AUDIO: Listen to Day 2 of the Supreme Court Oral Arguments

Full audio and transcript of day 2 of the Oral Arguments at the Supreme Court have been released. Ari Melber, Mike Sacks of the Huffington Post and NBC News Justice Correspondent Pete Williams will be here to talk about what happened.

Read more

Paging Dr. Smartphone: Could Digital Advancements Lead to a Medical Revolution?

We have smartphones and tablets that already go with us everywhere. Why aren’t we using them to keep us healthier, and communicate more effectively with our physicians? Dr. Eric Topol joins us

What if those devices had the potential to make us healthier, and communicate better with our physicians?

Read more

Auction 2012: The Health Care Racket

The point of seeing a doctor – or being one – should be to improve health. After all, besides your mother or spouse, who do you count on to care about your well-being more than your doctor does?

Read more

Who Are You Calling a Greedy Bastard?

Our political system is being sold at auction. Legislative policy and regulation is being catered to the highest bidder, and we are witnessing the greatest exodus of wealth and production from our shores in the history of the United States. In short, we are a nation being controlled by Greedy Bastards. But what is a Greedy Bastard?

Read more

The Impracticality of Compromise

The Nation’s Ari Melber shares his thoughts on America’s complicated relationship with political compromise.

Democrats, GOP clash over spending cuts

Rep. Anthony Weiner, D-N.Y., shares his thoughts on the Democrats’ new proposals to end the budget crisis.

 

Getting More than They Pay For

Often on my show I talk about how the spiraling costs of health care is one of the main reasons for our current budget problems.  Never is this more evident than in the growing costs for Medicare.  As this article below shows, these costs have expanded way past what the program was built to pay.  To me, the crucial challenges will be reducing health care costs overall through a truly competitive health care system and finding the revenue to help pay for the health care of generations that have done so much to help build this great country.  A good place to start?  Right here.

Have Seniors Really Paid for Their Medicare Benefits?

Patrick Appel at the Daily Dish picks up on yesterday’s post showing that most seniors will receive significantly more in Medicare benefits than they ever paid in Medicare taxes, undercutting the claim—coming from Republicans, believe it or not—that President Obama’s proposed Medicare cuts are unfair to seniors, who have “paid for their benefits.” (E.D. Kain also weighs in.)

Appel raises the good point that the figures I presented yesterday are only for someone who actually survives to retirement age. “Senior citizens can get slightly more out of Medicare than they put in while not bankrupting the country because many workers will not live long enough to collect payments.” That’s true. But how big an effect does it have?

To check, I effectively repeated my prior calculations, but on a mortality-adjusted basis. That is, I start with a person who is 21 years old. I then construct a stream of taxes through age 64 and Medicare benefits from age 65 through 100. Each dollar figure is then multiplied by the probability of being alive at that age. Taxes at age 22, for instance, are multiplied by 0.999, since there’s a near certainty that a 21-year-old will live to age 22, but benefits at age 95 are multiplied by only 0.08, since there’s only around an 8 percent chance that a 21-year-old will survive to age 95. These mortality-adjusted taxes and benefits are then converted to present values to account for interest.

What’s the result? The typical 21-year-old as of 1965 would have paid around $62,290 in Medicare taxes (versus $64,470 on a non-mortality adjusted basis) while receiving around $140,346 in benefits (versus $173,886 on a non-mortality adjusted basis). So Appel’s point clearly has merit.

That said, the broader point still stands: in my original calculations, a new retiree in 2009 would have paid Medicare taxes equal to around 37 percent of his expected benefits. Adjusted for the chance of dying before retirement, that share rises to only 44 percent. So even with reasonable adjustments for mortality, the typical retiree today has paid for less than half the Medicare benefits he can expect to receive over his lifetime. Importantly, rising life expectancies will tend to increase benefits more than taxes, making today’s deal better over time.

 

Email Dylan

Speaking Engagements, Interviews, Issue Advocacy, drop Dylan a line...

Stay connected with Dylan