Social security, Medicare, in trouble

[lawpoke87]

We have $6T in spending and new tax increases slated for this year but not a single dime or revenue source addressing this quickly approaching cliff.

Social Security to become unable to pay full benefits sooner than previously estimated

The government issues annual trustees reports on Social Security and Medicare.

www.marketwatch.com

 

[astonmartin708]

We have $6T in spending and new tax increases slated for this year but not a single dime or revenue source addressing this quickly approaching cliff.

Social Security to become unable to pay full benefits sooner than previously estimated

The government issues annual trustees reports on Social Security and Medicare.

www.marketwatch.com

Need to reduce healthcare costs and increase contributions for retirement. I don’t support further increases to benefit ages. At a certain point we’re forcing people to work beyond their prime contributory years.

 

[lawpoke87]

Need to reduce healthcare costs and increase contributions for retirement. I don’t support further increases to benefit ages. At a certain point we’re forcing people to work beyond their prime contributory years.

I know I sound like a broken record on this topic but the longer we wait the more drastic the required changes. Need to see something in the next year or two regarding social security. I have zero hope regarding health care costs. The ACA was suppose to reduce those costs. Haven’t seen any meaningful reduction which would help the Medicare fund.

 

[astonmartin708]

I know I sound like a broken record on this topic but the longer we wait the more drastic the required changes. Need to see something in the next year or two regarding social security. I have zero hope regarding health care costs. The ACA was suppose to reduce those costs. Haven’t seen any meaningful reduction which would help the Medicare fund.

The ACA was supposed to curb the growth rate of healthcare costs. Cost reduction was secondary.

 

[lawpoke87]

The ACA was supposed to curb the growth rate of healthcare costs. Cost reduction was secondary.

Unfortunately that really hasn’t occurred

 

[aTUfan]

Need to reduce healthcare costs and increase contributions for retirement. I don’t support further increases to benefit ages. At a certain point we’re forcing people to work beyond their prime contributory years.

eliminate giving ss/health care to non contributors.

 

[astonmartin708]

Unfortunately that really hasn’t occurred

To some degree it has. From 1990 to Obama’s first year in office National Health Spending as a % of GDP increased from 12% annually to 17% with 4.5% of that jump coming during the Bush years. From 2009-2020 we’ve gone from 17.3 to 18%. We need to work on getting that number back down to closer to 10% though.

 

[astonmartin708]

eliminate giving ss/health care to non contributors.

That’s a lot of elderly widows you want eating dog food. The golden girls would have looked very different in your world view.

 

[astonmartin708]

I do wonder how much of these statistical increases are due to the size of the Baby Boomer Generation becoming geriatric.

 

[TULSARISING]

That’s why it is so important to invest in retirement EARLY, and invest in a way were you don’t count on social security, also invest in Non retirement mutual funds from an early age to have enough to retire early and you can live off of that before you can withdraw from your IRA

 

[lawpoke87]

To some degree it has. From 1990 to Obama’s first year in office National Health Spending as a % of GDP increased from 12% annually to 17% with 4.5% of that jump coming during the Bush years. From 2009-2020 we’ve gone from 17.3 to 18%. We need to work on getting that number back down to closer to 10% though.

GDP isn’t the best indicator due to recessions (see 2009). Take a look at the chart of healthcare expenditures in adjusted dollars in that time period. If anything we’ve seen an
increase in the rate of spending. Yes…an aging population certainly isn’t helping. I would point out that we’ve known this was coming for 50 years and have done nothing.

How has U.S. spending on healthcare changed over time? - Peterson-KFF Health System Tracker

This chart collection explores National Health Expenditure (NHE) data from the Centers for Medicare and Medicaid Services (CMS).

www.healthsystemtracker.org

 

[aTUfan]

That’s a lot of elderly widows you want eating dog food. The golden girls would have looked very different in your world view.

ss was a program where you pay in while you were working and then get it back when you retire.

 

[aTUfan]

lets see,
the gov took money from my paycheck each week for ss. now ss is running out

if i had been able to save that same amount in my own account with simple interest, i would still have a healthy amount

 

[astonmartin708]

I

GDP isn’t the best indicator due to recessions (see 2009). Take a look at the chart of healthcare expenditures in adjusted dollars in that time period. If anything we’ve seen an
increase in the rate of spending. Yes…an aging population certainly isn’t helping. I would point out that we’ve known this was coming for 50 years and have done nothing.

How has U.S. spending on healthcare changed over time? - Peterson-KFF Health System Tracker

This chart collection explores National Health Expenditure (NHE) data from the Centers for Medicare and Medicaid Services (CMS).

www.healthsystemtracker.org

If anything recessions should make the Net Health expenditure look even worse. As the GDP denominator went down during the recession, the expenditure numerator would have tended to stay constant or even rise. The real issue is that GDP hasn’t been growing enough to offset the rise in healthcare costs, and the rate of healthcare cost growth was too much.

