While we’re talking about the Olds:
Here’s your Medicare myth of the day: It turns out that a majority of Americans believe that retirees get about as much from Medicare as they pay in during their lifetimes. Or maybe even less.
As it turns out, this is precisely the opposite of the truth. The best estimate out there suggests that a single male will pay $60,000 in Medicare taxes over his lifetime and receive $170,000 in benefits during retirement.1 That’s a 3:1 benefit ratio—and the numbers are more favorable for women and way more favorable for couples. Medicare is just about the most amazing bargain imaginable. Most of us don’t come within a country mile of actually paying for all the care we get.
I’ve had a guy in his 80’s, who’s had a quadruple bypass and a bunch of other expensive procedures, tell me that he “paid for” his Medicare. This little bit of ignorance is the foundation underneath all the teabagger fairy tales about Medicare not being a “government program”. These people honestly believe that the relative pittance they’ve paid over their lives (especially considering that many of them started paying in their 40’s and 50’s) makes their Medicare something other than what they would call a “handout”.
As long as Medicare Exceptionalism persists in the minds of voters, Democrats are waging class warfare with one hand tied behind their backs. By the Republicans’ own definition, pretty much everyone over 65, otherwise know as “the Republican base”, is a moocher or a looter, as bad or worse than young bucks buying T-bones with food stamps. It’s just that their chosen conveyance is a welfare Rascal instead of a welfare Cadillac.
Botsplainer
One query about single option “medicare for all”. While there is a huge benefit to the economy of scale, given that most of the payments for all the medical issues that occur late in life are occurring at the beginning of life, are there inflation adjusted studies as to what the medicare tax rate should be in order to simply make it cover everybody while remaining solvent?
And what changes can we make to the overall number of medical providers by breaking the current overly expensive guild system, with its overlong training requirement? What compensation rates would be deemed to be appropriate and adequate, and how much butthurt whining can we expect from the medical profession by opening it up to more entrants?
different-church-lady
OK, so just how do we pull of that financial trick?
Betty Cracker
Well played.
Villago Delenda Est
It’s a darn good thing we don’t have death panels for abject stupidity, because they’d be running 24/7 processing teatards for disposal.
Villago Delenda Est
@Botsplainer:
Defund the AMA.
joes527
How does the payout compare to the amount payed in + a reasonable rate of return (assuming that the money payed in is invested, and not kept in the mattress)
Given the raw numbers, I doubt that any reasonably safe investment would even things out, but I wonder where it would end up.
greennotGreen
But what if Medicare payments were conservatively invested all those years? That would be a fairer comparison. OTOH, most people, left to their own devices, wouldn’t invest.
Marmot
Fuckin’ A. Same for those folks who receive agricultural subsidies, or whatever, then turn around and bitch about freeloaders. The problem is getting them to realize the entire citizenry pays taxes, but not all of us pay income tax.
Too bad that belief flatters their self image as society’s beleaguered makers. Gonna be hard to shake that framework.
Keith P.
I go on Medicare in January, and I’m 37. So for 15 years, I’ve paid in approximately $300/month. I’m not sure what Medicare talks my bills down to, but last I heard, my yearly medical expenses retail somewhere north of $100k.
Tommy
@greennotGreen: BS. I am 43.Between my employers and myself I’ve paid in gosh knows now much for health care. I never use it. I mean literally never used it. I feel lucky there. I mean who wants to get sick. But I also fear that when I need aid the insurance company will find a way not to pay.
Chris
@Marmot:
What makes it so ridiculous is that all these programs were originally set up in large part as “handouts” precisely for these white conservative demographics who are now bitching. A hundred years ago, the South and West were clamoring for the redistribution of Yankee money (long before any nonwhites were in the picture), and it was a big part of what finally got the ball rolling on our safety net.
Now, of course, they’ve been living with it for so long they don’t even realize it’s there. The only part of the New Deal they still notice are the taxes they grouse about, and it never occurs to them just how many things they take for granted that wouldn’t be there without them. That and fifty years of repeating to themselves and each other “I am a hardworking person who earns everything he has, and they are lousy deadbeats supported by the fucking welfare state” means they’ve internalized it too well to consider any other take on things.
JoyfulA
Sort of like the employee who kicks in $100/month on his corporate health insurance and denounces other people for not buying their own health insurance, like he does.
