I was looking over my Social Security statement today and noticed a few things. Most obvious was the impact of my professional education. My annual income increased ten-fold in my graduation year. Granted that compares a student’s wages (working full time during summers and other breaks, with some part time work during school), against six months as a pharmacist. Suddenly, I had money and I learned to spend it, usually unwisely, but that’s another story.
I also calculated that the amounts paid in by myself and my employers would fund my retirement for ten years, even if that money did not earn any interest or other dividends. With only modest compounded interest, it is obvious that my retirement could and should be well funded, even beyond my death. My employers and I have paid a mere $81,000 into Medicare, however. That could buy a health insurance policy for about $350 per monthly premium for ten years. How much does health insurance cost? I checked:
Average monthly premiums for individual plans by age group were: (The figures are from eHealth’s Health Insurance Price Index Report for 2016)
$152 for people under age 18
$177 for people age 18-24
$239 for people age 25-34
$303 for people age 35-44
$400 for people age 45-54
$580 for people age 55-64
So if I were in my forties, I might be OK, but really I could last about 12 years, again assuming no earnings on my contributions.
With careful planning and a frugal lifestyle, I could probably make it to 90 without either of these government programs, assuming I invested similar amounts. Fortunately, I have made additional investments for my future, as well as my children, so I’m good to go indefinitely! Unless immortality is very expensive, of course. Kidding. I am lucky to have made it this far!
One of the proposed suggestions for revising American health care is Medicare for all. It is apparent to me that after paying into Medicare for over 40 years that I could barely take care of my own health needs, and I’m pretty damned healthy. There are millions that have exhausted any funding that they may have personally contributed and are now dependent on folks like me. If we are to keep Medicare solvent and/or cover everyone then we face some huge financial hurdles. Like any other type of insurance, we will have to make sure that the money coming in is sufficient to pay the claims to be paid. Right now, we do not have that balanced equation and that must change.
First of all, we cannot pay for everything. I’ve blogged about incredibly expensive, yet hardly effective treatments, and those must be forsaken. End of life planning is essential and you may call them death panels hoping to scare people away but the costs of an unplanned, undignified death are simply unreasonable. Our efforts to eliminate fraud have met with modest success and our payment system must be rigorously reviewed and strengthened. If everyone had the same baseline coverage, the incentive to have a cohesive system would be strong and we would all be invested in seeing it succeed.
My employers and I have each paid 1.45% of my wages into Medicare. If self-employed you pay 2.9% of your net earnings. That may not be enough to sustain Medicare for all. Do we raise this contribution? Now that Citizens United has declared corporations to be people, perhaps they should start paying into Medicare and Social Security too. How should we fund the new health care model? What we will find is that our entire taxation model has been corrupted and will require overhaul also. I’d be a lot more comfortable with taxes that are encumbered for specific uses, elimination of loopholes and subsidies that are essentially corporate welfare, elimination of unnecessary redundancy in our government agencies, and finally, most importantly, a balanced budget. We must have fairness, truth and justice. When the accumulation of wealth depends on the immoral strategies of deception, corruption, conspired laws, and outright cheating, there must be a reckoning.
Get out there and make a difference!