Jim has been talking for months about the tie between Medicare and Obamacare. Medicare is broke, and to keep it running, the government needs an enormous infusion of cash. Finally, someone has admitted that Jim is correct.
Alan Greenspan has now spoken about the connection.
And, let me explain why.
When Medicare came into being under President Johnson, there were millions of “baby boomers” in the work force, and, they paid a payroll tax to offset the cost of Medicare. And, that continued for decades. Medicare worked, and all was well.
Now, as the say, “Houston, we have a problem”. The millions of “baby boomers” who paid for the system are now retiring themselves, and this creates a double “wammy”.
First, the “baby boomers” are now reaching the age of 65, and they have no where else to turn for medical insurance except Medicare. That program long ago wiped out any private insurance for seniors. So when you hear Obama say that his public option will “compete” with private insurance, remember what happened when Medicare came into being…private insurance for seniors quickly died.
And, second, those retiring “baby boomers” will no longer be paying payroll taxes into the system. The net effect of this is that hundreds of thousands of retirees will be added to Medicare each year, and the tax base to pay for the system will be eroding.
Without Obamacare, and, a public “option”, Medicare will fall further and further into a sea of red ink. To halt this trend, Obamacare ultimately will force the young and healthy to buy the public “option” insurance, and the premiums they pay will be used to prop up the ailing Medicare system. But, it will not, and cannot stop there.
Obama and Congress tell us that they can pay for Obamacare by saving $500 billion over 10 years from Medicare. Logic tells us that adding millions of “baby boomers” to the Medicare rolls, eliminating the payroll taxes they pay into the system, and, simultaneously wringing billions out of Medicare can never happen. Unless, of course, health care for seniors is rationed.
And, that is a preview of what Obamacare will look like in the future. The system can only be sustained if medical care is rationed, not just for seniors, but for all.
Update (Jim): The Sound Off Sister and I listened to this further affirmation last night on Special Report from Charles Krauthammer. The Feds need to save Medicare and they are going to do it with your kids money and by stealing the insurance companies premiums.