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Politics vs. retirement

By Jennie L. Phipps · Bankrate.com
Wednesday, April 6, 2011
Posted: 4 pm ET

The retirement pundits are all taking aim at the proposal by U.S. House Budget Committee Chair Paul Ryan to dismantle Medicare and Medicaid in favor of a voucher system that could be used on the open market.

I don't want to be left out, so here's my 2 cents: Boomers -- those are the people born between 1946 and 1964 -- are about 75 million strong. Unlike other segments of the population, they vote. That gives this proposal a snowball's chance on a July day in South Florida of passage.

So don't spend a lot of time worrying about this plan as you do your retirement planning. But just for the record -- in case you haven't read Ryan's proposal -- here's what the squawk is all about:

  • Medicaid pays 62 percent of long-term care because with nursing homes costing an average of $72,000┬áper year, even the well-heeled blow through their money and turn to Medicaid for help.
  • Medicaid pays the Part B premiums, deductibles and copays for 5 million Medicare recipients who otherwise couldn't afford them.
  • Two-thirds of money spent on Medicaid goes to people older than 65 and people with disabilities. The remaining one-third provides medical care for the poor -- most of them children.

Ryan's plan for Medicare would affect people 54 and younger. People older than that would continue to participate in Medicare as it is now.

I calculated what Medicare costs people today who don't get help paying it, and it comes to about $10,000 per year for a couple -- at a minimum. Would Ryan's plan push that up or down? My guess is that the winners would be people who are able to pay because it would give them more choice and control. The losers would be people who live on modest incomes -- or less -- and who don't have insurance from their former employers. They could be faced with some ugly decisions.

But politics being politics, I don't think we'll ever have a chance to find out if I'm right or wrong. What do you think?

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2 Comments
rick
April 06, 2011 at 7:53 pm

Politics being politics, we (the good old USA) will soon be broke and it won't matter what some long dead politician promised you....thanks for expecting other people to pay your way....

Ash
April 06, 2011 at 6:45 pm

I think these programs will be around forever because too many people in this country vote for politicians who pander to their selfish desires.

Medicare and Medicaid are part of the problem, not part of the solution. Government doesn't have to be profitable to pay the bills, and this has pushed medical costs higher and has encouraged rampant fraud.

The health care legislation that was passed last year went in entirely the wrong direction, because it sought even more ways to pay for medical care instead of addressing the costs. What the government *should* do:

- Address tort reform to help free physicians from exorbitant insurance premiums, and from the thought that one more unnecessary test might protect them from litigation.

- Address unreasonable charges, which are evident when comparing the hospital bills of an insured patient and one who is not insured.

- Allow insurance companies to compete in the open market, across state lines, to extend the range of products that consumers can choose from.

- Reserve what would be left of Medicare and Medicaid for the truly needy, which was the well-intentioned reason for these programs. Government assistance should be the last resort for citizens who have exhausted their own means, not a first resort for those who can still afford to pay their cable television bills.

My views will be embraced by many conservatives and almost universally despised by those who expect the government to be the solution to their lives' every problem. Let the vitriolic comments begin . . .