Medicare: Did You Really Pay for That?

Editor’s note: A version of this article first appeared at Forbes.com.

Last summer, Barack Obama riled a lot of [4]entrepreneurs when he got carried
away at a campaign event and told any American who had built up a successful
enterprise, "you didn’t build that." An even greater backlash awaits any
politician who dares to tell Medicare recipients, "You didn’t pay for that"—for
there are far more seniors than entrepreneurs in our country.

Time after time during [5]Election Year 2012, seniors and near-seniors reacted
to the slightest mention of [6]Medicare reform with indignation and the emphatic
insistence, "Don’t you dare touch Medicare; I’ve paid for it!" There is only one
problem with that statement: In a mathematical sense, it isn’t true.

The amount that American workers have paid and are paying into [7]Medicare
isn’t enough to fund all the benefits that are being paid out to seniors under
Medicare. The trustees of Medicare have stated that the promises they have made
exceed their projected revenues by tens of trillions of dollars. Senator Tom
Coburn (a physician in private life) has estimated that the average American
couple contributes approximately $110,000 to Medicare over their working careers
and receives over $330,000 of Medicare benefits. On Feb. 20, USA Today cited
Urban Institute data pegging those same figures at $88,000 and $387,000,
respectively. There are differing estimates of the size of the gap, but clearly
Medicare suffers from an unsustainable funding deficit.

Let me hasten to say that I have sympathy for those who make the "I paid for
it" case. Through decades of their working lives, millions of seniors paid into
the system and were promised that Medicare would be there for them starting at
age 65. These [8]citizens played by the rules, acted in good faith, and held up
their end of the bargain.

The problem is that [9]the politicians in Washington have not acted in good
faith. Instead, they have committed a gigantic fraud by underfunding the
program. The fact of the matter is that [10]we’ve been swindled, and the anger
and sense of pending betrayal that many seniors feel is understandable. At the
same time, we, the people, need to accept some responsibility for this sorry
state of affairs.

Certainly, the members of Congress and presidents who allowed [11]the imbalance
between Medicare income and expenditures to get so out of whack are ethically
culpable. Still, "we the people" share some responsibility for the Medicare
fiasco. The mistake was naïveté and gullibility. We can see now what an enormous
mistake it was to trust politicians’ promises.

Regrets and recriminations aside, the question now is: [12]Where do we go from
here? What are our options? The only way that the oncoming flood of baby boomers
will be able to receive all the Medicare benefits that they were promised would
be to either [13]increase payments into the system or reduce disbursements from
it.

We already have seen how volatile, contentious, and divisive the political
strife over Medicare has been. Sadly, it is likely to get much worse.
Generations will be arrayed against generations.

On the one side, gray-haired Americans will demand that the promises made to
them, and for which they upheld their end of the bargain, be kept. [14]The
progressives have played a masterful political game; they will have huge numbers
of average Americans who think of themselves as anything but socialists egging
them on and supporting them in [15]their quest to absorb and appropriate more
property. The great American middle class, which has the most to lose when
[16]Big Government supplants the private sector, will be energetically demanding
some of the very policies that will crush the life out of the economy.

On the other side, at some point the younger generations are going to rebel
against the [17]debt slavery to which they have been subjected, and they will
push back as a matter of economic survival and a desire to feel as free as their
elders once did. Responding to pressure from the young, [18]the federal
healthcare blob inevitably will ration health care.

What a terrible price Americans will pay for falling for the seductive promise
of a benign government caring for us all in our old age. Not only will the
country be poorer and less free, but the quality of health care itself is bound
to decline—all while our society is riven between young and old when the common
enemy is the idea that the compulsory economic relations imposed by government
comprise a way of life that is somehow more just, more harmonious, more helpful,
and more prosperous than a society in which each individual’s life and property
are his own and [19]economic exchanges are voluntary (i.e., [20]a society in
which people are free).

— Dr. Mark W. Hendrickson is an adjunct faculty member, economist, and fellow
for economic and social policy with [21]The Center for Vision & Values at Grove
City College.

© 2013 by The Center for Vision & Values at Grove City College. The views &
opinions
expressed herein may, but do not necessarily, reflect the views of Grove City
College.

[22]www.VisionAndValues.org | [23]www.VisionAndValuesEvents.com

References

1.
mailto:[email protected]?subject=Publication%2Fcitation%20notice&body=1.%20Submission%20title%3A%0A%0A2.%20Publication%28s%29%2Fmedia%20outlet%28s%29%3A%0A%0A3.%20Tentative%20publication%2Fcitation%20date%28s%29%3A
2. http://www.visionandvalues.org/2013/03/medicare-did-you-really-pay-for-that/
3. http://www.VisionAndValues.org/
4. http://www.visionandvalues.org/2011/04/the-american-entrepreneur/
5. http://www.visionandvalues.org/2012/11/the-power-of-incumbency/
6.
http://www.visionandvalues.org/2012/08/does-paul-ryan-want-to-take-medicare-away-from-seniors/
7.
http://www.visionandvalues.org/2011/05/the-high-stakes-showdown-over-medicare-reform/
8. http://www.visionandvaluesevents.com/conference/2013-conference/
9. http://www.visionandvalues.org/2012/12/american-politics-as-a-confidence-game/
10. http://www.visionandvalues.org/2011/06/swindling-america-s-youth/
11. http://www.visionandvalues.org/2011/09/universal-health-care-requires-rationing/
12. http://www.visionandvalues.org/2013/02/crossing-the-rubicon/
13. http://www.visionandvalues.org/2013/03/eliminating-the-deficit-progressive-style/
14.
http://www.visionandvalues.org/category/the-progressive-surge-and-conservative-crackup/
15.
http://www.visionandvalues.org/2011/02/the-purpose-and-job-of-government-wealth-redistribution/
16. http://www.visionandvalues.org/2012/06/the-question-of-more-or-less-government/
17. http://www.visionandvalues.org/2011/10/debt-control-or-bondage/
18. http://www.visionandvalues.org/2011/09/universal-health-care-requires-rationing/
19. http://www.visionandvalues.org/2010/10/voluntary-exchanges-and-the-free-market/
20. http://www.visionandvalues.org/2013/01/human-freedom-matters/
21. http://www.visionandvalues.org/
22. http://www.VisionAndValues.org/
23. http://www.VisionAndValuesEvents.com/
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