Like many soon-to-be seniors, you may be worrying that the Medicare Trust Fund will run out before you reach Medicare age. Your worry is realistic, but not for the right reasons.

First of all, the Medicare Trust Fund isn’t really a trust fund at all, because Medicare is funded on a cash-flow basis. If the government needs more to cover Medicare costs, it has to raise taxes or borrow the money. But you do have reason to worry because Medicare spending is on an unsustainable path. Adequately funding the program has been a political challenge almost since its inception. As it stands, Medicare can’t cover all promised benefits without either more revenue or reduced spending. And both sides of the political landscape proposed ways to solve that problem.

“An independent research report says that Medicare is paying out much more than it’s bringing in taxes, a situation that will only get worse as the baby boomers hit Medicare age,” says Michael Mahoney, vice president of, a company that counsels consumers about health insurance options. “In 2011 the Congressional Research Service said the fund, which technically is called the Medicare Hospital Insurance Fund, will run out of money by 2024. But there a lot of ‘what ifs’ in that calculation—including the fact that claims are getting bigger.”

Medicare faces the same problem as Social Security. As the over-65 population increases, there are more people collecting than paying in. There is general agreement that we’re spending too much money. Where people disagree is how to deal with these cost overruns.

The two candidates have proposed different ways of approaching this shortfall. President Obama’s Affordable Care Act, which the Republicans call Obamacare, mostly affects people under 65. However, to save money on Medicare, Obama is proposing cuts to Medicare Advantage, the private insurance plans that administer Medicare for 25 percent of the 49 million people enrolled in Medicare. Medicare Advantage plans were supposed to save money, but in fact they cost more per enrollee than Fee for Service (FFS), i.e. straight Medicare. The President is also proposing to cut payments to hospitals, which might cause hospital closings. Unfortunately, every report says the cuts aren’t good enough or fast enough to put Medicare in the black.

Romney’s approach is to put pressure on the consumer rather than paying money into the Medicare system and putting pressure on the doctors and hospitals to reduce costs. The word “voucher” has been used, but his strategy is to put a cap on what each individual can spend and leave it up to the health-care consumer to cut costs. The concern is that once that allowance is used up, there will be nothing left to cover serious conditions.

“But there are reasons to doubt that either approach will work,” says the Annenberg Public Policy Center. “Medicare’s chief actuary has warned repeatedly that Obama’s cuts to the future growth of payments to hospitals are too deep to be absorbed without adverse consequences. And [Vice Presidential candidate Paul] Ryan’s approach runs a risk of allowing insurance companies to siphon off younger, healthier seniors and burdening traditional Medicare with the rest.

There are other ways to save on Medicare spending, claims Mahoney. “Seventy-five billion a year in medical costs is due to fraudulent claims, a major chunk of which are Medicare claims. Medicare is set up to be taken advantage of because there aren’t enough incentives to save money. In the under-65 market there’s more incentive to identify fraud because the bills are being paid by private companies.”

It’s likely that one way or another the way we fund Medicare in the future will change. A system where you pay out more than you take in can’t survive forever. The only question is how, and how much, medical care for seniors will be affected by the change.