How are Social Security and Medicare sustainable?

[toastedbread]

For the record, I am counting on receiving nothing from either and paying in more than I am currently.

I don't understand how these programs will be sustainable when the average life expectancy is continually increasing and could approach 100 or even 110 in a decade?

We clearly need to raise the retirement age to 70 or 75 at a minimum?

Also, I don't buy the argument that recipients are getting what they paid for when they are living far beyond projected?

The other major issue is that Social Security does not perform well enough in their investments to account for any of this!

Also, I've read there aren't enough young people to pay for all of the boomers?

Someone please help to explain how we don't simply have a ticking time bomb due to life expectancy?

I'm off to India tomorrow for a wedding so I'll check back in a couple of days.

 

[TheOriginalHappyGoat]

For the record, I am counting on receiving nothing from either and paying in more than I am currently.

I don't understand how these programs will be sustainable when the average life expectancy is continually increasing and could approach 100 or even 110 in a decade?

We clearly need to raise the retirement age to 70 or 75 at a minimum?

Also, I don't buy the argument that recipients are getting what they paid for when they are living far beyond projected?

The other major issue is that Social Security does not perform well enough in their investments to account for any of this!

Also, I've read there aren't enough young people to pay for all of the boomers?

Someone please help to explain how we don't simply have a ticking time bomb due to life expectancy?

I'm off to India tomorrow for a wedding so I'll check back in a couple of days.

Social Security is fixable. A combination of increasing the cap on taxes paid, raising the lift expectancy, and maybe doing some means-testing would probably do it.

Medicare isn't salvageable, in my opinion, although I'm willing to listen to arguments otherwise. But I don't think it's unsalvageable because of Medicare. Medicare is the most efficient health insurance that exists in this country. Medicare isn't salvageable because it's part of a broader health care system that is itself on the road to implosion. The only long-term solution, I think, is to transition to true universal health care. Basically, take the Medicare system, and remove all age restrictions. We can still outsource the actual nitty-gritty to insurance companies, so they don't go out of business. But we need to address the cost of health care to fix the entire system, and the best (only?) way to do that is to have a single payer negotiating the best prices possible.

EDIT: Consider this as evidence the problem is health care as a whole, not Medicare specifically: 17.1% of our GDP in 2013 went to health care. 2nd in the world, behind Tuvalu. 4th in the world was the Netherlands, at 12.9%. That's a 25% reduction in health care costs between us and the country just two spots behind us.

 

[toastedbread]

Social Security is fixable. A combination of increasing the cap on taxes paid, raising the lift expectancy, and maybe doing some means-testing would probably do it.

Medicare isn't salvageable, in my opinion, although I'm willing to listen to arguments otherwise. But I don't think it's unsalvageable because of Medicare. Medicare is the most efficient health insurance that exists in this country. Medicare isn't salvageable because it's part of a broader health care system that is itself on the road to implosion. The only long-term solution, I think, is to transition to true universal health care. Basically, take the Medicare system, and remove all age restrictions. We can still outsource the actual nitty-gritty to insurance companies, so they don't go out of business. But we need to address the cost of health care to fix the entire system, and the best (only?) way to do that is to have a single payer negotiating the best prices possible.

EDIT: Consider this as evidence the problem is health care as a whole, not Medicare specifically: 17.1% of our GDP in 2013 went to health care. 2nd in the world, behind Tuvalu. 4th in the world was the Netherlands, at 12.9%. That's a 25% reduction in health care costs between us and the country just two spots behind us.

Ok, but do you realize how exponentially people's life expectancies will change over the coming decades? We aren't talking about years, but perhaps 10's of years of additional life. And the medical treatments will be exponentially expensive too. As I understand, a huge portion of $ is spent during the final year of an expired old timers life. Someone who should call it quits already.

 

[TheOriginalHappyGoat]

Ok, but do you realize how exponentially people's life expectancies will change over the coming decades? We aren't talking about years, but perhaps 10's of years of additional life. And the medical treatments will be exponentially expensive too. As I understand, a huge portion of $ is spent during the final year of an expired old timers life. Someone who should call it quits already.

There is certainly a discussion to be had about the value of extending life past a certain point.

Society may decide that it is better to make the end of life comfortable, rather than to extend it.

But I think the issues you bring up are in accord with my comment, that it's not Medicare specifically that is the problem, but the health care system as a whole. There is no better alternative for insurance, excepting universal single-payer health care. The problems that are making health care too expensive are largely working independently of the insurance system. Not entirely, but largely. The amount of money spent for end-of-life care is certainly part of it.

 

[NPT]

Social Security is fixable. A combination of increasing the cap on taxes paid, raising the lift expectancy, and maybe doing some means-testing would probably do it.

