Despite the government’s promises to maintain “Medicare as we know it,” the program is already changing. In addition to reduced funding and complex new regulations, Medicare faces enormous demographic shifts: The first wave of the massive baby boom generation is now eligible for Medicare enrollment. Current taxpayers already pay almost nine out of every 10 dollars in total Medicare costs in any given year, and general revenues will account for an increasingly larger share of Medicare spending. The best solution is structural Medicare reform based on a defined-contribution (“premium support”) program of financing, and gradually increasing the eligibility age. Competition among plans and providers, driven by personal choice, will not only secure better value for Medicare dollars, but will also reduce the growth in Medicare spending.