Medicare is not an investment program. The government is not getting compound interest on your contributions, which do not belong to you. Medicare is a pay as you go system with today's workers paying for today's retirees. It has been running in the red since 2008 with more money being paid out than received in taxes.
Getting more than three times what you paid into the system in inflation adjusted dollars is a good deal. That will not be the case for our children and grandchildren. By 2030 Medicare will only be able to pay 85% of the costs having depleted its supply of non-market US T-bills aka IOUs. Benefits will, by law, have to be cut. SS is in a similar situation.
How many people would be investing the money if there was no Medicare? In 1966 the contribution for an individual for HI was .350. For those at the lower end of the economic ladder, they are getting far more than three times their contributions.
I understand that Medicare is not an investment program, but it is money that is taken from you that you “could” have invested had the government not taken it.
The fact that most people wouldn’t have the self control to actually invest the money if they were allowed to keep it shouldn’t be the deciding factor. By that reasoning, the government should just take all our money, since most people cant be trusted to spend it all correctly.
The point I was trying to make was to “pretend” that the funds we give to the government for Medicare are actually set aside in a long term CD that pays 5% interest by the government on our behalf, and that when needed we can draw funds from that account to pay for a certain amount of our medical bills.
*** I know that is not at all what the program actually is***
But, the point I was trying to make was that when you look at it that way the amount that we get back is more comparable to what we put in.