A moving target: Financing medicare for the future

Since 1997, there has been a steady downward trend in projected Medicare sp ending as a shave of the gross domestic product (GDP), substantially improv ing the long-run outlook for Medicare. But even with improvements in outloo k, the required share of GDP will rise by mor-e than 70%, and the question remains as to who will pay for Medicare in the future. This report examines a limited set of tax options and a flat beneficiary premium to illustrate the size of contributions necessary to achieve several different goals, and to explore the difference that multiple years of projections can make on t hese requirements.