Medicare costs

With everyone talking about how to lower the deficit, has any pundit or network talking head mentioned that health care costs have stopped rising at twice the rate of other spending?

Which means that projected Medicare spending for the next 10 years has dropped by about $500 billion dollars.  Half a trillion in savings already and no cut to benefits needed.

Do you think they’ll stop insisting that cuts are the only way to go, and need to be done now?

Me neither; just like I don’t expect them to stop acting as if Social Security increases the deficit (it doesn’t).

Medicare, the budget and funding

There seems to be a commonly held belief among media personalities, pundits and members of Congress that Medicare is in trouble.  They also seem to think that Medicare is the big problem we face with the budget.

Of course the major problem with the budget is unfunded wars and declining revenues due to tax cuts, but to take the second point first, Medicare costs have declined over the last 3 years.  Medicare costs have declined faster than any other measured medical cost and they have declined before the changes to reduce costs in the Affordable Care Act have taken effect.

As for the funding issue, the numbers show that with the current rate of funding Medicare will go broke in about 11 years.  That sounds ominous, except that the numbers have said that since Medicare started almost 40 years ago.  Medicare always seems to be on the edge but it won’t go over unless it is pushed.

Yes, reforms are needed because Medicare is not perfect.  But there is no crisis.  Like seemingly all of the recent economic crises this country has faced this one is manufactured.

It’s not all about me

I use my family as an example because I know the details about us, but this isn’t all about us, it’s about anyone and everyone who is in similar circumstances for whatever reasons.

Our specific situation is unusual, but there are other people who are in bad shape financially because of disability as well.  We’re a minority, there are millions of us, but we’re a small percentage of the population.  So if anyone has a threshold of suffering that needs to be crossed before they can’t sleep at night, rest easy.

Except the disabled aren’t the only ones who will need a social safety net.  My wife and I would have been OK if we had been able to keep working.  We can’t save for retirement now because of health issues.  But there are a lot of people who don’t get sick, work their whole lives and still aren’t able to save for retirement because they just don’t earn enough.  It isn’t just when things go wrong that people need help.  This may be the richest country in the world but that doesn’t make everyone rich.  If you’re doing fine financially, good for you, but there are people who need help. 

They don’t need help because they did something wrong or because they’re lazy, they need help because the poor and working class live paycheck to paycheck and wages for the middle class have been stagnant.  Sometimes there just isn’t enough left over to save enough to retire, or save anything at all.  Even with the programs we have now some people will keep working until they die.

We should be talking about improving what we have, not trying to cut it because it’s expensive.  What’s a human life worth, anyway?  What’s a little dignity worth?  Why is compassion not worth the expense?

I’d like to think we’re better than this.  Maybe it’s time we showed it.

Of course I worry about my wife and myself, but we’re not alone.  We help others when we can.  I don’t understand why we can’t do that as a nation.  We’re not just individuals, we’re a community.  When did we forget that? 

Maybe Sandy can remind everyone.

Optionally disastrous

I mentioned the proposed changes to Social Security and Medicare, and you might be thinking that these changes won’t hurt them because it’s just a way to offer people options of how to save for retirement.

First of all, even if the proposed changes worked, my wife and I are both under 55 and can’t work.  There’s no way we can save enough for retirement.  If you’re 54 years old could you save enough for retirement in 10, or even 15 or 20 years?  If you can, good for you, but most people in the country can’t.

Social Security and Medicare weren’t created because everything was working great for seniors.  Seniors were sick and living in poverty, that’s why those social service programs were created.

But the changes would destroy these programs.  They work as they were designed, with some minor adjustments, but these changes will push millions of people out of them.  Reducing the base of people paying into them will run Social Security and Medicare into the ground very quickly.

Social services aren’t there just for the fun of it, they exist because it’s simple human decency to make sure that people don’t die sick, in pain, and starving.

Any talk of a grand bargain is talk of abandoning seniors because they just aren’t worth it to the people who run the country.  It’s just profit over compassion.

Medicare

Oh, look, they promise to only cut Medicare to providers and they claim that it isn’t a cut to recipients’ benefits. Apparently limiting where sick people can get their health care isn’t a cut. I remember the same people that support this screaming about death panels that didn’t exist. I guess it’s OK if it only hurts people and not insurance companies.

Maybe they think this will force people to use private insurance but there isn’t a private insurer in the country who will cover you if you’re eligible for Medicare. And not cutting Medicaid might not help much because in some places it’s used to pay Medicare premiums so people can get health care through that.

Well, it only hurts poor people, seniors and the disabled so I guess it’s OK.

Reality

This is not a plea for sympathy, I’m just using myself as an example because I know the numbers. This is an explanation of how people find themselves living at the whim of others. A position I often see taken against Social Security and Medicare is that people should have the sense to save for the future.

Now, aside from the obvious problem that many people don’t earn enough to save let alone retire, there are other possibilities.

I was 46 when I got critically ill and almost died. Did you have enough saved for retirement at 46? I don’t mean enough to retire after 20 more years of work, I mean enough to retire at 46 and then live off of for the next 30 years or more.

So, I got sick at 46, I can’t work, I had 6 months at 40% pay (a benefit I appreciated, but not a way to get rich), I had a year where I had no money at all coming in (my insurance company didn’t believe my doctors), now I am dependent on various forms of insurance (that I paid for) that give me about the same amount as I made in the early 90s. I also have medical expenses that are more than 3000% higher than they used to be – that is not an exaggeration.

My out of pocket medical expenses are just over 28% of my income. That’s with two forms of decent insurance. Is it a surprise that people go bankrupt because of medical debt?

By the way, when I got sick it cost $1.3 million dollars to save my life. Does anyone honestly question a need for good insurance for everyone?

I haven’t given up trying to find a way to get back to some form of work, but I may not be able to and there are people who are in worse shape than I am.

Social Security and Medicare are called social safety nets for a reason. Sometimes, no matter how well you plan, illness and accident and age will catch up with you. My wife got cancer, was hit by a reckless driver and can’t work. I got sick and almost died and can’t work. Who can plan for that?

Do you know what your health will be like when you reach 65 or 70 or 80 – or tomorrow?

Are you ready for anything like this in your life?

Medicare

Currently the average couple on Social Security pays about 10% of their income for Medicare premiums. Proposed changes would make that closer to 30% for private insurance instead.

In my area, if they will sell it to you and there are no pre-existing conditions to get in the way, health insurance for a couple at retirement age will cost you $18,000 a year for a policy with a $2,000 deductible.

The new plan proposed to replace Medicare will give that same couple just under $12,000 to buy that $18,000 private insurance policy (which sends more tax dollars to private companies).

The average Social Security income for a couple is less than $22,000 a year.

That means after they buy insurance and pay their deductible (22 + 12 – 18 – 2), a couple will have $14,000 left over for everything else. That everything else includes, among other things, food, shelter, heat, co-pays and co-insurance. That’s assuming they don’t get sick. Take my wife and me as an example. We get more than that average. Still, for us, basic non-discretionary living costs and high out-of-pocket medical expenses mean that we would have about $6,000 a year to live on.

Can you live on $6,000 a year? How about after 15 years of inflation?

Please understand that cutting Medicare or Social Security isn’t about balancing a budget, it’s about people’s lives.

Ya know

Whatever you may think of the latest plan to kill Medicare, it does nothing to control costs.