Medicare -- Myth vs. Fact

I am going to veer off topic for a bit because there is a lot of misinformation out there about universal healthcare -- specifically Medicare. As one who worked for over 30 years in the SSA system, I would like to help clarify if I can.

Social Security was established during the height of the Great Depression as a part of FDR's New Deal. It was intended to help the elderly pay for basics (food and shelter) after they no longer had a paycheck coming in. The age of eligibility was 65, and participation through payroll taxes was mandatory for everyone except government workers, who at that time were covered by the Civil Service system (now gone and replaced by FERS).

At the beginning, a Trust Fund was established for the monies being paid in, and there were 10 workers paying for each retiree. Also, the average life expectancy was about age 55. Many people never collected a dime.

After the second world war the economy was robust, and the returning G.I.'s began the Baby Boom. In 1958, a Disability benefit was added to the SSA system, so some people could "retire" earlier than age 65. Eligibility and benefit amounts were determined by the impairment(s), the worker's contributions into the system, and level of earnings. And now, benefits could go not only to the retired disabled, but also their children under 18 as well as their widows once they died.

In 1965, LBJ began The Great Society, and Congress added Medicare and Medicaid to the SSA system. From that day forward, health benefits have been a part of the SSA. In 1974, SSI (Supplemental Security Income) replaced general Welfare for disabled children and low income disabled adults who had never made any contributions to SSA.

If the Trust Fund had remained separate from the federal General Fund, the system would be fully solvent through 2038, even though the Baby Boomers are now coming on board, the average lifespan has grown to over 78 years, and there are now only three workers for every retiree. But as the monies have come in, they were not placed in Trust, but spent, with IOU's being sent to the SSA.

The problem, of course, is that the Congress and presidents have been using the SSA Trust funds all along, not just to give out candy, but also to give away the candy store. It is not Social Security retirement that is bankrupting the country -- it is the health insurance costs -- Medicare (Parts A, B, and D) and Medicaid/SSI (welfare). These expenses absolutely dwarf the retirement payments.

But the point is -- everybody in the USA has had access to healthcare since 1965. By federal law, any hospital which receives government reimbursement -- that is to say virtually all hospitals -- is required to see and treat every person who comes to their door. And being unaware of this fact does not make it false. We all pay taxes at work our whole working life which fund Part A (hospital costs). We pay for Part B (doctor visits, lab tests, etc.) and Part D (medications) through premiums taken directly out of our retirement checks.

If we each helped the government out a little by dying at around age 68, there would be less angst in Washington. But we don't. Many of us are living well into our 80's and 90's, spending all the money we ever put in, and then taking it out of our children and grandchildrens' pockets (future taxes, reduced benefits).

I have watched elections closely since 1968. I have noticed that any politician who speaks about how we must cut back, reduce spending, raise taxes, or cut entitlements is usually defeated at the polls. So I do not blame them so much as the people who vote for those others -- the ones who tell us what they think we want to hear. And that makes us -- the American voter -- complicit in their deceit. We cannot resist the idea that there is such a thing as a free lunch.

The young people (those under age 35 or so) despair at paying for programs that they will never benefit from. It is very disheartening, because many of them need the money now which is being taken from them, supposedly for later. The simplest fix to all this would be to raise the age of entitlement to age 70 and increase the payroll tax to the FULL amount of one's salary, not just the first 125k. But even doing that seems impossible when current leaders are pushing for a continuation of the payroll tax reductions put in place several years ago.

We will pay for the excesses and lack of political will of the past, in the form of inflation, unemployment, stagnant wages, crumbling infrastructure, jobs shipped overseas, and a looming and deepening crisis in healthcare.