Posted on 12/31/2010 3:19:25 PM PST by Graybeard58
WASHINGTON — You paid your Medicare taxes all those years and think you deserve your money's worth: full benefits after you retire.
Nearly three out of five people say in a recent Associated Press-GfK poll that they paid into the system so their benefits shouldn't be cut.
But a newly updated financial analysis shows that what people paid into the system doesn't come close to covering the full value of the medical care they can expect to receive as retirees.
Consider an average-wage, two-earner couple together earning $89,000 a year. Upon retiring in 2011, they would have paid $114,000 in Medicare payroll taxes during their careers.
But they can expect to receive medical services — from prescriptions to hospital care — worth $355,000, or about three times what they put in.
The estimates by economists Eugene Steuerle and Stephanie Rennane of the Urban Institute think tank illustrate the huge disconnect between widely held perceptions and the numbers behind Medicare's shaky financing. Although Americans are worried about Medicare's long-term solvency, few realize the size of the gap.
"The fact that you put money into the system doesn't mean it's there waiting for you to collect," said Steuerle.
By comparison, Social Security taxes and expected benefits come closer to balancing out.
The same hypothetical couple retiring in 2011 will have paid $614,000 in Social Security taxes, and can expect to collect $555,000 in benefits. They will have paid about 10 percent more into the system than they're likely to get back.
Many workers may believe their Medicare payroll taxes are going for their own insurance after they retiree, but the money is actually used to pay the bills of seniors currently on the program.
That mistaken impression complicates the job for policymakers trying to build political support in coming months for dealing
(Excerpt) Read more at rep-am.com ...
OOPS - I meant - co=pay 20%
With the 50 yrs of PRE-PAYING and then the monthly deductible from social security checks, office visits and 20% copay - with the monthly deductible jumping up each year - We've paid what any one is paying on their plans.
And let's not forget, that all those years we - and the match from our employers - were pre-paying, we were also paying on a private plan for current insurance.
We really need to to write our reps - many of whom don't understand this - and are leading the charge with the pubic against our ‘free ride’ - and explain this all. We have not had/are not getting a ‘free ride.’
If we had been allowed to put that pre-pay into a system like Texas people can choose to -like Bush proposed, we'd be fine...because our money would not have been embezzled...and the compound interest would have been added, not stolen...AND any that we didn't use, we could leave to our kids.
No one has ever siad 'free ride' to MY face more than once.
>> Any analysis over 10 or more years that ignores the time value of money is a joke.
The tax is not set aside in investment funds, so there’s no growth.
Who is the buyer? China? No thanks. U.S. territory needs to remain in the hands of U.S. citizens. Perhaps an in-kind payment of acreage to U.S. citizens whose money has been stolen by the government. A few acres in Idaho would suit me fine.
Depends on the acreage, but of course “in kind sales” are certainly acceptable. It’s long overdue to protect our Western lands with private ownership and care.
Whether there is growth or not, there should be. (And isn't the "surplus" invested in a "lockbox" full of T-bonds?)
And another thing...it's the opportunity cost that counts, not what the gov't is doing with the money. If you fail to pay your taxes, the gov't will charge you penalties and INTEREST. You can't say that you don't want to pay the interest because you did not invest the money (and thus have growth) while you kept "their" money.
>> it’s the opportunity cost that counts
I understand that, but we’re talking about the real value of the “set aside”. Actually, the “set aside” is never set aside, but spent - so, there’s no real value to speak of.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.