Medicare vs Obamacare

From The Hill 3-6-15

The Medicare program is at a crucial juncture: it is responsible for 25 percent of all federal outstanding debt this century, and the total continues to grow. Every day, 10,000 newly eligible seniors enter a Medicare health insurance program whose budget needs are already escalating out of control. This path is simply unsustainable. 

And in a few years:

The Obamacare program is at a crucial juncture: it is responsible for xx percent of all federal outstanding debt this century, and the total continues to grow. Every year millions of newly eligible Americans enter a Obamacare health insurance program whose budget needs are already escalating out of control. This path is simply unsustainable. 

Unintended consequences⁉️


2 comments

  1. The problem with this opinion is that is based on the assumption by someone at The Hill that Medicare is responsible for all that debt. It is true that for people born before 1940, Medicare is a hell of a deal in terms of what they paid in vs. what they reaped in benefits (the longer before 1940 the more this is the case) and that that difference was borne by general revenue (but see Note 1), probably financed.

    But people born after 1940 (the longer after 1940 the more this is the case) paid or are paying their own way with 40-50 years of Medicare payroll and the portion of income taxes allocatable to Medicare plus the Medicare pooling effect (same as in all insurance schemes: some percent who paid in died before joining Medicare, some moved back to native countries, etc.) plus the Medicare premium surtaxes added in 2003 and 2010 (and see Note 2).

    Note 1: The fact that Medicare would not pay for itself until those born after 1940 joined the program was well known and debated during the passage of Medicare in 1965. Everyone agreed the greatest generation and Korean War generation deserved it and there were not that many people born between 1865 and 1910 left that it mattered to the beancounting.
    Note 2: When you look at what a person born after 1940 paid into or is paying into SS and Medicare combined, particularly based on the SS benefit and SS tax changes after about 1985 (tax implications both before FRA and after you start collecting), the combination is not only not a good deal for anyone that works through to SS full retirement age and joins Medicare at age 65, it is a total ripoff.

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    1. Wait a minute. Nobody paid for his Medicare. Take an average wage earner at $55,000 and assume the current Medicare tax rate for 40 years. They have paid into Medicare a total of $31,900. That equals about about one weeks hospital stay and medical costs or perhaps six or seven years routine health care expenses. Nobody currently on Medicare has paid his own way and those yet to collect won’t either.

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