JoeB131
Diamond Member
- Jul 11, 2011
- 173,061
- 33,485
[QUOTE="Ray
I agree SS contributions should increase. If we don't, the choice is SS either goes the Medicare Route with government funding the difference between contributions and benefits paid or benefits are cut 25% to equal contributions. This will occur in the 2040's if nothing changes.
The government already funds Medicare, to the tune of 275 billion in 2015 and it increase every year.
There're two Medicare trust funds, the Hospital Insurance Fund which pays hospital bills (Part A) and the Supplemental Fund (Part B and Part D).
The Hospital Insurance Fund is funded by payroll contributions. The last increase in contributions was in 1985. It has balance of 205 billion. It's expenditures exceed income by about 3 to 5 billion, so it will probably not need an increase in payroll contributions for some years. BTW this was Medicare until the 1960's when congress expanded Medicare to include Part B which includes medical expenses other than hospital costs.
The Supplemental Insurance Fund is the problem. It pays for doctor visits, drugs, and all other medical expenses other than hospital costs. It is a voluntary option, called Part B of Medicare. Part D covering drugs was added in 2005. It is funded by contributions from beneficiaries who choose this coverage. It pays roughly 80% of covered expenses and beneficiary pays 20%. It's funded by monthly payments by beneficiaries and transfers from the general fund.
In 2015, the general fund transfers were 272 billion and payments by beneficiaries were 82 billion to the Supplemental Fund.
The concept of the Hospital Insurance Fund is similar to Social Security, the workers pay into the fund to defray cost when they retire. The Supplemental Fund is totally different. It's a system of sharing medical costs of the retired and disabled between beneficiaries and goverment. Expenses of the Supplemental Fund are more than twice that of the Hospital Fund and growing rapidly.
I believe we need to gradually raise retirement age and Medicare eligibility age to 70 over the new 20 years. This will not totally solve the funding problem with either S.S. or Medicare but it will certain help. It will also help relieve a growing shortage in the labor force. Right now we have 3 million jobs openings and we are adding hundreds of thousands of new jobs a year. Also, our birthrate is almost equal to our death rate and is falling. We are retiring 10,000 people a day and will for many years. If the nation is to continue to grow we have to have more workers. That can come from much higher immigration rates, which doesn't seem likely or we spend more of our life working and less in retirement.
All very well said, Flopper.
The problem is, you have a better grasp on the dynamics of the issue then the people making the policy.
I think the answer to medicare is Medicare Part E... Single payer like every other country has.
For Social Security, you are right, we probably need to raise the age to 70. When it was first enacted, m ost people didn't live to be 65. Today the average lifespan is 78.