This is Medicare as we know it.
In April, Medicares trustees reported that the program, which covers 40 million seniors, paid out $549 billion in benefits in 2011 but took in just $530 billion in revenue. At this rate, the trustees predict that Medicare will be broke in 2024, or for workers who are 53 years old and younger.
This is how those numbers break down at the street level.
Researchers C. Eugene Steuerle and Stephanie Rennane of the Urban Institute determined that a couple retiring in 2011 will receive approximately $357,000 ($170k for a man, $188k for a woman) in lifetime Medicare benefits. Conversely, they estimate the amount of Medicare taxes a couple paid with each person making $43,500 at retirement totaled about $119,000. Even at the high end of their income calculations, ($100,000 per two person household) a couple retiring in 2011 is likely to double their money in terms of Medicare taxes paid and benefits received. (In addition, Medicare recipients pay monthly fees for their health care coverage).
Given this data, Im confused by those who want to preserve Medicare as we know it. Yet this is a frequent refrain among Democrats now that Wisconsin congressman and House Budget Committee Chair Paul Ryan has been named to the Republican presidential ticket headed by Mitt Romney.
Ryans proposal would replace the current defined benefit form of Medicare with a premium support model in which seniors would buy their own private insurance policy just like younger people do. For this Ryan has been called an extremist.
I took particular interest in President Obamas chief campaign strategists remarks to CBS News on Monday. David Axelrod said, They (Republicans) want to turn it (Medicare) into a voucher program. And slowly, all the burden is going to shift to seniors themselves. And that is not an answer to entitlement reform.
Why not? Why isnt this idea at least part of the answer? Vouchers are nothing new. In fact, one of the most popular social programs the federal government runs, the Supplemental Nutrition Assistance Program (better known as food stamps), is essentially a voucher program. Benefits are income-based and the recipient is relatively free to spend those benefits as he or she sees fit. The benefits may be enough to provide the recipient with hamburger, but when supplemented with some of the recipients own resources, he or she can eat steak. Either way, the recipient gets to choose.
A voucher-based social program isnt radical or new, and if poor people can figure this out, Im confident old people can too.
Axelrod and his like-minded allies imply that having seniors pay more for their own health care is sacrilege. Its not. In fact, it is the moral thing to do. As I have written previously, seniors are the richest demographic among us. The Census Bureau recently reported the median net worth in 2010 of a married couple 65 and older was $307,000. Indeed, 37 percent of 65-plus couples are worth upwards of $250,000.
However, nearly 14 percent of senior couples have zero or negative net worth. Morality says their health care should as close to free as practicable. But Warren Buffet and at least 40 percent of his generation can afford to pony up more for their Medicare as well as help out those at the economic bottom.
Unfortunately, Republicans do the same thing, but with different federal programs. Increasing defense spending, as Romney and Ryan propose, is just as silly as preserving Medicare as we know it. Spending more on defense than the next largest 17 countries combined should be enough to protect our interests around the world.
I also dont like the Republican practice of fighting wars without raising the taxes to pay for them. Spilling our young peoples blood in a war is bad enough. Shifting the cost to their generation is unconscionable.
Regardless of who wins Nov. 6, the electorate must accept that the days of keeping federal programs as we know it are numbered. Changes that negatively affect us personally are needed.
Otherwise, the America we know will cease to exist.
Contributing columnist Rick Martinez (email@example.com) is news director at WPTF, NC News Network and SGRToday.com