Chartered Financial Consultant


Medicare Rocks


I turn sixty five (65!) this month. This designates me as officially OLD, but it does provide my biggest birthday perk since I turned 21. I’m now covered by Medicare. This will reduce my health insurance premium by several hundred dollars a month. Gone is my $3,500 deductible health plan with premiums that have increase by over 20% per yearfor the past five years. The provisions of Medicare reduces the likelihood of such premium inflation andlowers barriers to switching coverage or companies.


The current insurance-company-centric health-care funding system is a disaster. ObamaCare was a reaction to some of its largest flaws: pre-existing conditions, rigid underwriting requirements, multiple administrative layers and exploding premiums. I wish that President Obama had proposed that all Americans be covered by Medicare, a system with a sound structure of Medicare that has worked well for nearly fifty years.


Instead, we are being phased into the Patient Protection and Affordable Care Act (PPACA-a lousy acronym), a compromised, complicated, and constantly-threatened program known as ObamaCare.


So what is Medicare? Here’s what Wikipedia has to say:


Medicareis a national social insuranceprogram, administered by the U.S. federal governmentsince 1965, that guarantees access to health insurance for Americans aged 65 and older and younger people with disabilities end stage renal diseaseand Lou Gehrig’s Disease.As a social insurance program, Medicare spreads the financial risk associated with illness across society to protect everyone, and thus has a somewhat different social role from for-profit private insurers, which manage their risk portfolio by adjusting their pricing according to perceived risk.


Yikes, that sounds a lot like Socialized Medicine. I’m sure every Fox News-watching conservative has opted out of this dangerous program.


In 1965, Congress created Medicare under Title XVIII of the Social Security Act to provide health insurance to people age 65 and older, regardless of income or medical history. Before Medicare’s creation, only half of older adults had health insurance, with coverage often unavailable or unaffordable to the other half, because older adults had half as much income as younger people and paid nearly three times as much for health insurance. Medicare also spurred the racial integration of thousands of waiting rooms, hospital floors, and physicianpractices by making payments to health care providers conditional on desegregation.


Forty-eight million Americans are covered by Medicare. Many of those would be bankrupt without it. Medicare and Social Security are in urgent need of adjustments to make them sustainable for future generations, but math-challenged politicians of both parties are unwilling to accept that expenses must be controlled ANDtaxes must be raised to fix these issues.


Here’s a quote from “Why we need to fix Social Security now,” by Mary Beth Franklin in InvestmentNews(June 10, 2013):


By 2033, reserves in the Social Security trust fund will be exhausted and revenue from payroll taxes will be sufficient to pay just 77% of promised benefits. The disability trust fund is in worse shape, projected to exhaust its surplus in just four years, at which point it could pay just 80% of promised benefits. And Medicare is now expected to limp along through 2026, two years later than previously projected.


Medicare and Social Security are sacred social contracts between various generations of Americans. As with the budget deficit, these issues get worse if neglected. Share your thoughts with your elected representatives.


Bob Dreizler

Bob Dreizler