Medicare isn't salvageable, in my opinion, although I'm willing to listen to arguments otherwise. But I don't think it's unsalvageable because of Medicare. Medicare is the most efficient health insurance that exists in this country. Medicare isn't salvageable because it's part of a broader health care system that is itself on the road to implosion. The only long-term solution, I think, is to transition to true universal health care. Basically, take the Medicare system, and remove all age restrictions. We can still outsource the actual nitty-gritty to insurance companies, so they don't go out of business. But we need to address the cost of health care to fix the entire system, and the best (only?) way to do that is to have a single payer negotiating the best prices possible.

EDIT: Consider this as evidence the problem is health care as a whole, not Medicare specifically: 17.1% of our GDP in 2013 went to health care. 2nd in the world, behind Tuvalu. 4th in the world was the Netherlands, at 12.9%. That's a 25% reduction in health care costs between us and the country just two spots behind us.

The problem I have with most people who want to means test SS is that they want to test based on what a person has rather than looking at what a person has made. They want to penalize a person who has never made more than $60,000/year but has sacrificed to save for their retirement but still give SS to a person who has made millions (for example sports players) but didn't plan.

 

[CO. Hoosier]

Social Security is fixable. A combination of increasing the cap on taxes paid, raising the lift expectancy, and maybe doing some means-testing would probably do it.

Medicare isn't salvageable, in my opinion, although I'm willing to listen to arguments otherwise. But I don't think it's unsalvageable because of Medicare. Medicare is the most efficient health insurance that exists in this country. Medicare isn't salvageable because it's part of a broader health care system that is itself on the road to implosion. The only long-term solution, I think, is to transition to true universal health care. Basically, take the Medicare system, and remove all age restrictions. We can still outsource the actual nitty-gritty to insurance companies, so they don't go out of business. But we need to address the cost of health care to fix the entire system, and the best (only?) way to do that is to have a single payer negotiating the best prices possible.

EDIT: Consider this as evidence the problem is health care as a whole, not Medicare specifically: 17.1% of our GDP in 2013 went to health care. 2nd in the world, behind Tuvalu. 4th in the world was the Netherlands, at 12.9%. That's a 25% reduction in health care costs between us and the country just two spots behind us.

Let's see if I understand this . . . .

Medicare isn't salvageable; so the way to fix it is to expand its reach to all of us. Sounds like the guy who says he loses $1 on each widget; when asked how he can survive in business he answers: "volume my boy, volume".

If you see some flavor of universal coverage and single payor as the panacea, then we MUST toss the fee for service model. Fee for service is the biggest problem with Medicare. Even bigger than demographics. The legal profession figured this out decades ago when it adopted the public defender system. We need the same model to provide health care for those who qualify for assistance, and let the rest of the population continue to pay for their own care, through insurance or otherwise.

 

[TheOriginalHappyGoat]

Let's see if I understand this . . . .

Medicare isn't salvageable; so the way to fix it is to expand its reach to all of us. Sounds like the guy who says he loses $1 on each widget; when asked how he can survive in business he answers: "volume my boy, volume".

If you see some flavor of universal coverage and single payor as the panacea, then we MUST toss the fee for service model. Fee for service is the biggest problem with Medicare. Even bigger than demographics. The legal profession figured this out decades ago when it adopted the public defender system. We need the same model to provide health care for those who qualify for assistance, and let the rest of the population continue to pay for their own care, through insurance or otherwise.

Come one, I wasn't that unclear. I said that Medicare is unsalvageable only in the sense that it's part of a broader health care system that is headed for disaster. So, no, you didn't understand it.

 

[CO. Hoosier]

Come one, I wasn't that unclear. I said that Medicare is unsalvageable only in the sense that it's part of a broader health care system that is headed for disaster. So, no, you didn't understand it.

Ha. Your CO.H paradigm is at work here

I didn't disagree with your diagnosis. But I think your treatment is bad medicine.

 

[TheOriginalHappyGoat]

Ha. Your CO.H paradigm is at work here

I didn't disagree with your diagnosis. But I think your treatment is bad medicine.

No, just trying to get you to phrase things more carefully.

 

[CO. Hoosier]

No, just trying to get you to phrase things more carefully.

Your point was the sloppy one

You said the status quo for Medicare is unsustainable. I agree. How to make is sustainable is the issue about which we differed.

 

[TheOriginalHappyGoat]

Sigh...

Quoting me:
But I don't think (Medicare's) unsalvageable because of Medicare. Medicare is the most efficient health insurance that exists in this country. Medicare isn't salvageable because it's part of a broader health care system that is itself on the road to implosion.

