If you turn on the news you will see that some people are starting to discuss the tremendous unfunded liabilities of Medicare, that they prove that government programs typically cost much more than expected, and that they should be placed into the hands of private companies.
According to recent statistics, the current form of the Medicare system cannot be sustained and substantial changes must be made to fix this government health insurance program. So just what are these unfunded liabilities, and what impact will they have on you?
The unfunded liability is basically the gap between what Medicare or Social Security takes in through taxes and the amount they are expecting to payout, It’s just a projection, not something that is set in stone.
Many European government health insurance programs, such as Germany’s, have struggled for many years and can be thought of as being on the brink of bankruptcy. You know who is paying to keep them alive. The taxpayers.
Currently Medicare and Social Security supposedly have enough money to cover what they payout, but I expect that the government is already printing money to pay the Medicare bills, because I don’t believe that US Treasury Bonds are selling well in the near future. Even though we heard that the current administration doesn’t expect to raise taxes on the middle class, it will the middle class who will see taxes in form of higher prices and other higher fees.
I would say that primarily China and possibly Germany will be Medicare’s lenders (somewhat amusing as Germany is said to be having difficulties with its own health care system), but because the Dollar is weak and disenchantment with America’s spending policies is rising, it will more than likely end up on the shoulders of America’s taxpayers.
So why is Medicare not sustainable? Some people actually say that Medicare was already bankrupt in’65, when it was introduced under Lyndon Johnson, while others expect to collapse within the next 10 years.
When the Medicare Modernization Act of 2003 was signed into law by George W. Bush, it was done as a way of “honoring the commitments of Medicare to all our seniors.” But he might not have anticipated the consequences of being in a society where there are more elderly people than young people. He also probably didn’t think that the economy would collapse as much as it has over the past six or seven years.
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Tags: finances, Health, health care, insurance, medicare, seniors