Villago Delenda Est
@Chris:
This is a perpetual problem. Very few understand the history (BORING!) behind all this, the process by which we got to where we are today. Every single time these blockheads bitch about some “regulation” that’s in their way to fucking over someone, they fail to realize that the regulation is in place to prevent assholes from fucking over people. They just assume that our society as it exists was created in 7 days by the baby Jeebus with no human intervention required, except for the part where “bureaucrats” and “regulators” are stepping all over the freedumb.
rikyrah
How Obamacare Could Revolutionize Addiction Treatment
Obamacare’s treatment of alcoholism and other drug addiction as
chronic diseases that must be covered by insurance plans could lead to as many as 40 million Americans entering rehabilitation programs, according to California Health Report.
Government data shows that about 24 million Americans aged 12 and older require treatment for a substance abuse issue — but only 11 percent of them received it at a specialty facility. These facilities charge an average of $4,000 for admission, and even outpatient facilities cost an average of $1,500 per course of treatment.[….]
The health law puts special emphasis on both treatment and prevention by forcing insurers to cover rehab and encouraging doctors to screen for potential addictions.[….]
http://thinkprogress.org/health/2013/09/12/2609501/obamacare-revolutionize-addiction-services/
another lurker
@joes527:
I wondered that, too. The study methodology incorporated a 2 percent real rate of return in the calculation of “lifetime value of taxes.”
daveNYC
@greennotGreen: Probably not even close to covering. You’re looking at paying in that 60k over 40 years or so, and your peak earning years are in the 30s and 40s, so that’s less time for the interest to compound.
WereBear
@rikyrah: About freakin’ time.
I have watched with horror as the people around me reach middle age… and become cash cows for the drug companies. If you complain about side effects, they have a pill for that!
Within five years many of them are taking a dozen different pills. Which tend to fight with each other and reduce what health they do have.
The Moar You Know
I’m no conservative, but doesn’t this strike anybody as a huge problem?
Tissue Thin Pseudonym (JMN)
@joes527: @greennotGreen:
From the link:
Stella B.
@Villago Delenda Est: the AMA is a lobbying group. About 1/3 of US MDs belong to the AMA. There really isn’t any “defunding” that is possible and it wouldn’t have any effect on anything were it to happen. Other than that, though, good idea!
boatboy_srq
@The Moar You Know: It’s only a huge problem if we determine that average life expectancy equals minimum life expectancy, and insist that any and every
death-extendinglife saving/extending technology/medication/device/whatever must be used in each and every possible case. This is the dark underbelly of “death with dignity” and of the Schaivo experience: part of the reason for pulling the plug on a PVS patient is the obscene cost of the care involved and the burden that cost places on whoever’s paying the bills.Of course managing those costs gets denounced as “death panels” by the same volk who conveniently forget they signed up for HMOs that are designed to do the same thing (except by some private, usually for-profit company), and because
poorOther people don’t deserve to getextended dyinglifesaving medical treatments that are the Just Rewards of The Blessed Righteous Elect.gelfling545
@WereBear: I have an understanding with my Dr. If she feels we need to add a med (other than an antibiotic or similar for a short term) we must find a med to drop. I left various ERs & CCUs carrying massive numbers of pill bottles after the deaths of my parents & 2 brothers (as you have to bring all your meds & someone has to take them away & dispose of them). I’m talking 30+ bottles of pills. I promised myself that I would never go that route. Presently in my mid 60’s I have 3 prescriptions that I take regularly, 2 of which are vitamins (D & B12 by injection). I don’t think pills will save my life and leave me with any of it worth living. I’ve seen it happen to too many others.
Several years back a friend whose mom lived out of town found that her mom seemed kind of vague & weak when they called her so they drove down to see what was happening. Going through her mom’s meds she found over 50 prescription bottles. (How can anybody even choke down that many pills?)They made an appointment with the mom’s dr who was inclined to take offense when questioned about the purpose of the meds, essentially saying “Who are you to question ME?” She replied that she was the senior medical librarian for the medical school in our city & thought she just might be able to follow along ok. The dr, somewhat taken aback then deigned to describe the purpose of each prescription & when they left his office her mom’s prescription load was reduced to 4. Indeed many were to treat effects created by other prescriptions & her mom’s vague & shaky symptoms cleared up right quick.
I think that one of the issues is that some medical personnel don’t really listen when older people tell them how they are feeling & write a lot of prescriptions just for cya purposes. For example, every year my dr feels the need to preach to me about the benefits of statins which I will not take, ever. I’ve told her more than once that she may prescribe if it makes her feel safer though I will never fill it. I guess I’m a “difficult” patient.