 

[hoot1]

I agree with CoH when he writes,

If you see some flavor of universal coverage and single payer as the panacea, then we MUST toss the fee for service model.

I would argue the fee-for-service model is a natural outcome for insurance whereby policies are written to cover services with certain fees attached for these services. Then once insurance as a third party payer became the norm, health care providers adjusted their practices to conform to this model. Given this model, why wouldn't providers take advantage of the situation as long as third party insurers covered the expenses? More became better even if wasn't entirely necessary. One of the excuses for ordering services which may not be necessary is to avoid litigation.

One area I don't entirely agree with CoH is when he suggests fee-for-service is a bigger problem than demographics. In my view, the two problems are somewhat entwined when it comes to reducing costs. Our aging population along with a comparatively few people with a few types of health problems are responsible for a large amount of health care expenditures. Furthermore disease and old age don't always fall on the shoulders of those who have the assets and income to help pay for their care. On top of this our politicians usually show concern for our seniors and our poor. We can say the right to health care doesn't exist, but history tells me when push comes to shove we treat health care as a right. Another troublesome demographic is treating our rural population which can be far from urban hospitals and clinics which are best suited to dealing with patients on a team basis versus the traditional GP fee-for-service found in rural areas.

Thus the shift from fee-for-service may be an easier transition than dealing with all the problems associated with demographics, i.e., the old, the less affluent, and those living far from urban hospitals and clinics.

 

[Rockfish1]

I agree with CoH when he writes,

If you see some flavor of universal coverage and single payer as the panacea, then we MUST toss the fee for service model.

I would argue the fee-for-service model is a natural outcome for insurance whereby policies are written to cover services with certain fees attached for these services. Then once insurance as a third party payer became the norm, health care providers adjusted their practices to conform to this model. Given this model, why wouldn't providers take advantage of the situation as long as third party insurers covered the expenses? More became better even if wasn't entirely necessary. One of the excuses for ordering services which may not be necessary is to avoid litigation.

One area I don't entirely agree with CoH is when he suggests fee-for-service is a bigger problem than demographics. In my view, the two problems are somewhat entwined when it comes to reducing costs. Our aging population along with a comparatively few people with a few types of health problems are responsible for a large amount of health care expenditures. Furthermore disease and old age don't always fall on the shoulders of those who have the assets and income to help pay for their care. On top of this our politicians usually show concern for our seniors and our poor. We can say the right to health care doesn't exist, but history tells me when push comes to shove we treat health care as a right. Another troublesome demographic is treating our rural population which can be far from urban hospitals and clinics which are best suited to dealing with patients on a team basis versus the traditional GP fee-for-service found in rural areas.

Thus the shift from fee-for-service may be an easier transition than dealing with all the problems associated with demographics, i.e., the old, the less affluent, and those living far from urban hospitals and clinics.

Medicare is moving aggressively away from fee-for service. Its market power will likely lead private insurance to follow suit.

A more important reason we pay about twice as much as other developed countries is that our government doesn't weigh in on the prices that providers charge. As a result, we pay more for each item and unit -- from prescription drugs to ambulance rides to hospital stays to medical devices. So we have a fee-for-service system that encourages providers to over-prescribe, coupled with a dysfunctional health care market in which providers have enormous market power, and our government does little to counterbalance that market power.

If you look around the world, there are various ways to address this. But every other developed country relies on some form of what conservatives deride as "socialized medicine", and they all pay a lot less than we do -- even though many of them rely as heavily on fee-for service as we do and have more pronounced demographic pressures than we do.

There is a world of evidence about what works. Unfortunately, our debates have little relation to that (or any other) evidence.

 

[Rockfish1]

Sigh...

Quoting me:
But I don't think (Medicare's) unsalvageable because of Medicare. Medicare is the most efficient health insurance that exists in this country. Medicare isn't salvageable because it's part of a broader health care system that is itself on the road to implosion.

Shorter CO. Hoosier: "Speaking of what you said, I'll change the subject."

 

[VanPastorMan]

Social Security is fixable. A combination of increasing the cap on taxes paid, raising the lift expectancy, and maybe doing some means-testing would probably do it.

Medicare isn't salvageable, in my opinion, although I'm willing to listen to arguments otherwise. But I don't think it's unsalvageable because of Medicare. Medicare is the most efficient health insurance that exists in this country. Medicare isn't salvageable because it's part of a broader health care system that is itself on the road to implosion. The only long-term solution, I think, is to transition to true universal health care. Basically, take the Medicare system, and remove all age restrictions. We can still outsource the actual nitty-gritty to insurance companies, so they don't go out of business. But we need to address the cost of health care to fix the entire system, and the best (only?) way to do that is to have a single payer negotiating the best prices possible.

