Correct. The generational imbalance of Medicare over the 75 year window is……frighteningly high.
Here’s a quote from the study that Gokhale and Smetters did for Paul O’Neill back in 2002, where they got the same result that Alice Rivlin got when she went through the exercise in 1993–4 for Bill Clinton. (Keep in mind that this was done BEFORE (a) Medicare Part D was passed, and (b) the meltdown made things worse, and (c ) before the ACA made things worse.)
Emphases in this typeface are mine.
We estimate that an additional 16.6 percent of annual (uncapped) payrolls would have to be taxed away forever beginning today to achieve long-term fiscal sustainability — implying a greater than doubling of the current payroll tax rate of 15.3 percent that is currently paid in equal shares by employees and employers to the Social Security and Medicare systems.
Alternatively, income tax revenues would have to be hiked permanently by another two-thirds beginning immediately — increasing their share in gross domestic product (GDP) from 9.5 percent to 15.9 percent.
Other (equally drastic) alternatives would be to cut Social Security and Medicare benefits by 45 percent immediately and forever, or permanently eliminate all future federal discretionary spending — although the latter policy still falls short by about $1.8 trillion.
Moreover, the size of the necessary corrective policies will grow larger the longer their adoption is postponed. For example, waiting until just 2008 before initiating corrective policies would require a permanent increase in wage taxes by 18.2 percentage points, rather than 16.6 percentage points if we began today.
Anyone who suggests that we just extend Medicare to all has, as a prerequisite for the statement, assumed that the current system is sustainable as is. This is so far divorced from reality that the politician suggesting it should not just be ignored, but forever shunned.