View Full Version : Gephardt, Dean, and fixing Medicare
09-29-2003, 07:46 PM
Richard Gephardt on the Sept. 28 "Meet the Press" attacked Howard Dean for some statements he made about Medicare (which Gephardt posted on www.deanfacts.com ). Dean apparently said Medicare is "the worst federal program."
Gephardt, in an earnest attempt to garner an AARP endorsement, defended Medicare, repeating several times, "I think it's a great program," and, if I recall correctly, "one of the best, if not the best, federal program." (Are MTP transcripts available for free?)
My economics textbook mentioned some stats:
- 30% of all costs are incurred by people in the last year of their lives (a problem that can't exactly be fixed without a time machine of some sort)
- It has led to higher prescription drug costs
- It will run into the same problems as Social Security when the baby boomers retire
Is Medicare a good system? "The worst federal program"? Somewhere in between? I've got several decades before I'm eligible, but soon I'll see the 2.9% coming out of my income and I wonder whether it's worth it or wasted.
09-29-2003, 08:20 PM
Two words: Means testing. The elderly make up the wealthiest sector of society. Why should they get universal socialized benefits, paid for by taxes on the poorest? It's regressive, expensive, and distortionary.
Why should poor working people pay for Bill Gates' health care? Why should Gates receive a government cheque every month?
In my ideal world, we'd means-test these programs, then reduce payroll taxes to the amount needed only to cover the newer, smaller benefits. Then take the difference, and make it go into mandatory private retirement plans.
And it's too bad that Dean backed off his age-70 minimum retirement age, because he was exactly right. Back when the retirement age was set at 65, people were only expected to live to 72. So the government was only on the hook for seven years of benefits. Now the average lifespan is up close to 80, and by the time the boomers get up there, it'll probably be 85. Retirement at 65 means people get to spend 20 years of their life being completely supported by the state, and to me that's simply unacceptable.
If people want to retire earlier than 70, fine. Let them save for it. Lots of people already do this so they can retire at 55 or 60. Perhaps if people knew they wouldn't get SS until 70, people would save a little more.
09-30-2003, 09:38 AM
The problem with means testing these programs is that they could just become another form of welfare. Once you start eliminating bennefits for the "rich", and giving exemptions to the poor that is what you have.
I would also oppose this on the notion that you would be subsidizing bad behavior. If we want for people to save for their own retirement we shouldn't punish those who do save. If I max out my IRA every year and retire with a million dollars in the bank, I don't get benefits. However, my co-worker who went on a vacation every year and retires with nothing gets paid by the system for his health care. This is rewarding the behavior that we are trying to stop. All this will do is increase dependancy on the government.
09-30-2003, 01:20 PM
I've never understood why it's a good idea for the government to give people money just because the people are old. Everyone knows that at some point they will get old and not be able to work at some point. If a person wants to have food and a place to live when they are no longer able to generate income through their labor, then they should save some money up while they can generate income.
09-30-2003, 03:29 PM
Originally posted by Debaser
The problem with means testing these programs is that they could just become another form of welfare. Once you start eliminating bennefits for the "rich", and giving exemptions to the poor that is what you have. Entirely true, but I think Medicare should be another form of welfare. Same with Social Security. Means testing for both programs would ensure that I am not paying for Bill Gates (as Sam Stone points out).
Originally posted by Debaser
I would also oppose this on the notion that you would be subsidizing bad behavior. If we want for people to save for their own retirement we shouldn't punish those who do save. If I max out my IRA every year and retire with a million dollars in the bank, I don't get benefits. However, my co-worker who went on a vacation every year and retires with nothing gets paid by the system for his health care. This is rewarding the behavior that we are trying to stop. All this will do is increase dependancy on the government. Also true, but unavoidable.
It is quite similar to federal aid to students. Those whose parents did not save for their college fund wind up getting more financial aid than those who did.
The trick is to limit benefits so that it is not a better deal to be on Medicare/Social Security than to support yourself.
I have never run the numbers, but I would bet if we means-tested Social Security, we could reduce the tax load and allow or compel people to save for their retirement.
10-01-2003, 04:26 PM
Dean clarified his remarks this morning on TV by stating that while he feels Medicare is a good program, it is poorly managed and a bureaucratic mess. Keep in mind that Dean was a practicing doctor and has first-hand experience with the program.
10-02-2003, 12:05 AM
If you means test, it will sharply cut costs. Much if not most of that money will end up going to the rich in tax cuts, so they still get back what they paid in.
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