Affordable Care Act, Social Security and Medicare: Shifting Income from Young to Old

More than 25 percent of the U.S. population (including President Obama) was born between 1946 and 1964. U.S. society has made, and continues to make, economic promises to these baby boomers that must be ultimately shouldered by the nation's youth. Not only are the 25 percenters leaving the workforce at very high rates (consuming instead of producing), they are draining the U.S. Treasury via higher Social Security (SS) benefits and greater Medicare spending.

Over the past decade, SS outlays soared by 70 percent and Medicare expenditures rocketed by 135 percent, enlarging the nation's debt to $16.5 trillion. This debt, which is the largest in the galaxy and more than 100 percent of GDP, will ultimately be paid by the 60 percenters (those born after 1964) via higher taxes.

Furthermore, the Affordable Care Act (ACA) is charging higher insurance rates for the young and healthy to subsidize the insurance coverage for citizens born before 1965 who tend to be less healthy. For example, Forbes estimates a 27-year-old male will sustain an insurance premium increase of 30 percent more than that faced by individuals over 64.

The U.S. should take steps to reduce this mammoth wealth transfer from young to old by:
Raising the SS retirement age 2 months per year until reaching 70 years of age;

1. Increasing the Medicare eligibility age from 65 to 67;
2. Cutting the yearly SS inflation adjustment; and
3. Adjusting ACA premiums for age, or likely health care costs.

By slowing the growth in SS and Medicare spending and by reducing ACA subsidies for older Americans, the U.S. would avoid the stagnation and looming tax burdens for the nation's youth.


In 2012, 40 percent of U.S. males ages 18 to 31 lived with their parents. Federal spending policy should help junior exit the basement, not exile even more of our youth to the cellar.

Ernie Goss