Only Part of the Story

Some five or six years ago we wrote a piece on benefits of Medicare. We showed that the fallacy issued by the Right that the Taxpayer is funding all benefits is utter nonsense, at least for a significant portion of the recipients. Recently we further showed that a significant portion, 10-15%, actually are underwriting the ACA recipients under the new programs.

So along comes what appears to be baseless assertions from the alleged Right Wing folks at Heritage.

They state:

Have senior citizens really “paid for” the Medicare and Social Security benefits they enjoy in retirement?  Many believe so. But for the vast majority, the answer is – unequivocally- No. Federal entitlement payroll taxes and general revenues finance Medicare and Social Security benefits on a “pay–as-you-go” basis, meaning today’s workers’ taxes fund today’s retirees. Workers’ taxes are not deposited in anything like a private sector “trust fund” today and “saved” for tomorrow’s benefits.

Now one must rem,ember that for Medicare:

1. One pays 3% of the Gross Income for say 45 years.

2. If one continues to be productive one not only pays an additional 3% for the rest of ones life then:

3. One pays an excess premium on Medicare. Say your salary is $200,000 then Medicare triples your monthly payment to $360 per month.

4. Then if you sell anything you get 3% tax on any capital sale

5. Then you also have to but a Medigap and Medicare Part D plan, most of which are useless anyhow, for about $4,000 pa.

Now just what is the deal here? Well it is that Medicare negotiates the rates for reimbursement. It pays what we have calculated as about 40% of the actual cost.

So when I see comments like this, comments which in my opinion are both unbalanced and lacking in factual analysis, I can say that both Left and Right are purveyors of what is less than factual. Pity!