AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (2 comments)

  1. Again – in order to make informed suggestions as to how to improve/”save” Medicare you have to start with basic facts from which to base ideas on.

    There are 4 Medicares not one.

    A, B, C, D

    Each one does something different. ALL are entirely voluntary, You have to sign up and pay premiums to receive Medicare.

    A is funded from FICA Taxes – this is a legitimate “entitlement” if you paid into it your entire working career.

    The other three, B,C and D you have to purchase and the only thing you are really “entitled” to is the right to purchase. Anyone over 65 has the right to purchase.

    B is for Medical providers and costs about 210 billion a year in taxpayer subsidies

    C – is Advantage/GAp that is not only subsidized but basically removed the 20% co-pay that original Medicare required of all beneficiaries.

    D – is subsidized drugs

    C/D were both voted on by Republicans and together they cost more than B – the original Medicare.

    Medicare overall requires a 75% subsidy with beneficiaries paying 25% and even though it is means-tested – the thresholds are ridiculous – 200K in income for single and unlimited assets.

    so someone who owns 3 homes and 6 cars will pay $100
    a month for 100% coverage as long as their retirement income does not exceed 200K a year.

    If you got rid of C and D all together except for the truly indigent and lowered the means-testing for B to be 50K a year in income and half a million in assets – then Medicare would likely be entirely self-funded.

    The problem we have with Medicare is ignorance of the program and further ignorance of which parts of the program need to be fixed and the end result is that there is no shortage of people who don’t know squat about the program – advocating essential destruction of it.

    Medicare can be reformed to preserve the most important and vital parts of it by getting serious about the co-pay and reasonable payment for drugs without using a machete to all of it.

    what we lack is reasonable ideas and what we’ve got is ham-fisted ones.

  2. If you want to know who blew up Medicare – it was the GOP under Tom Delay and George Bush who rammed through Part C and Part D. Until then, Medicare was not an out of control program. It was actually doing a better job of keeping costs under control than private plans for younger people were.

    Before the change, Medicare not only would not pay for optical, hearing or long term nursing care, it required a 20% co-pay that required seniors to have some skin in the game.

    After Part C and D were changed – senior could buy gap plans that dissolved the 20% co-pay for things like knee replacements so you had people who had up to 200K of annual income and owned 2, 3 houses paying 100.00 a month for health care that included discretionary 15K operations – paid for 100%.

    It’s ironic that now the GOP says the only way to save Medicare is to eviscerate it – as opposed to going back to revisit the Part C problem.

    I’m convinced that the vast majority of GOP who blather on and on about Medicare being out of control don’t know the first thing about the specifics much less the Tom Delay role in ramming through the Medicare additions that ultimately have contributed to the problems.

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