Sorry to keep dragging this out, but I paid into Medicare for 40 years. Hefty premiums for Medicare come out of my monthly Social Security checks. I did not want the Med.D prescription drug coverage to begin with. As I said before, I think it is a sop to the pharmaceutical companies, who raised the price of my prescription immediately after I met the deductible on the additional monthly insurance premium on my plan B coverage, which is very expensive to begin with. Gotto go. Thanks for the help.
I do not doubt it as the plan does get administered by private companies, but there is a BIG government subsidy.
Medicare faces the same long term insolvency problems as does Social Security, only worse. The retirement of the “baby boom” generation, followed by the demographic decline of working age contributors, is going to bankrupt both if some major reform is not carried out. In the short run, I see the threat of terrorism as our most serious problem. Long term I see this as the biggest problem our country is facing. Great civilizations are far more likely do decay from within than be destroyed by an external enemy. This demographic problem is a global one that will bankrupt countries like a tidal wave. (It already is causing havoc in Europe) See the following article for an idea of the scope of the problem:
http://www.foreignaffairs.org/20040501faessay83307/phillip-longman/the-global-baby-bust.html
You would have been better off if you had been allowed to invest that money all those years in a private account. By now you would have a pretty healthy nest egg that would be more than enough to meet you retirement needs. During the 2006 campaign I was a policy adviser to a candidate for the GOP Vermont U.S. Congressional nomination. Here is something I wrote for him on Social Security:
According to a Cato Institute analysis, Social Security will begin running a deficit in less than 15 years — that is, it will begin to spend more money on benefits than it brings in by taxes. At that point, to continue to pay promised benefits, the program will have to draw on the Social Security Trust Fund.
Crisis deniers have made much of the trust fund recently, suggesting that it guarantees Social Security’s solvency until 2042, or even 2052, according to some projections. However, it was President Clinton — not President Bush — who pointed out that: “These trust fund balances are available to finance future benefit payments but only in a bookkeeping sense.”
Clinton’s fiscal year 2000 budget explained that trust fund assets are not “real economic assets that can be drawn down in the future to fund benefits.” Rather, these funds are “claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures.”
It is past time that we face up to the fact that our Social Security system is in dire need of reform if it is to address the needs of future retirees. I propose that any reform be rooted in an approach that gives the American people control over their own retirement savings, rather than bureaucrats and politicians in Washington D.C. My logic is simple, the average American citizen can be trusted far more wither their own retirement savings than the political class in D.C
As Cato Institute scholar Robert A. Levy points out, most people have been led to believe that the Social Security surplus can somehow be secluded in a “lock box” by using it to pay off government debt. Lower debt, so the argument goes, means lower future interest payments. Wrong. The trust fund receives interest-bearing government bonds when its surplus is commandeered to retire other government bonds. There is no net change in indebtedness and, therefore, no change in interest obligations. Yes, federal debt will be lower than it would have been if the surplus had bankrolled more government spending. That’s good; but past Social Security surpluses have been spent, not used for debt retirement. And future surpluses will soon disappear.
We need a plan that will transfer control of our retirement savings out of the hands of the political class and into our own hands while ensuring that those who have already paid into the system receive the benefits promised to them. My proposal is based on the Cato Institute’s detailed plan.
Individuals would be able to privately invest their half (6.2 percentage points) of their payroll tax through individual accounts.
Individuals who choose individual accounts will receive a recognition bond based on past contributions to Social Security. Workers choosing individual accounts will forgo accrual of future benefits from traditional Social Security.
Allowable investment options for the individual accounts will be based on a 3-tier system: a centralized, pooled collection and holding point; a limited series of investment options, with a lifecycle fund as a default mechanism; and a wider range of investment options for individuals who accumulate a minimum level in their accounts.
At retirement, individuals will be given an option of purchasing a family annuity or taking a programmed withdrawal. These two options will be mandated only to a level required to provide an income above a minimum level. Funds in excess of that required to achieve this level of retirement income can be withdrawn in a lump sum.
If an individual accumulates sufficient funds within their account to allow them to purchase an annuity that will keep them above a minimum income level in retirement they will be able to opt out of the Social Security system in its entirety.
The remaining 6.2 percentage points of payroll taxes will be used to pay transition costs and to fund disability and survivors benefits. Once, far in the future, transition costs are fully paid for, this portion of the payroll tax will be reduced to the level necessary to pay survivors and disability benefits.
This discussion will be offered in the context of payable Social Security benefits. That is, the Social Security system will be restored to a solvent pay-as-you-go basis prior to the development of individual accounts. Workers who choose to remain in the traditional Social Security system will receive whatever level of benefits Social Security can pay with existing levels of taxation.