Also, that chart doesn’t predate 2010 when healthcare cost inflation was absolutely bananas.

 

[astonmartin708]

lets see,
the gov took money from my paycheck each week for ss. now ss is running out

if i had been able to save that same amount in my own account with simple interest, i would still have a healthy amount

You still do have a healthy amount. That’s what social security is for. They weren’t saying the system was bankrupt. They were saying that rates might have to be cut.

 

[astonmartin708]

One interesting thing… as of June of this year close to 83% of randomly surveyed hospitals (n=100) weren’t compliant with the price publishing law that went into effect under Trump.

Some are even purposefully not complying and trying to make it seem like they’re doing “customers” a favor.

 

[lawpoke87]

I

If anything recessions should make the Net Health expenditure look even worse. As the GDP denominator went down during the recession, the expenditure numerator would have tended to stay constant or even rise. The real issue is that GDP hasn’t been growing enough to offset the rise in healthcare costs, and the rate of healthcare cost growth was too much.

Also, that chart doesn’t predate 2010 when healthcare cost inflation was absolutely bananas.

If you start your GDP comparison in a recession year (2009) then your starting point will be artificially low. As such, you will have a artificially high GDP growth rate as the economy gets back up to speed. Thus affecting your comparison.

That link had several charts going much further back than 2010. There was no flattening of the chart during the last ten years.

 

[astonmartin708]

If you start your GDP comparison in a recession year (2009) then your starting point will be artificially low. As such, you will have a artificially high GDP growth rate as the economy gets back up to speed. Thus affecting your comparison.

That link had several charts going much further back than 2010. There was no flattening of the chart during the last ten years.

I didn't start my comparison in 2009. I started it in 1990. Also, there is literally a chart in that link that says...

Health spending growth has slowed, and is now more on pace with economic growth​

From 1970 through 1980, the average annual growth in the U.S. economy was 9.3% per year, compared to health spending growth of 12%. Although health spending growth has since moderated, it generally continued to outpace growth of the economy, though by somewhat smaller margins in recent years. The periods from 2010 through 2013, and 2016 through 2018, however, saw an average annual growth rate in health expenditures similar to growth in GDP. Health spending did pick back up in 2014 and 2015 with the coverage expansions of the Affordable Care Act and growth has been stable in the years since.

In recent years, spending on hospitals, physicians, and prescriptions has slowed to a similar pace​

The rate of growth for medical services (e.g. services provided by physicians/clinics or hospitals) varied by service type until recent years. During the 1970s, growth in hospital expenditures outpaced other services, while prescriptions and physicians/clinics saw faster spending growth during the 1980s and 1990s. Between 2010 and 2019, average spending growth on prescription drugs and physicians/clinics was 4.3% and 4.7%, respectively. Spending grew at a similar pace for hospitals (4.4%).

 

[lawpoke87]

Curious…why are you tying health care expenses to GDP and not in terms of inflatikn adjusted dollars or median income. Health care costs are paid for the most part by individuals. Median income or inflation adjusted dollars would be a much more applicable standard of comparison. GDP would make more sense on an expenditure which comes entirely from the general fund.

 

[aTUfan]

You still do have a healthy amount. That’s what social security is for. They weren’t saying the system was bankrupt. They were saying that rates might have to be cut.

that why i want a private account that i control.

 

[aTUfan]

I go back to my original question of bho mandate to purchase HI.
How do you get the guy living under a bridge, to buy HI? the answer is, add it to his taxes. OOPS!!!, he doesnt pay taxes. now what?

 

[astonmartin708]

Curious…why are you tying health care expenses to GDP and not in terms of inflatikn adjusted dollars or median income. Health care costs are paid for the most part by individuals. Median income or inflation adjusted dollars would be a much more applicable standard of comparison. GDP would make more sense on an expenditure which comes entirely from the general fund.

Because a significant portion of the expenditure on healthcare isn’t made out of private pockets. It’s in the form of Medicare / Medicaid.

 

[astonmartin708]

I go back to my original question of bho mandate to purchase HI.
How do you get the guy living under a bridge, to buy HI? the answer is, add it to his taxes. OOPS!!!, he doesnt pay taxes. now what?

That’s the entire point. The rest of us subsidize that person because if we don’t then he goes to the emergency room and gets expensive emergency treatment rather than cheaper preventative treatment.

 

[astonmartin708]

that why i want a private account that i control.

The point is that there was a time when everyone was expected to save for their own retirement, and many, many, many seniors were forced to live in squalor. We changed that through SS.

We would be the only world power that doesn’t have some sort of care for the elderly.
You act like we’re the only country doing this. Not providing for those that weren’t able to save enough to take care of themselves in their old age would put us on the level of third world countries.

