Medicare is a health insurance program for seniors and specific disabled individuals. It has provided coverage for millions since it originated in 1965. However, the benefits it offers are far outweighed by its inefficiency and inadequacy, which cost trillions.

Medicare spending has grown exponentially since its creation under Lyndon B. Johnson. As of 2023, Medicare expenditures comprised 17% of the federal budget. The Congressional Budget Office projects Medicare's spending will rise to $1.6 trillion by 2032. The Medicare Hospital Insurance Trust Fund, which finances a large percentage of Medicare, is set to be depleted by 2028. This threat of insolvency has the potential to leave millions of seniors without adequate coverage.

The causes of these burgeoning costs have a common thread: government inefficiency. Medicare's fee-for-service model incentivizes quantity over quality—the program awards medical professionals for unnecessary procedures and artificially inflated costs. The American Medical Association approximates that 25% of Medicare spending, about $250 billion annually, is wasted on overtreatment, care administration inefficiencies, and excessive managerial costs.

Much of these administrative costs are due to the difficulty of complying with Medicare. A 2016 study showed that physicians spend an average of 785 hours per physician per year on Medicare regulatory compliance, costing an annual total of $15.4 billion.

These administrative complexities are due to the program's intricate rules and regulations which often need to be clarified for both beneficiaries and healthcare providers. This often results in significant delays in care and excessive unnecessary costs. Medicare's bureaucracy creates numerous obstacles for both physicians and patients which prevent seniors from getting the adequate care that they need.

This inefficiency is also passed on to seniors in the form of taxes and fees. Despite the common belief that Medicare is "free," it comes with numerous hidden costs. The 2021 standard monthly premium for Medicare Part B was $148.50, with recipients with higher incomes paying up to $504.90 every month. Since 2000, these premiums have increased by 226%, far outpacing inflation. Additionally, the Medicare payroll tax is set at 2.9%, with those earning over $200,000 facing an additional 0.9% tax.