As part of the leading edge of baby boomers, an article on the ills of Medicare funding caught my eye. The health insurance for seniors program never was designed to be on a sound footing. It was more of a political boondoggle to make LBJ and the Great Society look good.
While I do not think Medicare (or Social Security either) will go away, these social programs are not financially sustainable in their current form. A new poll from AP-GfK reflects some of the doubts about Medicare.
63 percent of boomers in the poll dismissed the idea of raising the eligibility age to keep Medicare afloat financially. But when the survey forced them to choose between raising the age or cutting benefits, 59 percent said raise the age and keep the benefits.
That won't work, especially with Obamacrap changes breathing down our necks.
If the start date for Medicare matches the age for full benefits under Social Security, those who are not covered by an employer group health plan will be left in the lurch between age 65 and whatever date they become eligible for Medicare.
Plus, Obamacrap is going to double health insurance premiums by 2014. How many 64+ year olds will have an extra $2500+ per month to pay for health insurance?
Someone needs to talk to those who took the survey and explain the facts of life.
Medicare is a middle-class bulwark against the ravages of illness in old age. It covers 46 million elderly and disabled people at an annual cost of about $500 billion. But the high price of American-style medicine, stressing intensive treatment and the latest innovations, is already straining program finances. Add the number of baby boomers, more than 70 million born between 1946 and 1964, and Medicare's fiscal foundation starts to shake.
That's roughly $11,000 per year per person And Medicare only covers about 80% of medical bills, exclusive of prescription medication. The balance is either paid for out of pocket, or through a Med supp plan.
And $500 billion is roughly 15% of the current federal budget. What happens when the number of Medicare beneficiaries almost double over the next 10 years?
When forced to choose, even a majority of Republicans said they would rather pay higher taxes (53 percent) than cut benefits (38 percent). Among adults in their 20s, who'd face a whole career paying higher taxes, 61 percent said they would be willing to pay more to preserve benefits. Only 29 percent of boomers said keep taxes the same but cut benefits
Well that sounds nice but here is the rub.
Medicare taxes have been increasing since first used in 1966 when the rate was 0.7% (half paid by the employee, the other by the employer) and was only paid up to the Social Security wage base. The cap was lifted in 1990 and applied to all wages, even earnings in excess of the wage base. Currently the total HI (hospital insurance) tax is 2.9%, over 4x the rate in 1966.
In addition to raising taxes, every year Congress cut's benefits and raises the premium charged to seniors for Medicare Part B.
Medicare is like everything else the government tries. It has cost more than they ever imagined, they have never done a good job of managing costs and now they want to provide health insurance for the rest of the citizens. Medicare is going bust but can be fixed. It is not too late to stop Obamacrap from the same ending.