 

[lawpoke87]

Because a significant portion of the expenditure on healthcare isn’t made out of private pockets. It’s in the form of Medicare / Medicaid.

It’s less than half. That said, revenue / taxes for Medicare come from payroll taxes and have zero to do with GDP. Therefore, a comparison with median wages would be a much better standard when judging price increases. GDP can increase by 5% but if wages which are the foundation of those revenue collections increase by 1% the increase in costs greatly outweigh the increase in wages. Might I suggest a comparison with payroll tax collections for the Medicare portion and median wages for the private insurance and out of pocket part. Either way I don’t believe GDP is the proper measure stick.

 

[astonmartin708]

It’s less than half. That said, revenue / taxes for Medicare come from payroll taxes and have zero to do with GDP. Therefore, a comparison with median wages would be a much better standard when judging price increases. GDP can increase by 5% but if wages which are the foundation of those revenue collections increase by 1% the increase in costs greatly outweigh the increase in wages. Might I suggest a comparison with payroll tax collections for the Medicare portion and median wages for the private insurance and out of pocket part. Either way I don’t believe GDP is the proper measure stick.

I believe it is the proper measuring stick because it is the total amount our society is putting toward medical costs out of the amount of all of the production of the economy. The real problem is that looking at the GDP without knowing how the median compares to the average masks the fact that a significant portion of the total goods and services of our economy is being consolidated by a certain subset of our population.

What it’s saying is that, in reality, the level of our funding of medical services should look like ____ to our society… in actuality it looks different because there is a chunk of the GDP that most Americans never get to benefit from.

Medians account for what most of the population is witnessing but it masks the actual size of the data set. Comparing based on the median omits the value that the wealthy of the country are soaking up. Average would be better than median.

The gap between Average income and median income is growing. This could mean that the money to bridge funding gaps in some of these programs is out there… it’s just being sequestered in bank accounts.

 

[lawpoke87]

I believe it is the proper measuring stick because it is the total amount our society is putting toward medical costs out of the amount of all of the production of the economy. The real problem is that looking at the GDP without knowing how the median compares to the average masks the fact that a significant portion of the total goods and services of our economy is being consolidated by a certain subset of our population.

What it’s saying is that, in reality, the level of our funding of medical services should look like ____ to our society… in actuality it looks different because there is a chunk of the GDP that most Americans never get to benefit from.

Medians account for what most of the population is witnessing but it masks the actual size of the data set. Comparing based on the median omits the value that the wealthy of the country are soaking up. Average would be better than median.

The gap between Average income and median income is growing. This could mean that the money to bridge funding gaps in some of these programs is out there… it’s just being sequestered in bank accounts.

We’re going to have to agree to disagree. My focus is on our citizens and their ability to pay for health care. That ability is directly tied to how much money they take home compared to what they’re spending on their health care. I’m all about a growing GDP but without wage increases it does nothing for our ability to pay our medical bills.

Fair enough?

 

[astonmartin708]

We’re going to have to agree to disagree. My focus is on our citizens and their ability to pay for health care. That ability is directly tied to how much money they take home compared to what they’re spending on their health care. I’m all about a growing GDP but without wage increases it does nothing for our ability to pay our medical bills.

Fair enough?

Oh I don’t think we really disagree. I care about what costs the majority of Americans see as well, but I also care about their incomes as well. The problem isn’t necessarily that they’re seeing too great a rate of increasing healthcare costs, it’s that their incomes have been stagnant while their healthcare costs increased… and why is that? Wealth consolidation. Not a small part of which is actually doctors ironically.

The point is that the money needed exists within our country. We just need to mandate that the dams upstream release some more significant portion of their water.

 

[cmullinsTU]

This is quasi on-topic but really a curious question. @astonmartin708 I believe you and I are similar in age, do you think we will receive any SS once we hit retirement? I personally don't think so.

I'm primarily asking because my mom is constantly complaining to me about how SS is going to run out and it isn't fair to her. She is oblivious that there's a chance I will get none of what I will contribute to SS.

 

[astonmartin708]

This is quasi on-topic but really a curious question. @astonmartin708 I believe you and I are similar in age, do you think we will receive any SS once we hit retirement? I personally don't think so.

I'm primarily asking because my mom is constantly complaining to me about how SS is going to run out and it isn't fair to her. She is oblivious that there's a chance I will get none of what I will contribute to SS.

Hmmm. What I’m afraid of is that the limitations (increasing age limits specifically l) put into place to fund SS will make it basically useless for most Americans who will have to work themselves to death. I think there will still be distributions made, but retirements will be put off years beyond what they are now. I don’t think this will happen because of a lack of ability to pay for the system, but a lack of willingness (by congress ) to take back money that has accumulated in places it shouldn’t have.

