The problem with that reasoning is that you put in $152.78 a month from the very beginning of joining the system. The contribution rates have changed over time. In 1966 the rate was .350 of income. In 1973 it was 1 percent. In 1981 it was 1.3% and from 1986 onwards it has been 1.450.
In any of these scenarios, the taxpayer would have come out about the same at worst, and way ahead at best, to have invested that 55K in the market, with a lot more choice for how his health care was run.
The reality is that the vast majority of the public does not have the fiscal discipline or the resources to put that sum of money aside for future healthcare costs. Also, under Mecicare, the spouse is eligible even if he/she never made any contributions.
Further, if it is viewed as insurance, not an investment, no one pays a monthly premium their insurance company hoping “they will get back what they paid in,” they pay it knowing (hoping) that they will get back *more* than they paid in if there is a catastrophic occurrence in their lives. Otherwise they would simply save the money themselves, or not bother.
In most cases. people buy insurance (auto, flood, wind, hail, etc.) hoping they never have to use it. Healthcare is different. They know they will use it. And 9 out of 10 Medicare recipients carry Medigap insurance to cover the costs Medicare doesn't.
Unfortunately. people have come to expect that their insurance should cover all costs. Government involvement has fueled that expectation. Healthcare insurance would be much cheaper if we had higher deductibles. Obamacare has raised deductibles, but it has also expanded covered services and taxpayer subsidies. And it has expanded the Medicaid rolls where all expenses are covered.
But any thoughtful person should have realized from the inception that Medicare was neither an investment nor an insurance program, but a forced Ponzi scheme with kickbacks and votes on the line for the enforcers. Medicare and SS are Ponzi schemes. You are making my point. Today's seniors are at the top of the pyramid. We get much more out than we contributed. Our children and grandchildren will not be as lucky. They will see reduced benefits and higher taxes.
We need to find a way to scrap it while honoring previously made payments, not kick the can further down the road.
Never happen. Medicare has become so embedded that there is no political will to change it. The politicians will have to come up with a solution that saves the system. There are some ways of doing it, but they are all painful to various constituencies. But something must be done or Medicare and SS will bankrupt the country consuming the entire federal budget. Right now, Medicare and SS consume 41% of the federal budget and it is growing as 10,000 baby boomers retire every day for the next 20 years,
Thank you, belatedly, for several good counterpoints.
The first one, of course, troubled me a bit, but I didn’t have time to try to make a formula that accounted for increasing the savings over time to match the Medicare rates. It is a rabbit trail in any case.
I had forgotten altogether the family eligibility issue.
You are correct, we simply can’t afford the program. I fear that only a cataclysmic reset will accomplish any sort of return to sanity on many fronts.