ThresherK
@Betty Cracker: The term “RascalBaggers” was coined that set of folks. You’ll see them riding their Medicare Rascals and wearing their tri-cornered hats and breeches at the rallies.
Dolly Llama
Could you not say the same damn thing for Social Security? I feel sure that, on average, many/most people end up getting more in SS payments after they start receiving said payments at age 62/65/70. Those who live to at least the average American lifespan, anyway.
brantl
This isn’t ignorance, when people paid in money and 15 cents then, would buy a dollars worth of goods now, THEY DID PAY FOR IT.
peter thom
@The Moar You Know: $60k deposited over a typical working life of 40 years at $1500/year compounds at 4.52% to about $170k. BTW, the SSA calculated that a single-earning couple with medium wages, born in 1943, saw a 4.59% rate of annual return. So, given the proper context, Medicare for those elderly currently receiving benefits has not cost the Treasury anything. For those on disability it’s a different story.
Gopher2b
One of the best visits I’ve ever had (for me) with my in-laws and parents was I told them they were on welfare (their term). After the pffts and umphf, I went through how much they paid in during their lifetimes and showed then showed them how they blew through that money in about 3 years of constant medical use. The look on their face when they internally acknowledged it was priceless.
ricky
Sorry mistemix. You posted a lie.
“The best estimate out there suggests that a single male will pay $60,000 in Medicare taxes over his lifetime and receive $170,000 in benefits.”
The best estimate out there suggests that a single male will pay $60,000 in Medicare taxes over his lifetime, and the government will be overcharged $110,000 for the $60,000 in services he gets from the health care service industry.
I could be off on the ratio, but not the general principle.
ricky
@ricky: I know it wasn’t your lie, BTW.
StringOnAStick
@gelfling545: You are so right; statins (and many other drugs) are grossly over-prescribed plus they have nasty side effects. The whole “cholesterol causes heart disease” hypothesis is so full of holes is should be laughed out of practice, but big pharma must be fed.
Mnemosyne
@StringOnAStick:
As I understand it, the problem with statins is the usual mission creep that happens with our for-profit drug industry — they actually are very helpful for a small population with a very specific problem, and then the drug companies start thinking, Hmmm, how can we market these to a larger patient population and make more money? and they start encouraging doctors to prescribe them to people just in case they later develop the problem the statins can help with.
Dennis Byron
@The Moar You Know:
I notice that I am not the first one in this series of comments to reassure you/disasbuse you (I can’t tell your state of mind from your comment) of the notion that you are not paying your way…
IF you are just now going on Medicare
IF you worked under the Medicare system since it was created in 1965
The lie that seniors are not paying their way on Medicare is part of the Democratic Party’s War on Seniors. However the basic initial design said the government would cover the cost of transitioning into the program all the people who never contributed or who only contributed for half their working lives. That’s where people running this War on Seniors get their 3:1 number. (You won’t see it in most rants like this blogger’s rant but the word “average” is the operative word.)
Peter Thom gave you the math on what the return would have been on the money you “contributed” over the last 50 years under any reasonable view of the investment world. But the Democratic Party lying is worse that that. The base amount ($70K average) is off by at least 100% because the people who are running the War On Seniors (Urban Institute, Wood Foundation, Harvard, Kaiser, the usual suspects) purposely fail to take into account your lifelong “contribution” to the Part B trust fund. They only count your lifelong contribution to the Part A trust fund and your contribution to the Part B trust fund once on Medicare.
They also fail to analyze the insurance as insurance and instead analyze it as if it is welfare, which is what they want us seniors to think so we’ll shut up (Thinking of Medicare as welfare is just the opposite of what LBJ promised for Medicare; that’s the reason he set it up under SS and not HEW. FDR had sold SS as insurance also and that’s the way the creators all thought of both programs. You won’t be surprised to know that Carter is the one that moved Medicare under the federal Welfare department.).
As an example of how they analyze it poorly, they do not count all the contributions to the trust funds from people who didn’t live long enough to collect. But of course all insurance is structured financially to take such unfortunate things into account (e.g., the whole discussion of getting young invincibles into the Obamacare pool). As another example, the screw-you-seniors warriors don’t split out the people like the guy who said above that he is getting Medicare at 37; perhaps he deserves some help but that is not really the Medicare insurance program.