Those of us who have been lucky to make it to age 65 and beyond have an interesting perspective. Many of us think we earned our government benefits, that “we paid for them” as many people like to say. That includes both Social Security and Medicare.
While we have certainly paid a hefty amount during our working years, we did not pay for our benefits in total or even close to the total for that matter.
Both general federal revenue and current working Americans (in other words taxpayers now and in the future) are 
picking up a big junk of the tab.
The fact is that nothing via the government is “free” and much of it is not even paid for but rather adds to a growing debt and massive future liabilities.
Thinking Americans need to understand this. All the promises made and being made by politicians sooner or later must be paid for.
The wealthy don’t have enough money to foot the bill, the middle class will pay heavily. And even if the wealthy did pay for all the promises, is that the way you want to live; on the financial backs of other Americans? Do you want a country where the philosophy is tax everybody (else) and write me a check?
Bernie Sanders likes to hold up Europe and especially Scandinavian countries as a model. He rarely mentions the taxes that everyone pays to foot the bill.
Republican presidential candidate Jeb Bush tripped the Medicare wire this week in talking about the urgent need for entitlement reform, a key pillar of his plan to get the American economy moving again with 4% growth.
According to a CNN report, he was confronted by a senior citizen at a New Hampshire town hall meeting who said she was very concerned about policies that would change or phase out Medicare.
“My Medicare right now is wonderful and I paid into it for all these years. Why are you always attacking the seniors?” she asked Bush.
“Well, I’m not,” Bush responded, according to Politico. “Here’s what I said: I said, ‘We’re going to have to reform our entitlement system.’ We have to.”
“It’s not an entitlement,” the woman shot back. “I earned that.”
“It’s an actuarially unsound health care system,” said Bush.
The fact is the woman questioning Bush was wrong in saying she has paid for her Medicare benefits. At best, she will have paid for less than half of the expected cost of her lifetime Medicare expenditures and possibly as little as 8%. Medicare is not sustainable as it is currently structure, and reform is indeed vital.
In fact, today’s typical Medicare beneficiary will have paid into the system just 13% to 41% of his or her expected Medicare consumption. The rest is funded by payroll taxes paid by today’s working Americans.
Politifact has taken on this issue in its Truth-O-Meter based upon Urban Institute data, concluding that “today’s beneficiaries have gotten far more back in Medicare spending than they put into the system through their tax payments…
via Seniors Are Receiving Far More In Medicare Benefits Than They Pay In Taxes – Forbes.
QUINNSCOMMENTARY 
If you are one of the lucky folks who will be included in cost sharing (means testing) because of your income level, stand by for a 52% increase in your Medicare premiums. Also if you will be new to Medicare in 2016, you will be welcomed aboard with a likewise increase. Pity the poor folk whose income is 1 dollar above the income points, that 1 dollar may cost them thousands. This is all due to the probable lack of a social security COLA and the hold harmless clause. If there is no COLA, the increased expense for Medicare B must be picked up entirely by those who have incomes higher than 85K single or 170K couple.
If you are lucky enough to be in this group, don’t expect any sympathy from those who are not, but do expect plenty of whining when there is no social security COLA.
http://finance.yahoo.com/news/unexpected-spike-medicare-premiums-151800550.html
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Bob, your FICA-Med contribution, assuming you were employed, funded 1/2 of the Hospitalization coverage enjoyed by those who went before us. Even with Medicare caps on reimbursement rates for hospitals that are in place today, chances are any hospital stay beyond 10 days will easily exhaust your lifetime of contributions, and any combination of hospital stays of maybe 30 days, would exhaust not only your lifetime of contributions, but also an assumed 6% rate of return on those contributions.
So, Mr. Bush is correct, actuarially speaking, the Medicare FICA-Med contribution was not, and never was intended to be “actuarially sound” – it is, was and always will be intended to be a wealth transfer from those currently working to those no longer working who are age 65+ or disabled. That has not changed since the introduction of Medicare in 1966.
In addition to those taxes, you were also, on a pay as you go basis, funding Medicare Part B through your income taxes – again, a wealth transfer from you to those who are no longer working who are age 65+ or disabled. If you have been paying income taxes for the last 50 years, you’ve been funding other people’s Part B medical expenses.
And, since 2006, if you have been paying income taxes, you were also, on a pay as you go basis, funding Medicare Part D (Rx) benefits through your income taxes – again, a wealth transfer from you to those who are no longer working who are age 65+ or disabled.
Some of us, here I include myself, have in fact contributed more into Medicare (through payroll taxes, income taxes, and interest earnings on those taxes) than we can ever hope to recover from Medicare. More importantly, because we have saved significant sums and took less wages while working to obtain a defined benefit pension plan benefit, we will also be paying the surtaxes for Part B and Part D – and are the target of Mr. Bush and other weenies who want to make Medicare coverage “means tested”.
So, if you are like me, you will have paid in massive sums all your life and will receive nothing when it is your turn to claim those Medicare benefits.
Sounds like a vote buying system all politicians would like.
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I agree with the woman … she DID earn her Medicare benefits. When she, and you and I started paying our mandatory FICA, the money was deposited into a fund from which our benefits would be paid. That’s not to say that our benefit must be equal to or less than our required contribution. We bought an annuity based on actuarial assumptions of lifespan, investment growth, COL changes over the years and whatever else went into the mix. If the Government and their actuaries estimated wrong, that’s their problem. I paid for my contract and now, I’m getting the benefits that I purchased. If they didn’t charge me enough when I bought in, it’s their problem, not mine. Entitlement, yes. We’re entitled to the benefit we paid for.
A corollary would be if I bought a life insurance policy today and died next week. (Lord, this is just hypothetical) My survivors would be entitled to full payout. Nobody should challenge that they are getting more than the premiums that I paid.
I see both situations as applications of the same principle.
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