Do you want to save Medicare?

Power Line Blog ^ | 4/6/12

[dewawi]

I don’t, actually. I think Medicare was Congress’s great blunder of the 20th century. I think the program will continue bleeding money until it bankrupts the United States of America and destroys our economy, in roughly 15 years. And it will be popular right up to the end, as long as people perceive that they are getting something for nothing, or–same thing–a lot for very little. So in my view, Medicare should be phased out and replaced by a system where everyone can save for his or her old-age medical expenses in tax-deferred accounts. Which, of course, we already have.

But if you do want to save Medicare, there is only one proposal on the floor to do so. It is the Ryan budget that was adopted by the House of Representatives. As things now stand, it is either the Ryan plan or no more Medicare.

[sodpoodle]

****And it will be popular right up to the end, as long as people perceive that they are getting something for nothing, or–same thing–a lot for very little.****

Medicare is NOT popular - it is mandatory. Workers and employers are forced to pay into SS & Medicare.

Upon retirement - seniors are required to pay premiums for Parts B & D ($150 per month). In addition they feel compelled to purchase Medigap coverage or pay the Medicare deductibles and co-insurance.

Millions of healthy Medicare participants are not costing the program: others get an array of items and services which are not truly “illness or injury” related.

Most of the outrageous cost of Medicare is due to Government bureaucracy - shuffling records - not treating patients.

[KeyLargo]

Ron Paul

Argues that Medicare and other entitlement programs create undesirable dependence on the government, worsening the nation’s financial woes.
Views the Medicare’s Part D prescription drug program as an unwarranted expansion of the government’s role in health care and a “reminder that the GOP sometimes can’t resist the temptation of big government.”
Didn’t take part in Medicare when he practiced medicine; offered low-cost or free care to those who couldn’t afford his services.
Proposes redirecting resources from defense spending and foreign aid to fund Medicare for those already enrolled, while weaning younger people away from such assistance programs in favor of free market approaches.

“Why exactly should Americans be required, by force of taxation, to fund retirement or medical care for senior citizens, especially senior citizens who are comfortable financially? And if taxpayers provide retirement and health care benefits to some older Americans who are less well off, can’t we just call it welfare instead of maintaining the charade about ‘insurance’ and ‘trust funds’?” — Texas Straight Talk weekly address, Nov. 2010

http://www.kaiserhealthnews.org/stories/2011/august/26/gop-candidate-health-care-platforms.aspx

[silverleaf]

correct, MEDICARE is not “something for nothing”

many paid MEDICARE/SS payroll tax all working life, as did employers

At 65 military retirees forced to enroll in MEDICARE A/B or no access to “free for life” military healthcare

Must now pay several thousand in premiums regardless of whether seek any healthcare

MEDICARE is linked to SS, no opt out, can't get just one, must be in both

Plus- still working and still paying payroll tax

MEDICARE is not “something for nothing”

[duckman]

Before Medicare is ‘killed’, I would like to see all the Medicare/Soc fraud cleaned up. According to this admin and previous admins, Medicare and Soc fraud is in the billions. IMO

[X-spurt]

Medicare is sure not a freeby the writer infers. As you say we were required to pay into the Medicare system right along with SS. When you get ready to draw back some all the money taken through the years, you must sign up for Medicare A or get no SS.

Don’t think you are correct on the mandatory-ness Parts B and D. It makes good economic sense to pay them $30 something a month for Part B and to add on private Medigap, but Part D am pretty sure is not required. Part D is for perscription meds, if you use a lot then Part D makes sense, if only a rare occassion perscription it does not.

The gubnint exceeds the costs by entitling many who did not pay in onto Medicare A and tying it in with that damn Medicaid freeby.

Medicare would be more fiscally sound if they simply let you purchase your own private insurance with the money you paid in all the years, but then they would not have access to all that money.

[kabar]

Most of the outrageous cost of Medicare is due to Government bureaucracy - shuffling records - not treating patients.

Medicare is unsustainable because people get three times more out of it than they paid into the system. Moreover, 75% of the costs of Medicare Parts B and D are paid by the General Fund. The premiums only cover 25% of the costs. With 10,000 people a day retiring for the next 20 years, Medicare is simply unsustainable actuarily. Like SS, it is a Ponzi scheme. Medicare will consume the entire federal budget if it is not reformed.

This graph shows that the average man and woman (average defined in the study as average income over their working lives and living to the average life expectancy) who start receiving benefits in 2010 get over 3 times more in benefits than they pay in to the system! Of importance, the study accounts for inflation by calculating all past taxes and future payments in 2010 dollars to provide an accurate comparison.

If the notion that Medicare recipients are simply "getting back what they paid in" is false then where is the money coming from? Simply, the excess received is being borrowed from younger generations and the cost is more than we can bear.

[campaignPete R-CT]

certain insurable losses cannot be handled by private insurance and require “social insurance”. Health care for the elderly falls into this category. So saving on your own for old age medical expenses isn’t enough. And no insurance company wants to insure and 80-year old who is ill.

There are plenty of solutions offered over the past 15 years by Heritage Fdtn, Gingrich, and now Ryan. And, yes, Medicare folks will have to start paying more than $96/mo. for their coverage, especially the age 65 to 75 crowd.

