Last week, the online version of this newspaper ran an informal survey, asking, “Should the federal government make cuts in the Medicare program to cut the deficit?” The overwhelming response was “no”. Sure, it’s unscientific, but with a 61 percent no vote, that’s a landslide. Don’t cut my bennies, bro.
Even if legislators wanted to, it’s too hard to make cuts to that program. If any of them say “I want to cut Medicare benefits”, they’ll be on the fast-track to becoming private citizens again.
But the reality is we’re going to have to cut the benefits there, or raise taxes significantly. If you are married and will be 65 this year, and made an average wage of about $43,000 recently, you’ll have paid about $55,000 in Medicare taxes over your lifetime. Your benefits will be about $343,000, on average.
I don’t need to tell you that we can’t keep doing this.
The first solutions proposed to solve this problem included reducing the benefits by not paying for some expensive procedures at the end of a person’s life expectancy. Prominent politicians quickly labeled this solution “death panels” to get their name in the paper, and to score brownie points with elderly voters.
The latest proposal is to give vouchers to senior citizens, and let them choose which procedures they want to pay for. If you want to use your vouchers for a week-long Viagra party instead of kidney dialysis, well, that’s your choice. Crafty seniors will likely end up using the vouchers for less urgent needs and will go to the emergency room for the medical needs that are covered there (my retirement is already planned out, as you can tell).
It sounds good on paper. You’ll get a choice of where your medical money goes, and not the big mean nanny government. The theory is, individuals will make their own decisions on their health care, and the market forces will drive down the costs. Wal-Mart sells more stuff because their prices are cheaper, and people are getting a lot more stuff for the same money than they are at Nordstrom’s. Politicians are hoping that the story will repeat itself in the medical field.
Except that we’re looking at the equation incorrectly. The stuff at Wal-Mart is cheaper because Wal-Mart uses its huge purchasing power to clobber its suppliers for the lowest prices. You and I as individuals cannot clobber the medical providers with a fistful of vouchers, but 45 million of us as a single entity can, which is how Medicare works today.
Plus, Medicare already has a voucher-type program called Medicare Advantage. Only about 25 percent of seniors choose this option, and guess what; the program actually costs more than the standard Medicare program. About 13 percent higher. The only way we’ll save money with vouchers is if they aren’t big enough to pay for the treatments.
Maybe that is the answer; I don’t know. It’s either that or raise everyone’s taxes. Medicare cost us about $793 billion last year, which is more than one-third of the amount of taxes the federal government took in.
Most of the defensive opinions I’ve read about this issue talk about the “promises made to our seniors” that the social insurance programs will be ready to carry them into their golden years. I don’t know that benefits were actually promised, but I am sensitive to the needs of impoverished senior citizens. Between my wife and me, three out of our four parents will rely solely on Medicare for their health coverage. Two of them have no savings and rely completely on Social Security for income.
But we have to make a stand here. We can’t keep kicking this problem to the next generation. We either have to pay more money to continue this kind of health care, or have the conviction to hand out pain pills to our seniors and say our goodbyes.
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