If you receive a paycheck, you pay Medicare, right? Medicare is currently in trouble due to an expected shortfall of revenues to cover increased spending as more and more of the baby boomers become eligible for Medicare. Well, what happened to all of our Medicare dollars that should easily cover current spending with enough left over to defend against possible future shortfalls?
For those of you unfamiliar with the Medicare program, Medicare is by far the best insurance option for those eligible, as Medicare offers the widest choice of providers with reasonable premiums and deductibles, while federal law insures that all providers must adhere to the Medicare reimbursement schedule for anyone over 65 (including those that "opt out"), and providers must perform the footwork for reimbursement of medical goods and services, which keeps the patient from having to attempt to navigate the confusing system of automated phone systems favored by all insurances. Medicare also reimburses providers at an average of 2-3 times the reimbursement rates that commercial insurances reimburse, which helps to defray higher healthcare bills and increased quality of medical care for everyone in the provider's office. Also, for those of you who think that Medicare is a government run plan, Medicare divides the country into districts which are administered by commercial insurances through contracts, for example: Highmark (Blue Cross) administers district J12 (MD, DE, and PA).
In 2006, Medicare spending totaled a whopping $374 billion and equaled 12% of our national budget. Throughout the years, we have been conversing about ways to reduce Medicare spending and Medicare fraud; however, the question that begs to be asked is: why can we not afford current spending? This decade, the Medicare tax on wages was 1.45% from the employee and 1.45% from the employer, and the self-employed paid a total of 1.45% after applying their Self-Employment tax credit, or, to make these statistics more meaningful, in 2006, though Medicare only spent $374 billion, over $500 billion* were collected in the name of Medicare, and this number is discluding the uncollected shares from the self-employed and those amounts not paid because taxes were not filed.
Since the amount collected annually in Medicare tax far exceeds Medicare spending, there should be no reason that we are being told that there is a shortfall in the Medicare fund, so why are we being told this? When we discuss the national deficit, we often believe that this is an amount that we owe foreign investors; however, the reality is that the majority of our national debt is to ourselves. Both Social Security and Medicare are funded through trust funds. Historically, because of the typical surplus in both trusts, the trusts are used as borrowing funds to finance other government programs. Currently, only about 1/3 of the national deficit is liable to foreign sources, and the rest is liable to Social Security and Medicare. When we are told that there is a shortfall in Medicare, this is not due to Medicare overspending, inasmuch as it is due to irresponsible spending in other programs, namely the Occupations of Iraq and Afghanistan.
So, instead of debating cost saving methods to save Medicare, shouldn't we really be discussing cost saving methods to keep from borrowing against Medicare? Shouldn't we stop blaming a well-funded program that works, and look to where the real problems lie?
For those of you unfamiliar with the Medicare program, Medicare is by far the best insurance option for those eligible, as Medicare offers the widest choice of providers with reasonable premiums and deductibles, while federal law insures that all providers must adhere to the Medicare reimbursement schedule for anyone over 65 (including those that "opt out"), and providers must perform the footwork for reimbursement of medical goods and services, which keeps the patient from having to attempt to navigate the confusing system of automated phone systems favored by all insurances. Medicare also reimburses providers at an average of 2-3 times the reimbursement rates that commercial insurances reimburse, which helps to defray higher healthcare bills and increased quality of medical care for everyone in the provider's office. Also, for those of you who think that Medicare is a government run plan, Medicare divides the country into districts which are administered by commercial insurances through contracts, for example: Highmark (Blue Cross) administers district J12 (MD, DE, and PA).
In 2006, Medicare spending totaled a whopping $374 billion and equaled 12% of our national budget. Throughout the years, we have been conversing about ways to reduce Medicare spending and Medicare fraud; however, the question that begs to be asked is: why can we not afford current spending? This decade, the Medicare tax on wages was 1.45% from the employee and 1.45% from the employer, and the self-employed paid a total of 1.45% after applying their Self-Employment tax credit, or, to make these statistics more meaningful, in 2006, though Medicare only spent $374 billion, over $500 billion* were collected in the name of Medicare, and this number is discluding the uncollected shares from the self-employed and those amounts not paid because taxes were not filed.
Since the amount collected annually in Medicare tax far exceeds Medicare spending, there should be no reason that we are being told that there is a shortfall in the Medicare fund, so why are we being told this? When we discuss the national deficit, we often believe that this is an amount that we owe foreign investors; however, the reality is that the majority of our national debt is to ourselves. Both Social Security and Medicare are funded through trust funds. Historically, because of the typical surplus in both trusts, the trusts are used as borrowing funds to finance other government programs. Currently, only about 1/3 of the national deficit is liable to foreign sources, and the rest is liable to Social Security and Medicare. When we are told that there is a shortfall in Medicare, this is not due to Medicare overspending, inasmuch as it is due to irresponsible spending in other programs, namely the Occupations of Iraq and Afghanistan.
So, instead of debating cost saving methods to save Medicare, shouldn't we really be discussing cost saving methods to keep from borrowing against Medicare? Shouldn't we stop blaming a well-funded program that works, and look to where the real problems lie?
*This figure was estimated by comparing the number of taxpayers in the lower 4 tax brackets and the median income in those tax brackets. This estimate is intentionally lower than what was likely actually collected; however, actual statistics on the total Medicare tax collected annually are not in the public domain.