Even now, SS isn’t going bankrupt (yet) what they’re saying is that distributions will no longer be full starting in 2034. Your mom’s fear is fully unfounded. Yours is possible but improbable. You will probably get something, but the amount might not be what it should have been given a fairer system.

 

[watu05]

Keeping the cap on the the % of salary subject to social security taxes seems non-sensical since wages have basically stagnated for decades except for those at the top. I guess I'm just restating Aston's proposition that wages at bottom have stagnated in real terms while other costs, especially education and healthcare, have grown in real terms. Wages at the top have more than kept pace with inflation and add in the transfer of wealth via the tax system, and it's a game rigged against those at the bottom.

 

[lawpoke87]

We will see an increase in the retirement age as well as means testing for benefits imo. Medicare has a bigger problem than SS imo and an harder solution. Kicking the can down the road year after year is going to come back and bite us. Which brings us back to the problem of Congress and Admins governing for 2 to 4 year windows instead of the long term. Why do what’s necessary to prevent a problem 15 years down the road when the remedy will be unpopular with my constituents today

 

[cmullinsTU]

Which brings us back to the problem of Congress and Admins governing for 2 to 4 year windows instead of the long term. Why do what’s necessary to prevent a problem 15 years down the road when the remedy will be unpopular with my constituents today

I agree with this, and hope everyone (regardless of political affiliation) agrees. Politicians drive me crazy, across the board, because they make short-term decisions to get re-elected that create long-term negative impacts. I have no solution to it, longer terms may help but then you run into being stuck with people bad at their job in an office for too long. I suppose that is still better than what we have now (unless we have a bunch of Marjorie Taylor Greene's and Lauren Boebert's).

 

[cmullinsTU]

Hmmm. What I’m afraid of is that the limitations (increasing age limits specifically l) put into place to fund SS will make it basically useless for most Americans who will have to work themselves to death. I think there will still be distributions made, but retirements will be put off years beyond what they are now. I don’t think this will happen because of a lack of ability to pay for the system, but a lack of willingness (by congress ) to take back money that has accumulated in places it shouldn’t have.

Even now, SS isn’t going bankrupt (yet) what they’re saying is that distributions will no longer be full starting in 2034. Your mom’s fear is fully unfounded. Yours is possible but improbable. You will probably get something, but the amount might not be what it should have been given a fairer system.

All great points. I too suspect the age limits will continue increasing to the point that we won't receive much and not have a long retirement period to enjoy.

I have until the 2050s before I can retire, so I'm working with the assumption that I won't receive any benefits and saving for retirement with that assumption. However, I know many people don't have that luxury.

 

[astonmartin708]

We will see an increase in the retirement age as well as means testing for benefits imo. Medicare has a bigger problem than SS imo and an harder solution. Kicking the can down the road year after year is going to come back and bite us. Which brings us back to the problem of Congress and Admins governing for 2 to 4 year windows instead of the long term. Why do what’s necessary to prevent a problem 15 years down the road when the remedy will be unpopular with my constituents today

Totally agree.

 

[astonmartin708]

All great points. I too suspect the age limits will continue increasing to the point that we won't receive much and not have a long retirement period to enjoy.

I have until the 2050s before I can retire, so I'm working with the assumption that I won't receive any benefits and saving for retirement with that assumption. However, I know many people don't have that luxury.

I’m working under the same assumption just to be fiscally conservative. Anything I do get will be gravy.

 

[aTUfan]

The point is that there was a time when everyone was expected to save for their own retirement, and many, many, many seniors were forced to live in squalor. We changed that through SS.

We would be the only world power that doesn’t have some sort of care for the elderly.
You act like we’re the only country doing this. Not providing for those that weren’t able to save enough to take care of themselves in their old age would put us on the level of third world countries.

the problem is using it for things it wasnt created for

 

[watu05]

They will have to make changes to keep it going. One thing to look at is the demographics. Right now boomers are retiring in big numbers which upsets the ratio between those paying in and those taking out. That ratio should swing back. Capping social security taxes on those whose incomes are shooting up while wages are not keeping pace with inflation is bad policy. But agree in general with your strategy. I don't depended on social security. It's nice, but hardly crucial.

 

[aTUfan]

They will have to make changes to keep it going. One thing to look at is the demographics. Right now boomers are retiring in big numbers which upsets the ratio between those paying in and those taking out. That ratio should swing back. Capping social security taxes on those whose incomes are shooting up while wages are not keeping pace with inflation is bad policy. But agree in general with your strategy. I don't depended on social security. It's nice, but hardly crucial.

just use it as intended, and congress give back what it took for their pet projects.

 

[TUMU]

I've been paying into Soc Sec and Medicare since I was 14. That's a long time ago.
I've contributed a lot of money over the years.
The better not screw me, as I'm close to drawing. Waiting until full Soc Sec Retirement age.
Hope it works out for everyone, regardless of your age.