I am turning 65 in a few months - I got my Medicare Card this week. So things will be changing a bit for me. As a Ma Bell retiree I currently have good health insurance - not as cheap as it once was but pretty good. Even so, I do not think that my healthcare will change that much. My rant is more about the solvency of these government geriatric programs.
My parent's generation produced twice as many kids as mine. The consequences are that my kids will have a greater tax burden as more of us Boomers retire simply because there are fewer tax payers in the system to pay for the entitlements of seniors. I think that huge changes need to be made in Social Security and Medicare to compensate. A few thoughts:- If they raise the eligibility to 70 (for example) that would mean that private insurers would have to cover people for an extra 5 years or so - who knows how that would play out.
- Another solution is to do means testing for these senior entitlements - seniors would probably feel the rug being pulled out from under them but it may be the best option to make these programs solvent.
- And then of course there is a tremendous amount of fraud that should be dealt with - even these types of investigations are expensive and cost tax payers money.
- Lastly, I hate to even mention it, the government could raise the earning limit (currently $117,000) for FICA (Federal Insurance Contributions Act) taxes causing people who make more money to pay more into these geriatric programs.
I have a few more years to go, but I am concerned that our current crop of politicians is simply avoiding doing the hard things that may be necessary hoping that they'll be safely ensconced in their retirement by the time it all hits the fan.
ReplyDeleteGood point Fred. A few years ago the average age in the senate was 65. So I suspect that many of these folks are retired in place and are getting paid so well that they do not need geriatric entitlements.
DeleteI tend to agree with Fred, but I also think we do not tend to elect people who are willing to make hard decisions. We tend to elect people who promise us everything and claim no sacrifice will be involved. I do not claim to have the best answer to this problem. But I am very much afraid no politician will act until they are forced to by circumstances.
ReplyDelete"sacrifice"? You use a strange word my friend.
DeleteBut perhaps Americans will wake up before if it too late Mike?
At the risk of pouring my negativity onto your rant, I have to say that for all the practical suggestions you have listed, your final paragraph is doubtless an accurate summation of reality.
ReplyDeleteCould be dreaming vanilla. Maybe not?
DeleteI think doing away with the FICA limit entirely will fix this. Some people would complain that would mean people paying into the system that wouldn't use it, but that has never stopped from taxing people for things that they personally don't need. I own a house, I'll be paying taxes on it to Madison County, Illinois. Most of those funds are going to my town's school district, yet I have to pay it even though I have no children, and don't want to have children. Why should FICA taxes be any different?
ReplyDeleteI tend to agree with you Sheldon. My limited understanding of this is that politicos once who enacted the law felt that there should be a cap on FICA contributions because there is a cap on social security payouts. Medicare is different though as it more resembles health insurance policies.
DeleteI don't agree with your word 'entitlements'. We paid into the system with the promise we would be receiving funds at retirement. If Congress had left the money alone, there wouldn't be a deficit. They are the ones who made the problem, so they should fix it. One of the best ways would be for them to live with the same laws they impose on us. There needs to be a lot of reform in Washington, DC. I do realize that SS was not ever made to be the entire retirement, but let's face it, there are many who do just that.
ReplyDeleteThanks for the great comment Linda. I looked up the word and here is what I found:
Delete"Originally, the term "entitlement" in the United States was used to identify federal programs that, like Social Security and Medicare, got the name because workers became "entitled" to their benefits by paying into the system. In recent years the meaning has been used to refer also to benefits, like those of the food stamps program, which people become eligible to receive without paying into a system."
In my view most of us pay taxes - even food stamp recipients pay taxes. The issue is that we all generally pay in less than we get out of these entitlements - especially when you consider how much Medicare pays out.
Ideally our FICA contributions could have been set aside and we could have seen a growth in those funds as the interest compounded. Sadly, as you have indicated, this has not happened. So the question is how to move forward with less people paying into the system (via FICA) and more people taking from the system. That question was what I was ranting about. :)
I don't really know but it a sad state of affairs. I would like to see my own money making some interest for my future. An account I have was making around $600. five years ago and now it is making $18. a year. My dad just went for one of his first appointments this year. He would pay a co-pay of $15. and this year it is $45., that is just wrong. My dad has the money but many people are on a very fixed income so they will end up not getting the medical care they need. I have a few more years for my Medicare card but it worries me.
ReplyDeleteSo true Debbie. The mortgage crisis has really made it hard on retired people who paid their mortgages and now are getting next to nothing on money market accounts and CDs in their retirement accounts.
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