Happy New Year! 2011 is the first year of phased in “free” health care, thanks to ObamaCare. In this spirit, a recent Associated Press report is worth quoting: “You paid your Medicare taxes all those years and think you deserve your money’s worth: full benefits after you retire. Nearly three out of five people say […]

Evasions Surrounding Medicare

by | Jan 31, 2011 | medicare, POLITICS

Happy New Year! 2011 is the first year of phased in “free” health care, thanks to ObamaCare.

In this spirit, a recent Associated Press report is worth quoting: “You paid your Medicare taxes all those years and think you deserve your money’s worth: full benefits after you retire. Nearly three out of five people say in a recent Associated Press poll that they paid into the system so their benefits shouldn’t be cut. But a newly updated financial analysis shows that what people paid into the system doesn’t come close to covering the full value of the medical care they can expect to receive as retirees … Many workers may believe their Medicare payroll taxes are going for their own insurance after they retire, but the money is actually used to pay the bills of seniors currently on the program. That mistaken impression complicates the job for policymakers trying to build political support in coming months for dealing with deficits that could drag the economy back down.”

“Mistaken impression” is the important phrase here. Medicare persists due to a sense of justice. “I paid into this system, so I should get back what I paid.” This is how the Medicare system was sold, in the first place. The problem with this line of reasoning is that it evades two crucial facts. One, people get Medicare whether they “pay into” the system or not. Medicare is an entitlement whether you contributed millions of dollars in payroll taxes, or whether you never contributed anything. In fact, if you choose to never work a day in your life, you’ll still get Medicare at 65 — or much younger, if you can get a physician or psychologist to say you have a drug or alcohol problem you’re helpless to control.

The second evasion underlying Medicare is what’s pointed out in the AP report: You get way more back than you ever paid in. This is a recipe for a never-ending, always expanding deficit. Those who complain that government spending is out of control must consider health care spending above all else. On our current course, government will eventually have to spend everything on health care. The demand for health care will never cease, and it will only grow exponentially as the population ages. This is not Obama’s fault, or Bush’s fault — other than the extent to which they promote these programs, thereby fostering the lies and evasions. The bankruptcy of Medicare is inherent to the program itself, part of its very nature.

People who claim, “That Obama and those Republicans in Congress, they have to get that Medicare program fixed” are simply fools. You can’t “fix” a program where those who pay into it get back way more than they ever paid into it. In a free market, no private insurance company would ever have allowed such a thing to happen. It would have taken responsibility every step of the way, making sure there’s a rational balance between the desire of the company’s stockholders to make a profit, and the needs of the policyholders to obtain the specific benefits they purchased in their plan. Government messed up that private market by regulating insurance companies, forcing them to act other than the way insurance companies would have acted in a free market. Under Medicare, government simply turned health care into a gigantic billion-dollar giveaway in which the population pays way less into the system than the system provides.

Sure, Medicare could be “stabilized” by raising payroll taxes. Democrats have been trying their darndest to raise those taxes, and will likely succeed when Republicans cave in as they always do, in the end. But demand for medical care under Medicare is only going to increase, especially as ObamaCare kills off private insurance by the middle or end of this decade, and all of the population has to be covered by government.

What then? One-hundred percent tax rates for everyone, with all of the tax money going to Medicare? Obviously not. The only other option is what ObamaCare has already started: Rationing. For concrete details on what that means in practice, don’t check out places like Great Britain or Canada where socialized medicine is already the law of the land. Check out the United States in 2020 or, or 2015.

Can ObamaCare be stopped? Theoretically, yes. But only if the fraud and contradiction of Medicare is confronted — not just by politicians, but by patients.

Dr. Michael Hurd is a psychotherapist, columnist and author of "Bad Therapy, Good Therapy (And How to Tell the Difference)" and "Grow Up America!" Visit his website at: www.DrHurd.com.

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