[sodpoodle]

All good reasons why the Federal Government should never have become involved in ‘health insurance’. Insurance actuarial expertise was the reason for sound business practice. Buy young, cover only illness and injury (not exotic electives or routine maintenance and the unexpected catastrophic risks were payable.

The ‘young’ workers are now forced to pay for Medicare (as all workers have since 1964) as were the first Medicare contributors. Those who began receiving beneftis in 1964 made no contributions - a complete actuarial disaster.

Insurance with integrity is not a PONZI scheme - it is preparation against risk. If you need it - you have it. If you don’t need it - feel blessed.

[SierraWasp]

Why are you so focused on the truth? Oh wait! So am I!!!

I'm focused on the truth that LBJ's Medicare was a mandate and worse yet, a blank check for Dr.s and hospitals that triggered the massive medical costs we see today!!!

Doctors, themselves fretted in those early days that this "fee for service" blank check mandate of Socialized Medicine for thousands of disabled and all those over 65 would cause this very inflationary outcome.

So now we have leftists/Democrats screaming for trillions more to fix a problem that Democrat congresses and Democrat Presidents brought on us in the very first place!!! Do they act the least bit regretful over getting exactly what they asked for to be coming down on all of us now???

This medical inflation by Medicare has boiled over the entire healthcare/health insurance scenario and is now in a vicious spiral!!! Thanks a lot Democrats... Obamacare ain't gonna fix it!!!

[Graybeard58]

Millions of healthy Medicare participants are not costing the program

I've been Medicare eligible for 22 months now and so far haven't cost it a cent. I pay my premium every month and every 6 months, my former employer and secondary insurer, sends me a check for 6 months worth of Medicare premiums.

[kabar]

Medicare, like SS, is a pay as you go system. Today's retirees have their benefits funded by today's workers. The Medicare Trust Fund (Part A) works the same way as the SSTF. Any "surplus" is desposited into the General Fund and IOUs in the form of non-market T-bills are deposited in the Medicare Trust Fund.

Beginning in 2008, the Medicare Trust Fund started running in the red, which means that in order to make up the shortfall, the non-market T-bills must be redeemed by the General Fund that borrows 42 cents of every dollar spent. The Medicare Trust Fund is expected to run out of IOUs 2024, which is later than expected due to Obamacare and the reductions gained by changing the Medicare Advantage program, i.e., virtually eliminating it. Even with Obamacare, the 2011 Trustees report indicated that the HI trust fund will be exhausted by 2024 compared to a projection of 2029 a year earlier.

The Medicare Trust Fund contains no assets, which means that it is an unfunded liability. Hence, it is included in our $15.3 trillion national debt under Intragovernmental Holdings. Medicare Part A represents a $38 trillion unfunded liability. 75% of the costs of Medicare Parts B and D must also be funded from the General Fund, which is why Medicare is consuming an ever larger share of non-entitlement revenue and will eventually consume the entire federal budget if not reformed.

By 2030 one in every five residents of this country will be 65 or older, twice what it is now. And by 2030 there will just be two workers for every retiree. In 1950 the ratio was 16 workers for every retiree and today it is 3.3. And in addition to an aging population, medical costs are increasing faster than inflation. The last time we increased the HI payroll tax was 1986. Today, the combined employer/employee HI contribution is 2.9% of total income without any cap like SS has.

The reason that Medicare is bankrupt has nothing to do with those who entered after Medicare was made law in 1965 contributed nothing to the program. The problem is that the program is not actuarily sound. You can't have an aging population supported by fewer and fewer workers coupled with rising costs that are not linked to premiums. If Medicare were run like a true insurance, the premiums would have to be raised dramatically.

In order to get Medicare Part A on a financially sustainable basis, you would need to increase tax receipts by 21 percent or reduce scheduled benefits by 17%.

The Train Wreck Ahead Medicare is rolling toward disaster, and there is no easy way to fix it.

[campaignPete R-CT]

or increase the premiums

[kabar]

That’s what they mean by increase tax receipts.

[campaignPete R-CT]

tax receipts is what comes out of paychecks. Payroll tax.

Premiums is what is deducted from the SS checks of retirees (96$). Not considered a tax, but a premium payment.

[kabar]

Premiums is what is deducted from the SS checks of retirees (96$). Not considered a tax, but a premium payment.

LOL. A rose is a rose is a rose. In order for that premium to pay the costs for Medicare Parts B and D, then the premiums would have to be tripled. Right now, by law, the premiums only pay for 25% of the costs. Although they have remained the same for the past few years, these premiums are adjusted annually. And it was only a few years ago that means testing was introduced creating several tiers of premiums based on income. Not everyone pays just $96 a month.

Do you think that most retirees who now pay $96 a month would passively sit back and accept a new premium of $384 per person?

[campaignPete R-CT]

$196 would work fine with me.

Pay or die.

SOme 66 yr-old coming down the 18th fairway ... don’t need to subsidize that wealthy bastard. Let ‘em pay until their eligible for title 19.

[kabar]

Try getting such a premium increase. Neither party would agree to it.

[campaignPete R-CT]

pay or die

[Impy]

Do I? Not really.