# Why do you think Medicare is or might be in financial trouble? Too many seniors living too long?  Or



## helenbacque (Jun 12, 2017)

being too unhealthy?  Or simply poor bookkeeping?  What do you think?  

I believe that part of the reason is that Congress has used the Social Security Trust Fund (Medicare's parent) as its own personal piggy bank, funding budget shortfalls to make themselves look like they were doing their job.  But even that would probably not be a problem had they been properly addressing the deduction cap.

Our Medicare system is not now nor was it ever an entitlement although Washington has intimated for years that it was.  Medicare was a contract the American government made with its citizens ..." if you work hard and give us some of your money; we will put it into a *TRUST* *FUND.*  We will *save* it, invest it *wisely *and then return some of it to you when you become too old or too sick to earn a living."  A promise, a contract, insurance plan.    But not an entitlement.

Simply stated, It was a plan funded by a deduction of a percentage of one's salary and the deduction amount had a yearly cap, a fixed amount that limited total deductions for a single year.  A fair system .... earn more, pay more but only up to a fixed maximum amount.  Through the years, salaries have risen, costs have risen but the deductible amount cap has not kept the same pace.  Currently only the first roughly $120,000 *of anyone's salary *- the millionaire or the pauper - is subject to the deduction.  Had the cap been raised over the years to keep up with salaries and costs, the fund would be healthy. The cap has been raised in pennies while costs and salaries have risen in dollars ...  never enough to balance out the expenditures.  Why?  Because most of Congress has been hog-tied for the past 29 years by Grover Norquest and his Taxpayer Protection Pledge.

Who is Grover Norquest?  To those of you addicted to long, constipated 'cut and paste' passages, you can Google him for full story but essentially Grover and his organization, Americans for Tax Reform, oppose all forms of tax increase and he has successfully bludgeoned, badgered, battered and beaten almost all Republicans in power over the past 30 years into signing his Pledge.  Picture it  - all those old, white guys pinky-swearing to never ever, under any circumstances raise taxes one iota even if their country and its citizens all go up in flames.  Grover promises political ruin to any who sign and then renege. Many believe he has the power.  Any of his pledge signers should be voted out of office and poor Grover, he should be ashamed to call himself American.

No offense to loyal Repubs and my apologies for lengthy rant and rave?  I AM very much interested in your thoughts.  

Cheers!


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## HarryH (Jun 12, 2017)

It is absurd to think that money was to be saved and invested in this so called trust fund. That matter was settled in the 1930s with the SS trust fund. Congress could raise taxes via any method, due to the Common Defense and General Welfare clause, but cannot appropriate such tax for a specific item... it must be for the general welfare. Hence from the beginning Social Security taxes were placed in the general revenue fund. The trust fund for S.S. is an accounting method which was devised to track the money being collected and the amount being disbursed via S.S. 

The difference being the "trust fund". There was never any money in that trust fund only special non marketable instruments or bonds. Which are fancy IOUs. Those IOUs are given an interest rate similar to treasury bonds. 

The same applies to Medicare, Transportation and a host of other "trust" funds. 

Secondly, there is no cap on wages regarding Medicare tax.


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## helenbacque (Jun 13, 2017)

> Secondly, there is no cap on wages regarding Medicare tax.


No, there is no cap on wages.  The cap is on the amount of your wages that is *subject* to the tax.  IOW the first $120,000 you earn in a calendar year will be subject to that particular tax.  Anything above that is exempt from this tax.  If you earn $120,000 a year, all of it will be subject to the tax.  If you earn $1,000,000 a year, only the first $120,000 will be taxed.   If the cap was raised to say $130,000 a year it would amount to only a very small increase for the better paid workers but would provide s substantial increase for the Trust Fund.


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## HarryH (Jun 13, 2017)

helenbacque said:


> Secondly, there is no cap on wages regarding Medicare tax.




No, there is no cap on wages.  The cap is on the amount of your wages that is *subject* to the tax.  IOW the first $120,000 you earn in a calendar year will be subject to that particular tax.  Anything above that is exempt from this tax.  If you earn $120,000 a year, all of it will be subject to the tax.  If you earn $1,000,000 a year, only the first $120,000 will be taxed.   If the cap was raised to say $130,000 a year it would amount to only a very small increase for the better paid workers but would provide s substantial increase for the Trust Fund.[/QUOTE]

https://www.irs.gov/publications/p15/ar01.html


> There is no wage base limit for Medicare tax.



https://www.shrm.org/resourcesandto...tion/pages/fica-social-security-tax-2017.aspx



> For highly compensated employees, Medicare takes a larger bite. Under a provision of the Affordable Care Act, the employee-paid portion of the Medicare FICA tax subject to a 0.9 percent Additional Medicare Tax on amounts over a statutory threshold. The threshold annual compensation amounts that trigger the Additional Medicare Tax are:
> 
> 
> $250,000 for married taxpayers who file jointly.
> ...



https://www.irs.gov/uac/additional-medicare-tax-what-you-need-to-know

You might wish to reconsider what you _think_ you know.