EDIT: Consider this as evidence the problem is health care as a whole, not Medicare specifically: 17.1% of our GDP in 2013 went to health care. 2nd in the world, behind Tuvalu. 4th in the world was the Netherlands, at 12.9%. That's a 25% reduction in health care costs between us and the country just two spots behind us.

When you talk about, "means testing" are you saying that some people who have faithfully paid into the program will not receive the benefits they have been promised? If this is true then isn't SS just another wealth transfer program? I am for raising the age requirement. When SS started people didn't live much past 60. Obviously you can't have a program running on the 30's model in today's world.

 

[SuperHoosierFan]

When you talk about, "means testing" are you saying that some people who have faithfully paid into the program will not receive the benefits they have been promised? If this is true then isn't SS just another wealth transfer program? I am for raising the age requirement. When SS started people didn't live much past 60. Obviously you can't have a program running on the 30's model in today's world.

If, when I retire, I am in a position where I can live without whatever SS is going to pay me...by all means give it to someone who needs it even though I paid in my whole life and was promised certain benefits. This doesn't have anything to do with me being a Christian, it's just the right way to be.

 

[TheOriginalHappyGoat]

When you talk about, "means testing" are you saying that some people who have faithfully paid into the program will not receive the benefits they have been promised? If this is true then isn't SS just another wealth transfer program? I am for raising the age requirement. When SS started people didn't live much past 60. Obviously you can't have a program running on the 30's model in today's world.

I am saying that the amount of benefits you receive could be based largely on need.

 

[hoot1]

Medicare is moving aggressively away from fee-for service. Its market power will likely lead private insurance to follow suit.

A more important reason we pay about twice as much as other developed countries is that our government doesn't weigh in on the prices that providers charge. As a result, we pay more for each item and unit -- from prescription drugs to ambulance rides to hospital stays to medical devices. So we have a fee-for-service system that encourages providers to over-prescribe, coupled with a dysfunctional health care market in which providers have enormous market power, and our government does little to counterbalance that market power.

If you look around the world, there are various ways to address this. But every other developed country relies on some form of what conservatives deride as "socialized medicine", and they all pay a lot less than we do -- even though many of them rely as heavily on fee-for service as we do and have more pronounced demographic pressures than we do.

There is a world of evidence about what works. Unfortunately, our debates have little relation to that (or any other) evidence.

Rock, I wouldn't say Medicare "is moving aggressively away from fee-for service. " As this article points out, Thirty percent of Medicare’s payments are to be value-based by the end of 2016, and 50 percent by the end of 2018.

We should remind ourselves these are only goals, and my guess is the goals may not be met. It also should be noted according to the article that while Medicare has been having some success in reducing costs the rest of health care market isn't doing as well in reducing costs.

 

[Rockfish1]

Rock, I wouldn't say Medicare "is moving aggressively away from fee-for service. " As this article points out, Thirty percent of Medicare’s payments are to be value-based by the end of 2016, and 50 percent by the end of 2018.

We should remind ourselves these are only goals, and my guess is the goals may not be met. It also should be noted according to the article that while Medicare has been having some success in reducing costs the rest of health care market isn't doing as well in reducing costs.

I'd say that moving from essentially zero to 50 percent would qualify as "aggressive", but adjectives are inherently imprecise. (The press release I posted contained the same numbers as the article you linked.) In any event, CBO has persistently reduced its projections for Medicare cost growth, and real per capita Medicare expenditures are now declining. And all this progress occurred before Medicare began its move away from fee-for-service. (Meanwhile, Obamacare is costing less than CBO initially projected, -- despite the confidence of its opponents that it would inevitably cost more than expected.)

I agree that private insurance isn't doing as well as Medicare on cost containment. Indeed, that was my point. While conservatives castigate Medicare as unsustainable, in reality it's cheaper than for-profit insurance, and it's leading the way to a more sustainable system overall. This is good news -- unless you're a conservative, I guess.

 

[i'vegotwinners]

When you talk about, "means testing" are you saying that some people who have faithfully paid into the program will not receive the benefits they have been promised? If this is true then isn't SS just another wealth transfer program? I am for raising the age requirement. When SS started people didn't live much past 60. Obviously you can't have a program running on the 30's model in today's world.

VanPastor says,

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"When SS started people didn't live much past 60".

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sorry VPM, but that's just not factually true.

and the increase in average lifespan is due more to less people dying young, than old people living all much longer..


as for "wealth transfer programs", our entire economy is a wealth transfer program.

and one's wealth isn't dictated by how hard one works, or how much they contribute to society, but rather by how successful they are at getting wealth transferred to themselves.