Medicare is the nation's biggest buyer of health care, spending $550 billion last year to provide care for 48.7 million Americans. The problem is that the taxes paid by workers and employers to finance the program aren't covering the full cost, and the government since 2008 has been drawing off its trust fund to make up the difference.
Barring changes, the trust fund runs out in 12 years - 2024 - and the government would have to raise taxes or cut services. Social Security, which provides benefits for 55 million people, is in better financial shape, but the funds that support it are projected to run out in 2033, three years earlier than was predicted just last year.
President Barack Obama and Republican presidential nominee Mitt Romney offer vastly different approaches to putting both popular programs on sound financial footing. Both offer more details for Medicare than Social Security.
Here's what each of the candidates said they would do with Medicare:
* Use the Patient Protection and Affordable Care Act to transform, trim and sustain Medicare.
* Reduce projected annual payments to health care providers and Medicare Advantage plans.
* Impose new fees on drug companies, medical device makers and insurers. Improve prescription drug coverage and pay for free preventative care.
* Cut projected Medicare spending by $716 billion from 2013 to 2022. The savings would come mainly from lower annual payment increases for hospitals and other care providers, higher premiums for affluent beneficiaries and lower payments to Medicare Advantage plans, the private plans that provide Medicare benefits.
*Obamacare adds new revenue to Medicare from a 2014 payroll tax on high-income workers and new fees on drug companies, medical device makers and insurers - all industries that will see substantial new revenue when the law mandates millions of uninsured Americans to start buying insurance in 2014.
*Repeal the Patient Protection and Affordable Care Act.
*Replace the current Medicare system, starting in 2023, with a "voucher" or "premium support" payment plan. He’d let people use the voucher to purchase private coverage or traditional Medicare coverage.
*Wouldn’t affect current Medicare beneficiaries or those nearing retirement, only those who enter Medicare beginning in 2023. *Starting in 2023, he'd give government vouchers to people to buy their own insurance. The idea is that private insurance companies would compete for that business, providing more value and better quality while driving down prices. If their medical costs exceed the amount of their voucher, seniors would have to pay the difference regardless of whether they've chosen private insurance or traditional Medicare. The amount of the voucher would be equal to the cost of traditional Medicare in that area or the second least expensive private plan that offers benefits equivalent to Medicare, whichever is less.
* Beneficiary co-pays and premiums would rise under the voucher plan. Medicare's Hospital Insurance Trust Fund also would become insolvent eight years earlier - in 2016 instead of 2024 - if the Patient Protection and Affordable Care Act were repealed