Medicare – A Promise That is Threatened
Sometimes we forget what an impact Medicare has on our lives. A person has to be around 90 years old to really understand what their life was without Medicare. They would have been 30 years, probably have a young family, and be increasingly worried about their parents’ access to affordable healthcare as they got older or they knew other older people who had medical problems that devastated them financially and/or were forced to rely on their families or their church to help them. They must have worried about what the future held for them and how they would deal with the decline in health that every person faces as they grow old. I was 17 when Medicare was signed into law in 1965 so, for me, it was something that seemed like it was always available. I can’t imagine the relief that seniors must have felt when this new benefit was made available. I talked a lot about the history of Medicare in my blog earlier this month, but I want to repeat a quote from President Johnson’s speech at the signing ceremony,
“No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings they have so carefully put away over a lifetime so that they might enjoy dignity in their later years.”
This truly lightened the burden of worry Americans faced as they grew old.
In my earlier blog, I talked about some of the changes - both good and bad - that have been made to Medicare, but I think it’s important to understand how the taxpayers, you and me, perceived Medicare over the years. When one of my children began working and got their first paycheck, they immediately wanted to know who this FICA was and why they were taking a big hunk out of their pay. I told them that it was the Federal Insurance Contributions Act (FICA), that it’s the way Social Security (SS) and Medicare is financed. The government withholds this money so that we will have SS and Medicare coverage when they retire and, yes, it’s a big hunk. The total percentage withheld is 15.3% with half of the cost paid by the employer unless the earner is self-employed which then makes the whole cost paid by the earner. Of the money withheld 12.4% goes toward SS with the remaining paying for Medicare. It’s pretty even across income amounts except that an additional .9% is withheld for those earning over $200,000 ($250,000 for joint filers). The money withheld for Medicare pays mainly for Part A, hospital inpatient care. Even after we retire, we still pay for some of our healthcare. Our Part B, outpatient care and Part D prescription drugs, use premiums to pay for most of that care.
We’re talking about a lot of money being withheld from the very start of a person’s earning years when they really need every dollar, but the thing that is really important for our lawmakers to understand is how the money that is withheld is perceived by the taxpayer.
From my experience in running two seniors’ organizations, I’ve come to understand that the majority of people I’ve talked with see these FICA withholdings as money that they’ve trusted the government to take care of, kind of like insurance or more accurately put into a trust fund, that will be used to give them a monthly income and quality healthcare when they retire. In my experience, no one looked at it as a handout from the government, in fact getting a handout from the government is not what most seniors are looking for. I witnessed a real negative reaction when the government paid out the COVID-19 stimulus checks in 2020 and 2021. While there were older Americans that needed the help, a blanket payment to all seniors seemed like a political ploy to buy favor rather than getting money to those that needed it. My point is, seniors don’t want a handout, what they do want is good healthcare that was promised when that FICA person withheld a big hunk of every one of their paychecks over their whole working career.
Medicaid is another way that our government provides good healthcare by making sure that those who can’t afford the out-of-pocket costs can still receive good care. While Medicaid is a state administered program for the low-income and disabled citizens, about 70% of the cost of Medicaid is financed by the Federal government. When you cut $500 billion from those payments (as some estimates say the One Big Beautiful Bill Act will do) either your state will be forced to raise taxes to make up for the shortfall or reduce access to quality care, which means that we will have to pay more for this good healthcare that was promised. While all of us hope we will never qualify for Medicaid, we have always felt comfortable that the safety net the program provides will be there if we need it. These enormous cuts have weakened that safety net and have reduced our comfort.
We have every right to expect that when our government took part of every dollar we earned with the promise to give us good healthcare when we retire, that they would keep that promise. Our lawmakers should be focusing on ways to improve that care, rather than finding ways to cut access and throwing up roadblocks that stymie research into new treatments and cures. The trust in our government is already on shaky ground, I really feel that continuing these attacks on Medicare will further erode this trust.
Best, Thair