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## Trade (Jun 13, 2017)

Medicare is a great program and provides health care for the most costly individuals in our society ie those over 65 and those with disabilities at a much lower cost than private insurance companies could. The payroll taxes on it are a pittance and could easily be raised. But no. Pissing away trillions of dollars in foreign wars seems to be a much higher priority than providing healthcare so forget about that It would also help if Medicare were to be allowed to negotiate prescription drug prices instead of allowing the Drug companies to charge whatever they feel like. That is something Trump promised to address. Yet I haven't heard anything about that lately. Maybe if the Democrats would call off their Witch hunt and press him on this issue instead we might get something constructive done. But no, they would rather pick a fight than do anything to keep the drug companies from ripping us off. Because after all they are some of their biggest donors. 

Here's another thing that runs up Medicare costs. I have known people that never had any health Insurance and therefore let healthcare issues fester until they turned 65 and got on Medicare. That's like running your car 100,000 miles without any oil changes or basic maintenance and then bringing it in for servicing.   

 I could go on and on but that's enough of a rant for now.


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## HarryH (Jun 13, 2017)

Trade said:


> Here's another thing that runs up Medicare costs. I have known people that never had any health Insurance and therefore let healthcare issues fester until they turned 65 and got on Medicare. That's like running your car 100,000 miles without any oil changes or basic maintenance and then bringing it in for servicing.



Which, in a nutshell, is the biggest problem with ACA. Not going for single payer and then watered down penalties to the point of non-existence.


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## Trade (Jun 14, 2017)

HarryH said:


> Which, in a nutshell, is the biggest problem with ACA. Not going for single payer and then watered down penalties to the point of non-existence.



In Medicare we already have a single payer program in place that is working fine for over 50 million people. To me the obvious solution is to expand Medicare to cover everyone. It's an easy fix.


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## HarryH (Jun 14, 2017)

Trade said:


> In Medicare we already have a single payer program in place that is working fine for over 50 million people. To me the obvious solution is to expand Medicare to cover everyone. It's an easy fix.



Not sure I would suggest Medicare is magnificent, but it would have been better. So why wasn’t it expanded in the first place?


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## helenbacque (Jun 14, 2017)

HarryH said:


> Not sure I would suggest Medicare is magnificent, but it would have been better. So why wasn’t it expanded in the first place?



Every advanced country in the world has some form of universal health care for its citizens but our Congress refuses to even consider it  because it  would interrupt the wealth stream that is making private health care and pharma industries obscenely rich.  Health care lobbyists paid by the industry are among the busiest in Washington.


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## Don M. (Jun 14, 2017)

Medicare is an excellent program.  Unfortunately, it is in conflict with our "For Profit" system, and the two programs are headed for a major confrontation.  The "For profit" system, with its extremely costly insurance company, drug company, and medical providers infrastructure, is pouring huge sums of money into the politicians pockets in an attempt to keep us paying over 17% of the nation's GDP into their already Bloated pockets.  Obamacare is/was a half a$$ed attempt to reach a compromise, but that attempt is quickly collapsing.  I think costs will continue to soar in the next few years, until the people Demand a sensible national health care system similar to what the rest of the civilized world uses.  2018 is already shaping up to have another substantial rise in premiums, and many parts of the country are seeing less and less competition amongst insurance companies...thus leading to major increases in those areas.  

Both Medicare and Social Security have failed to take into account the rising longevity in our population, and funding for those programs has failed to keep up with demand.  If those programs are going to continue to be viable for much longer, there will have to be some meaningful tax increases.  A complete move to a SP-UHC system would require a substantial increase in taxes....but that would be more than offset by NOT having to pay for a bloated For Profit system.  After all, we are on the hook for over 17% of this nations GDP, under our present system...whereas most other nations get along nicely for 8 to 10% of their GDP.  For most people, such a move would save them thousands of dollars a year....higher taxes, being offset by NOT having to pay for ridiculous insurance/drug/treatment costs.  

But...our "For Profit" system is Not Totally to blame for all these rising costs.  Our population is loaded with millions of people who seem to assume little or no responsibility for their own health and well being.  They eat junk, get little or no exercise, put on gobs of excess weight, and consequently, run up huge medical costs when their bad habits eventually catch up with them.  

If our health care system is going to survive and be affordable, it is going to require major steps...Both in our medical system, AND the attitudes of our population.  "Treatment" is going to have to be replaced with "Prevention".


