and Boston University, “The Future of Health Care Costs: Hospital-Insurer Balance of Power” (November 2010)

• Robert Berenson, Urban Institute, “Out of Whack: Pricing Distortions in the Medicare Physician Fee Schedule” (September 2010)

• Maya MacGuineas, Committee for a Responsible Federal Budget and the New America Foundation, “Our Unsustainable Budget Situation” (May 2010)