Just when we are convinced our politicians couldn't possibly do anything more ridiculous, they manage to exceed our expectations. Last night, the Senate reached a "compromise" on the healthcare bill. The plan includes lowering the age for Medicare to 55 for the uninsured and subsidizing it. There is also a proposed private plan option overseen by the OPM Federal Employee Health Benefits Plan. It is unclear from the details released yesterday exactly who this private plan is supposed to cover. We will have to wait to for the details to be released. However, should it not work as planned, these enrollees will become part of some yet to be determined government plan.
According to a speech given by Richard W. Fisher president & CEO of the Federal Reserve Bank of Dallas, Medicare already is projected to have $86 trillion in unfunded liabilities given those alive today. Last year, according to the Government Accountability Office (GAO), Medicare Part A (hospitalization) benefits began to exceed program tax in their revenues. The difference was made up by Medicare's Hospital Insurance (HI) Trust Fund by redeeming trust fund assets. According to the 2009 Annual Reports on Social Security and Medicare, “Growing annual deficits are projected to exhaust HI reserves in 2017…In addition, the Medicare Supplementary Medical Insurance (SMI) Trust Fund that pays for physician services and the prescription drug benefit will continue to require general revenue financing and charges on beneficiaries that grow substantially faster than the economy and beneficiary incomes over time.” [Note: This is 2 years earlier than projected last year.] We already have a program the Medicare trustees reported is "unsustainable," whose eligibility age should have been raised over the years to 69 or 70 given that Americans are living over 4 years longer than they were when the program started in 1965. This is a pay as you go program. The percentage of the eligible population in 1965 was 9%; today it's 13% and in 20 years it will be 19%. As you can see, less people are working to support a greater percentage of retirees. Adding more potential beneficiaries will only help to dramatically speed up the destabilization of healthcare benefits for current beneficiaries. There will be no choice but to ration care for our elderly.
Despite this, our politicians have decided to expand the program. This is outrageously fiscally irresponsible and catastrophically stupid. Did not one of our elected officials in Washington listen to the business news yesterday morning, when Moody's reported the US Government was in danger of losing its AAA credit rating in 2013?!?! Remember, this is the same group that has often been late to the corporate bankruptcy parties, only downgrading companies after the fact. This time Moody's sounded the alarm in time to warn us, yet Congress continues the spending unabated. Given this continuing pattern and the latest bill, count on it happening sooner rather than later. If our country loses its AAA credit rating, paying for healthcare will be the least of our worries. The dollar will instantly, irrevocably lose its world reserve currency status. That would create a worldwide panic, economic collapse and chaos. Make no mistake, the US would cease to be the economic power we know today. Our lives will be changed...just not the way any of us wants.
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