Ryan's Hope: The Future of Medicare?

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By Harrison Barnes, CEO and Founder - BCG Attorney Search

04/07/11

According to the April 5^th nytimes.com article, ''Generational Divide Colors Debate Over Medicare's Future'', the recently released Republican budget proposes replacing Medicare with private health insurance plans that would be subsidized by the government. The measure would help reduce the largest single contributor to the federal deficit.

Written by Representative Paul Ryan, the Wisconsin Republican, the plan terms the budget deficit an ''existential threat'' to the United States, per the article. However, the way the plan is written excludes over 33% of adults from ''responsibility in dealing with that threat,'' and basically puts the onus on those under the age of 55.

Essentially, per the article, both Democrats and Republicans are generally in agreement that those over 55 shouldn't have to face drastic changes or cuts in their benefits. However, this is due largely to the many people who labor under the falsehood that older individuals have already paid for their Medicare benefits.

However, per the article, not only is this untrue, it compares Medicare to welfare, pointing out that most Americans receive much more in benefits than they pay in taxes. Per household, the imbalance can run in the hundreds of thousands of dollars.

The following example is put forth in the article, illustrating the inequity of what's paid in, and what's eventually received: ''Two married 66-year-olds with roughly average earnings over their lives will end up paying about $110,000 in dedicated Medicare taxes - through the payroll tax - including the portion their employers pay. They can expect to receive about $340,000 in benefits. Two average-earning 56-year-olds will pay about $140,000 and get back about $430,000 in benefits.''

How is this possible? Essentially, Medicare taxes mainly cover hospital bills. Things like doctors' bills and drugs are paid for by general government revenue, but, because not enough of that revenue exists, the government winds up ''borrowing money from individuals and foreign governments and promising that future taxpayers will pay it back'', which is perhaps a roundabout way of saying they're robbing Peter to pay Paul.

Unfortunately, these future taxpayers are the very same, who, per Ryan's plan, won't be receiving Medicare.

According to the article, Ryan's plan ''would let anyone who turns 65 before 2022 continue to be part of this hugely popular welfare program. In fact, Mr. Ryan would scrap the common-sense attempts to slow costs in last year's health bill, like the baby steps to base Medicare coverage decisions more on medical evidence. If you're 55 or older, you get the same old Medicare, with its same soaring budget.''

Those under 55 are excluded, and would be subsidized by the government, enabling them to purchase private insurance. However, it's feared the subsidy might not keep pace with inflationary health costs.

Basically, Ryan seems to be of the mind that the only way to reduce the rising cost of Medicare is to require people to contribute to the cost of their own insurance, and stop sticking taxpayers with the bill.

Here's to a ‘healthy' dose of common sense.

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Alternative Summary

Harrison is the founder of BCG Attorney Search and several companies in the legal employment space that collectively gets thousands of attorneys jobs each year. Harrison’s writings about attorney careers and placement attract millions of reads each year. Harrison is widely considered the most successful recruiter in the United States and personally places multiple attorneys most weeks. His articles on legal search and placement are read by attorneys, law students and others millions of times per year.

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