Social Security now joins Medicare in producing red ink.
Two-thirds of the uninsured will pay only $100 a month for insurance.
Tag Archives: Social Security
The Obama Budget
According to Gene Steuerle, Medicare, Medicaid, Social Security and interest payments are going to crowd out everything else the federal government is doing:
.jpg)
Source: Tim Roeper and Eugene Steuerle. Based on the President's proposed spending as analyzed by the Congressional Budget Office, "A Preliminary Analysis of the President's Budget and an Update of CBO's Budget and Economic Outlook" March 2009.
Medicare
We have previously reported on Medicare’s unfunded liability and ways to reform Medicare. This is from J.D. Foster’s Medicare backgrounder for Heritage:
- The program has an unfunded liability of $85.6 trillion.
- The drug benefit alone (Part D) has an unfunded liability of $17.2 trillion – greater than that of Social Security.
- The average beneficiary receives a benefit of $10,460 a year, but pays premiums of only $1,212.
- The cash flow deficit in Medicare is being covered by general revenues, thus crowding out other spending programs: currently at $4,053 per beneficiary, the general revenue subsidy will grow to $6,067 by 2020.
It’s Today: Obama’s Summit
Many Democrats (according to the New York Times) are upset that President Obama is even bringing up the issue of elderly entitlements. Will it do any good?
Let's start with the basics. We can begin by recognizing the problem – which too many Democrats (and even some health economists) have been denying for way too long. This may require an "intervention," and maybe even 12 step rehab. But there is no way we are going to get agreement on a solution, until we get agreement on the problem.
According to the Trustees, the unfunded liability in Social Security and Medicare is more than $100 trillion dollars (that's trillion, not billion), or about 6 ½ times the size of the entire US economy. That's the size of our commitments over and above expected premiums and dedicated taxes, measured in current dollars. [link] Continue reading It’s Today: Obama’s Summit
Uwe Is Not Paying Attention
Speaking of unreasonable addiction to Ponzi schemes, here is Prof. Reinhardt writing at a New York Times blog. He asks, "Can Americans Afford Medicare?" He answers: "What if we couldn't? What would we do – push the elderly into the ocean on an ice floe?" Mercifully, he rejects that option. But then adds, "The best we can do today is to put in place public policies that can help G.D.P. grow now and in the future, to ease the pain of sharing."
Isn't that a little like saying that if you're headed toward a brick wall at 70 mph, the best you can hope for is to slow down to 60 mph? Read what Larry Kollikoff says about the coming generational warfare here.
Fortunately, there are many better things that can be done, as outlined here. My back-of-the-envelope calculation of what we need to do to leave our grandchildren with no higher tax burden (as a percent of national income) than what we are paying today is shown in the table.
Thinking About Tomorrow
If the federal government stopped the Medicare and Social Security programs today – collecting no more payroll taxes and allowing no more accrual of benefits – it would still owe up to $52 trillion to those who have already earned these benefits, according to a new study by the National Center for Policy Analysis (NCPA).
Of that amount, $33 trillion is owed in Medicare benefits. To put the numbers in perspective, the size of the entire U.S. economy is $14 trillion.
No one thinks we are going to end these programs. Yet these are the right numbers if we account for federal obligations the way private pensions and state and local governments are required to.
httpv://www.youtube.com/watch?v=WBKkwxCV5ls
"Don't Stop Thinking About Tomorrow"
Johnson Introduces Medicare “Freedom to Choose” Bill
Congressman Sam Johnson (R-TX) has introduced legislation (HR 7148) that would allow so-called private contracting under Medicare and enable people to decline to enroll in Medicare without forfeiting their Social Security. It would also allow people who are otherwise eligible for Medicare to continue contributing to an HSA. Mr. Johnson, who is a member of the Health Subcommittee of the Ways & Means Committee, said in a press release, "If Warren Buffett wants to pay for his own medical care, I say we should let him."
The private contracting issue means that Medicare beneficiaries could see a private physician and pay directly for the service, without requiring the doctor to opt-out of Medicare altogether, provided there is a written contract between the physician and the patient and they do not attempt to bill Medicare for any part of the service.
At the same time, a lawsuit has been filed on this very issue. (See previous post.)
In an op-ed on this issue, Heritage president Ed Feulner, says "You'd expect those who run entitlement programs to jump at any chance to trim expenses and save money (but) you'd be wrong."
Whose Life Is It Anyway?
Lewis Randall, Norman Rogers, and Brian Hall don’t want to join Medicare. It turns out they don’t have to, as long as they are so wealthy they can agree to forgo all of their Social Security benefits and return any benefits they have already received.
According to the Institute for Health Freedom, Social Security regulations state that:
Individuals entitled to monthly [Social Security] benefits which confer eligibility for HI [Hospital Insurance] may not waive HI entitlement. The only way to avoid HI entitlement is through withdrawal of the monthly benefit application. Withdrawal requires repayment of all RSDI [Retirement, Survivors, and Disability Insurance] and HI benefit payments made. [Emphasis added]
Yet this is inconsistent with the text of Sec. 1803 of the 1965 Title XVIII amendment to the Social Security act, the amendment that created Medicare. It says:
Sec. 1803. OPTION TO INDIVIDUALS TO OBTAIN OTHER HEALTH INSURANCE PROTECTION: Nothing contained in this title shall be construed to preclude any State from providing, or any individual from purchasing or otherwise securing, protection against the cost of any health services [emphasis added].
So, what can you do? Sue, of course. With help from the Fund For Personal Liberty, the three plaintiffs plan to sue the federal government for the freedom to choose their own medical care in old age. The case is expected to be filed this month in the U.S. District Court in Washington, D.C. Continue reading Whose Life Is It Anyway?
One Way to Reform Social Security
This is from a column by Scott Burns and Larry Kotlikoff.
Part B premiums for Medicare are deducted automatically from the Social Security checks of seniors. But if health care costs continue to grow faster than consumer prices generally, Part B premiums will reduce the real value of Social Security over time.
Take an average-income couple, age 30. Medicare premiums will be $12,151 by the time they reach age 65, and $21,146 by age 85 (all at today’s prices). As a result of the implied reduction in Social Security benefits, the couple will have 23% less discretionary income during their retirement years.