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Medicare Benefits

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Medicare is an important source of support for elderly Americans. Under current reimbursement rules, the actuarial present value of future Medicare benefits for middle-aged people is $26,100 for males and $27,300 for females. The actuarial present value increases markedly for people nearing retirement: $53,300 for 65-year-old males and $53,700 for 65-year-old females. (Females have larger present values than males because their mortality rates are lower.) Those who are even older will receive less in actuarial present value of benefits because they have fewer years to live and a higher probability of death. For middle-aged people, Medicare benefits average just under 30% of all transfers; for the oldest retirees, the share increases to just under 35%.

Suggested citation: “Medicare Benefits,” Federal Reserve Bank of Cleveland, Economic Trends, no. 98-08, pp. 13, 08.01.1998.

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