One little-known provision of the law does attempt to address the cost issue, she added. "Starting in 2007, Part B will be much more related to income. The subsidy will start declining significantly for those with higher incomes. As the baby boomers begin to retire, some of them with higher incomes and assets, this is at least one opportunity" to help with the cost problem.
Americans are going to need to rethink the entire issue of retirement, Dr. Wilensky predicted.
"A couple of weeks ago, [Rep.] Bill Thomas [R-Calif.] talked about the need to think about Social Security and Medicare together. Both represent transfers from the working population to the dependent, nonworking population. To begin thinking about this as a joint issue may allow us to make more sensible decisions," Dr. Wilensky said.
For example, Americans should consider "how we can change both fiscal policies and cultural expectations so our whole concept of retirement begins to … reflect the increasing longevity and, for many individuals, the increased well-being and health status they have at age 65 relative to what 65 meant when Medicare was introduced in 1965," she said. "We need to think about fiscal policies to encourage continued labor force participation for people at 65 and 70."