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How Do You Spell Medicare?

September 2, 2017

Recently I was leaving a public library in New York City.  An elderly guy, in other words, someone my age, said to his female companion “How Do You Spell Medicare?”  He then supplied the answer; “Lyndon Johnson.”  I had the impression he was praising what he considers a wonderful program.

From his point of view it is wonderful; the average male in his seventh decade receives a subsidy of $285,000. (Source: “Spending Beyond Our Means,” Jagadeesh Gokhale, Table 3, page 11.)*

Has he considered who pays for this subsidy?  Then it might not be so wonderful; we are bankrupting our own children with this program.

The average male in his 30’s will pay $246,000 more into the system than he receives in benefits (same citation as above.) I picked that decade because I have a son-in-law that age.  What this means is people in his decade will pay most of my subsidy and other young people will pick up the rest.

It defies imagination to think that people don’t look beyond their own subsidy to ask ‘who pays for it?’  It just comes from the government, I guess.

I have written on this theme before because I think Medicare and other entitlement programs are the single most dangerous programs we have.  Politicians want to expand these programs when they must be contracted if we are to avoid a financial crisis a couple decades down the road.  (There are always commentators predicting an imminent, Greek-like collapse for us but more considered economists give us more time.)

I’ll be gone by the time this financial collapse takes place, so what do I care?  Well, I have a daughter.

*I picked males because the author breaks down statistics by age and gender.  Women and men have different financial outcomes under Medicare, as do people of different ages.  The consistent theme is that today’s elderly receive a huge subsidy.

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