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## Trade (Jun 14, 2017)

Don M. said:


> Medicare is an excellent program.  Unfortunately, it is in conflict with our "For Profit" system, and the two programs are headed for a major confrontation.  The "For profit" system, with its extremely costly insurance company, drug company, and medical providers infrastructure, is pouring huge sums of money into the politicians pockets in an attempt to keep us paying over 17% of the nation's GDP into their already Bloated pockets.  Obamacare is/was a half a$$ed attempt to reach a compromise, but that attempt is quickly collapsing.  I think costs will continue to soar in the next few years, until the people Demand a sensible national health care system similar to what the rest of the civilized world uses.  2018 is already shaping up to have another substantial rise in premiums, and many parts of the country are seeing less and less competition amongst insurance companies...thus leading to major increases in those areas.
> 
> Both Medicare and Social Security have failed to take into account the rising longevity in our population, and funding for those programs has failed to keep up with demand.  If those programs are going to continue to be viable for much longer, there will have to be some meaningful tax increases.  A complete move to a SP-UHC system would require a substantial increase in taxes....but that would be more than offset by NOT having to pay for a bloated For Profit system.  After all, we are on the hook for over 17% of this nations GDP, under our present system...whereas most other nations get along nicely for 8 to 10% of their GDP.  For most people, such a move would save them thousands of dollars a year....higher taxes, being offset by NOT having to pay for ridiculous insurance/drug/treatment costs.
> 
> ...



Excellent post Don.


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## Grumpy Ol' Man (Jun 15, 2017)

Some excellent posts re our accelerating problem funding Medicare and Social Security.  We ARE a Nation that has a burgeoning population of seniors.  The miracles of modern medical technology see us live longer and live better longer.  But, our bodies do wear out and we end up running up costs in prescription drugs, doctor bills, and hospital costs.  I feel there are some relatively easy means of solving the problem with Medicare and Social Security being underfunded... none of which will ever see the floor of Congress.

1.)  Raise the maximum wage for contributions.  Take those brackets up 10% and we have the revenue stream sufficient to cover much of the escalating costs of keeping the senior citizens covered.  Won't happen due to Congress being entirely in the upper wage brackets and those politicians being bought and paid for by the wealthy.
2.)  Legalize voluntary euthanasia.  Our medical industry keep people alive even though their pain must be medicated to the extent of not even knowing who they are or where they are.  If you could eliminate the last week to 10 days as people's organs shut down and they finally expire, the savings would be tremendous.  This could be one with the protection of requiring more than one medical doctor to sign off and more than one family member.  The patient would need to have filed paperwork in advance that he/she did not want to be kept in a comatose state once that "committee" decided recovery and an extended quality life was not possible.  Won't happen due to religious pressure on Congress.
3.)  Pass legislation that makes it a criminal offense for physicians to accept any dollars from drug companies.  There are significant "kickbacks" paid by drug companies to physicians when prescribing drugs.  We see lots of "over-medicating" today.  Have two acquaintances who have experienced over-medication.  One friend's mother was in constant pain and oblivious to where she was.  She did not seem to be in that bad of shape, physically.  He finally took her to a second doctor in another community.  When that M.D. saw the amount of medication the lady was taking each day, he told them that was the problem.  At least half of the prescribed medications were either unnecessary or were in conflict with each other.  He immediately recommended a "dry out" period by cutting almost half the medications out.  It was just like a drug addict going through withdrawl.  In about 3 weeks, the lady began feeling better.  That has been over 6 months ago and it is amazing how "healthy" she is once off much of the medication.

We have allowed politicians and suppliers to the medical industry to determine our care.  The people are no longer in charge.  Medical costs.... Medical treatment has become money driven instead of treatment driven.


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## HarryH (Jun 15, 2017)

> Raise the maximum wage for contributions.



I would agree on social security, but there is no maximum on Medicare.


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## helenbacque (Jun 15, 2017)

HarryH said:


> I would agree on social security, but there is no maximum on Medicare.




I never said there was.


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## HarryH (Jun 15, 2017)

helenbacque said:


> i never said there was.


lol!!


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## Knight (Jun 15, 2017)

Trade said:


> In Medicare we already have a single payer program in place that is working fine for over 50 million people. To me the obvious solution is to expand Medicare to cover everyone. It's an easy fix.



Sounds like an easy fix. If the thread title asking about Medicare being in financial trouble is an indication that people think all is not well what then? The what then deals with adding the entire country on a single payer system. 

No reason to load up this reply with stats on welfare & the cost but if interested this helps
http://www.cheatsheet.com/money-car...stats-about-public-assistance.html/?a=viewall

The reason for that is to point out that contributing to the cost to supply revenue for a single payer system isn't going to be from those already in need of help. If the perception that Medicare is experiencing funding problems after being in place for so long.  Is it really logical to think it would be an easy fix to cover everyone?


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