LOS ANGELES (CBS) - Federal health care spending is the single largest fiscal challenge over the long-run and Medicare, the government's social insurance program for people over 65 costs the most.
Forty-seven million Americans are on Medicare at a cost of $468 billion, about 13 percent of the federal budget.
Barbara Hayes is on Medicare and is dying of colon cancer.
"I could have six days or six months. I don't know," Hayes said.
Medicare was billed $155,000 for her recent chemotherapy.
"If I didn't have Medicare I'd be up a creek," Hayes said.
But Medicare is also up a creek. In the next ten years, as baby boomers age, 14 million more seniors will pour into the program. By 2020 Medicare spending is expected to be $1 trillion, two thirds of today's federal budget deficit.
"Essentially Medicare is the primary driver of all the fiscal issues we have in this country," USC Schaeffer Center for Health Policy and Economics professor, Dana Goldman said.
The deficit panel offers some tough choices.
First, people on Medicare will likely have to pay more. Right now, about 90 percent of beneficiaries pay virtually nothing for Medicare services. Under the panel's proposal everyone would pay at least a $500 deductible and up to $1,650 in out of pocket expenses each year.
"In this case by asking people to pay more they will use less services and that is what will cut costs," Goldman said.
Secondly, Medicare will no longer reimburse doctors and hospitals for patients who don't pay their out of pocket expenses. Health care providers will either have to go after the patient or eat the cost.
Accepting these two choices would save an estimated $133 billion by 2020 - nine percent of today's deficit.
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