Demographic issues in Medicare reform

This paper estimates the contribution of demographics to the Medicare financing dilemma. It suggests that delayed eligibility, by itself, cannot solve this problem. Although there is uncertainty regarding each component of demographic change, there is little hope that the future population distribution will save the program without other, more painful, measures. Methods used in the private sector, such as prefunding, have not been seriously applied to medical insurance but might provide part of the solution for long-run solvency.