Article - What you pay for Medicare won't cover your costs

[Guest guest]

Pretty good article reviewing the unrealistic expectations

of Medicare beneficiaries – e.g. they are getting much more out of

Medicare than they put in.

Locke, MD

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http://news.yahoo.com/s/ap/20101230/ap_on_re_us/us_medicare_money_s_worth

What you pay for Medicare won't cover your costs

By

RICARDO ALONSO-ZALDIVAR, Associated Press

Alonso-zaldivar, Associated Press – 1 min ago

WASHINGTON – You paid your Medicare taxes all those years and want

your money's worth: full benefits after you retire. Nearly three out of five

people say in a recent Associated Press-GfK poll that they paid into the system

so they deserve their full benefits — no cuts.

But a newly updated financial analysis shows that what people paid into the

system doesn't come close to covering the full value of the medical care they

can expect to receive as retirees.

Consider an average-wage, two-earner couple together earning $89,000 a year.

Upon retiring in 2011, they would have paid $114,000 in Medicare payroll taxes

during their careers.

But they can expect to receive medical services — from prescriptions

to hospital care — worth $355,000, or about three times what they put in.

The estimates by economists Eugene Steuerle

and Rennane of the Urban Institute think tank illustrate the huge

disconnect between widely-held perceptions and the numbers behind Medicare's

shaky financing. Although Americans are worried about Medicare's long-term

solvency, few realize the size of the gap.

Snip/snip

Many workers may believe their Medicare payroll taxes are going for their

own insurance after they retiree, but the money is actually used to pay the

bills of seniors currently on the program.

That mistaken impression complicates the job for policymakers trying to

build political support in coming months for dealing with deficits that could

drag the economy back down.

Snip/snip

Medicare covers 46 millions seniors and disabled people now. When the last

of the boomers reaches age 65 in about 20 years, Medicare will be covering more

than 80 million people. At the same time, the ratio of workers paying taxes to

support the program will have plunged from 3.5 for each person receiving

benefits currently, to 2.3.

" With Medicare, we are all still making out like bandits, shoving all

those costs to future generations, " said Steuerle. " At another level,

we know that this system is totally unsustainable. "

____

Associated Press Deputy Polling Director Agiesta contributed to

this report.