Published DateThe Affordable Care Act, aka "ObamaCare", is, essentially, an expansion of Medicare to all citizens. It was thought that by forcing younger people to buy health insurance, that would prop up the financially strapped Medicare. You see, by its own admission, Medicare claims to have $36 trillion in un-funded liabilities. Add to that, ten thousand "baby boomers" are retiring every day and going on the Medicare rolls. Those numbers will continue for the next 19 years. And government appears to have made it easier for those who have exhausted their unemployment benefits, to file for Social Security disability. After 18 months, they too, will qualify for Medicare benefits. If there's $36 trillion in un-funded liabilities now, how much more will it be when the entire citizenry is on it?
If you make something cheaper, or if you make it easier to do, more of it will happen. With that in mind,and considering we already have a physician shortage, and considering many of the seats in our medical schools are occupied by foreign students here on temporary student visas who will return to their home countries after becoming physicians, and acknowledging that many physicians have said they will take early retirement when "ObamaCare" kicks in, how do you think we will accommodate the increasing demands on the medical network? Long waiting lines? Rationing? Services denied to the elderly?
Another issue is that Medicare essentially regulates prices. Doctors and hospitals can set their fees. Today, those fees can be paid by those not on Medicare. However, if the patient is on Medicare, the fee paid to the doctor is set by the government. For example, the physician may charge $105 for an office visit. Medicare may only allow $65 for that visit. Medicare pays 80 percent of the $65 and the patient or his secondary insurance pays the balance. For surgeries, tests, and hospital stays, the reduction in allowable charges is even more pronounced. Prior to the Affordable Care Act, doctors and hospital could recover some of these lowered reimbursements from the amounts paid by non-Medicare patients. As that capability ceases, how does the medical community maintain its financial health? Does the entire medical system become part of the government? Just think, the government, which has Medicare with $36 Trillion in un-funded liabilities, running the entire system and expanding that number to infinity. Perhaps we should get China's permission first.
When Social Security was introduced back in the mid 1930's, there were sixteen people paying into the system for every one collecting a benefit. Today, there are less than three people contributing for every one receiving. Also, back at its inception, life expectancy was 57 years and eligibility for benefits was 65 years of age. As you can see, it looked like a good deal for the government . . . making benefits available eight years after people were expected to have died. Well, things have changed. Today life expectancy is 76 years for men and for women it is 81, but the full retirement age for Social Security has only increased by one year, to age 66.
In 1964 President Johnson needed monies to fund his "Great Society" programs. Until then, Social Security funds were kept separate from general funds. For the first time Social Security contributions were borrowed and mixed with general funds. Government securities in the amount of the borrowed Social Security monies were put into the proverbial lock box. Those transactions didn't impact Social Security until the annual payout of benefits exceeded the annual receipt of funds. That has happened and will only get to be more of an issue as those baby boomers continue to retire at the rate of 10,000 per day for the next 19 years. In order to redeem those government securities, the government must sell new securities to get the funds necessary to redeem them. While the transaction doesn't increase the debt or deficit, it may increase the interest paid and it will certainly transfer the burden of paying off the newly purchased securities to a future generation.
In 2010, the net present value of Social Security's un-funded liabilities was estimated at $15 trillion. Added to the Medicare un-funded liabilities of $36 trillion, we have a staggering total of $51 trillion dollars being dumped on future generations . . . our children and grandchildren and their children. While there is no easy fix for Medicare and Social Security, each must be addressed soberly and changes made. The addition of the Affordable Care Act into the mix may be the proverbial straw on the camel's back.
These are but two of our spending issues. Don't you think it's time they get addressed honestly?
(Bob Meade is a Laconia resident.)