And I love the comments about how some politicial wasted the money and that is not the seniors' fault. Seniors were not on some other planet over the past 30 or 40 years. They voted for these politicians. They received the benefit of deficit spending--low taxes and middle class entitlements. Now they want to say its not their fault.
The final point is this notion that Social Security and Medicare were "promised" to Seniors. B.S. If seniors want what they were "promised", we can go back to the baseline spending for Medicare for when it was first enacted. If we do that, we will spend about $120 billion on Medicare for the next 10 years. I'm OK with that if seniors are. Same with Social Security. If we want to go back to spending the baseline projections from 1967 or even 1983, fine. But your check is going to be cut by about two-thirds.
Medicare Solvency: How to Get There
By Paul Winfree
August 9, 2011
Medicare Financing: The Basics
The traditional Medicare program is made up of three parts: (1) hospital insurance (Part A) for hospital inpatient procedures; (2) supplemental medical insurance (Part B) for doctors visits and outpatient procedures; and (3) prescription drug coverage (Part D). Medicare beneficiaries also have the option of buying subsidized private insurance (Part C) to replace the services covered by Parts A and B.[6]
The expenses incurred by Part A beneficiaries are paid by a 2.9 percent tax on wages and salaries of people currently working.[7] For those who have worked and paid payroll taxes for at least 10 years (or had a spouse who did so) there are no premiums for Part A. Many seniors view the taxes paid during their working life as pre-funding their hospital insurance. In reality, many seniors collect much more in Medicare benefits than they pay in Medicare taxes. A two-income coupleboth earning average wages throughout their lifetimescan expect to collect 3.2 times as much in Medicare benefits as they paid in taxes.[8]
Unlike Part A, Parts B and D are funded primarily through premiums paid by beneficiaries, and from the general revenues of the Treasury (income taxes, etc.).[9] For instance, just over 25 percent of Part Bs expenditures are covered by premiums. The remainder is almost entirely funded by transfers from the general revenues (that is, government debt or income tax revenue).
Each part of Medicare operates with a trust fund, though it is entirely an accounting exercise rather than an actual account accumulating income to pay to beneficiaries at a future date. In the past, Part A has brought in more revenue from the Medicare tax than has been paid out in benefits in a given year. This trend has reversed, though, as Medicare spending per beneficiary has increased and the population has aged. In fact, Part A benefits paid out have exceeded and will continue to exceed income for the foreseeable future. As Medicare outlays exceed income, Part A draws down on the balance of the trust fund to cover the difference. By 2024, Part A is projected to be permanently in deficit.....
Read more at:
http://origin.heritage.org/research/reports/2011/08/medicare-solvency-how-to-get-there