Do we need Medicare reform?
As you know, Representative Paul Ryan (R. Wi.) has proposed that Congress tackle the looming fiscal disaster that exists for Medicare. A caller yesterday objected to any change because, as he put it, he has been paying into Medicare for years and wants to make sure he gets his money back.
Aside from the fact that “his” money no longer exists as it has already been spent, let’s look at payments to Medicare over the years based upon a conversation I had with a friend of mine last night.
Medicare came into existence in 1966. Since then both she and her employers have paid into the program. Based upon the annual statements she has received from Social Security, through 2008, she and her employers have paid $44,564 into Medicare. Using her earnings, and expected earnings until 2112 when she reaches 65, she and her employer will add approximately $8700 more to the Medicare pot.
So, next year when she is forced onto Medicare, she will have contributed approximately $53,000. Look at your own annual statement and, as they say, do the math.
Now, let’s look at benefits.
Medicare calculates that it spent an average of $11,743 on beneficiaries in 2009, according to the Centers for Medicare and Medicaid Services.
Given those figures, ask yourself…do we need to reform Medicare?
The worst part is that if you had invested that $53 large in even the most conservative account (intended), it would have gained interest over that same 46 years, doubtless accruing a slew of interest. It is obvious what the tender ministrations of the government have done to that 53 large.
MSA, anyone?
IF the money had been conservatively invested – it would have AT LEAST doubled or tripled in value in that time frame.
I like HSA's
It look so good on paper does it not? What the truth is, your money put in, went right back out, you only got a promise of medicare later on; meanwhile they spent it and well, now they do not have that money or enough flowing in to cover what needs to go out. Oh, dear, another ponzi scheme exposed.
Paul Ryan wants to kill old people. The nerve. That's what Obamacare is for.
Tim, as always, you nailed it.
You are a man of enlightening brevity! Bravo!
Putting aside the Ponzi scheme, the $50K +/- plus interest should have been enough for Medicare PART A—which is all the money was collected for. You pay a premium for Part B, Part D, and probably even Part C when you enroll. But…those premium amounts are woefully inadequate and?so the government is subsidizing them?which accounts for?$200B+ of the annual deficit.