I'm Old! Gimme Gimme Gimme!

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Urban Institute Senior Fellow Eugene Steuerle thanks you for funding his medical care absent even the semblance of means testing:

The Centers for Medicare & Medicaid Services (CMS) have once again expanded the services provided under Medicare…As a baby boomer nearing Medicare eligibility, I'm hoping to benefit from some of these many new treatments promising a longer life and a healthier old age.

Who will pay for my additional benefits? Current law suggests you—at least, if you are in your prime working years. I'll pay a premium in retirement that covers perhaps one-eighth of the insurance value of my Medicare and potential Medicaid long-term care benefits. Benefits now are so extensive, especially relative to past Medicare taxes, that most of us baby boomers are already scheduled to reap huge transfers from you who are younger. A typical couple retiring in 2020, for instance, will have paid about $100,000 in lifetime Medicare taxes (much less if we don't credit them with interest on their past contributions). For that price, this couple is scheduled to receive about $500,000 in lifetime Medicare benefits over and above the premiums it additionally pays in retirement.

…you should know that, like most of my generation, I'm not poor and am quite capable of work. True, many capable and relatively young retirees look poorer because they stop working—as you would if you stopped working—but, even then, the poverty rate of retirees today is well below that of children.

Via Kip Esquire.

My take, circa 2003, here.

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  1. I keep hearing how America is this horrible wasteland of uninsured people who can’t get medical treatment, and how we need universal government-provided health care. Then I read stuff like this, and wonder if we more or less already have it.

  2. If this program (and SS) continue to exist as essentially welfare programs, then means testing would be fine. Let’s agree, however, that “means” would be defined as what you earned in your lifetime, not what you accumulated. No sense rewarding the guy who earned $100,000 per year and blew it all while punishing the guy who earned $75,000 but saved a good chunk for his retirement.

  3. Let’s agree, however, that “means” would be defined as what you earned in your lifetime, not what you accumulated. No sense rewarding the guy who earned $100,000 per year and blew it all while punishing the guy who earned $75,000 but saved a good chunk for his retirement.

    I fully agree, except that we’d end up right back to “Oh, these poor dears can’t afford what they need to survive! We need a government program to help them!”

  4. I get annoyed every time I see the deductions section of my check.

    When I think about how much of that will go to helping Baby Boomers get boners well into their 70s I get super fucking pissed.

  5. I would think “means testing” in health care means having enough HEALTH rather than enough MONEY.

  6. Thank you Lyndon Baines Johnson.

    In other news, it’s not all poops and giggles because those who are taxed on social security benefits are essentially being taxed twice as the original SS taxes were taxed as income and now the bennies are taxed as income as well.

    I know, who cares. 🙂

    My forecast is that SS will eventually become a means tested welfare program for the indigent old. Gradually, all but the poorest of old farts will be weaned off the system without any recompense for prior ss taxes that were extracted from their wallets in the glory days.

  7. As a small l libertarian, I still subscribe to the large L side of the party on this. If you can’t take care of yourself in your old age, just die already. I am willing to pay for cremations (cheaper than burials and don’t waste good land) of the indigent as a public health measure.

  8. We can’t bust heads like we used to, but we have our ways. One trick is to tell ’em stories that don’t go anywhere — like the time I caught the ferry over to Shelbyville. I needed a new heel for my shoe, so, I decided to go to Morganville, which is what they called Shelbyville in those days. So I tied an onion to my belt, which was the style at the time. Now, to take the ferry cost a nickel, and in those days, nickels had pictures of bumblebees on ’em. ‘Give me five bees for a quarter,’ you’d say. Now where were we? Oh yeah — the important thing was that I had an onion on my belt, which was the style at the time. They didn’t have white onions because of the war. The only thing you could get was those big yellow ones…

  9. My forecast is that SS will eventually become a means tested welfare program for the indigent old. Gradually, all but the poorest of old farts will be weaned off the system without any recompense for prior ss taxes that were extracted from their wallets in the glory days.

    I’d bet on it.

  10. Gradually, all but the poorest of old farts will be weaned off the system without any recompense for prior ss taxes that were extracted from their wallets in the glory days.

    Agree. They just haven’t figured out the means to do it yet that doesn’t appear to be there. The problem is that not so old farts like myself in the mid 40’s range seem to be the ones who the crosshairs are focused on.

    Then again, realized that the aforementioned old farts are the demographic set that they’re selling the “free” mobility chair to. It’s “free”, really, “free”, no cost at all. With this mentality, perhaps it won’t be so difficult.

    I fully agree, except that we’d end up right back to “Oh, these poor dears can’t afford what they need to survive! We need a government program to help them!”

    True. I had to laugh at the guy who sued his doctor, as he was misdiagnosed with cancer or something, and blew his savings living life as he should have. If the problem was the doc’s death sentence didn’t come about, I’m sure they have a pill for that someplace. The guy probably will end up with the above situation, but I’m sure he lived a hell of a lot more in a few months than I will these next few years. Kinda puts me in a mid life crisis mood thinking about it.

  11. ROTFL, Grandpa Simpson!

  12. Lets be honest–once you make Social Security a means-tested program instead of insurance, it will become about as popular as AFDC was in the 1980s.

  13. should read “instead of universal insurance”

  14. For those of us who don’t have kids, it’s only gonna get better. I don’t make a whole bunch right now, so I only contribute much to Medicare. But boy howdy and am I going to get the best treatment when I retire. Medicare-planning has taught me alot: unless you’re Bill Gates, spend yourself broke before you retire (or put your money where they can’t touch it).

    Just leaving the tab for the next generation. Suckers.

  15. The problem is that not so old farts like myself in the mid 40’s range seem to be the ones who the crosshairs are focused on.

    Those crosshairs were set on you before, during Reagan’s tenure.

  16. I am 43 years old; it is a simple exercise to show that the present value of my OASDI and HI “contributions” exceeds the present value of all of the Social Security and Medicare benefits that the government assures me I am eligible for. I have about 25 more years of contributions to go. Regardless of promises made count on the following happening with Social Security and Medicare within the next 25 years:

    Increasing payroll taxes;
    Increasing retirement age;
    Decreasing retirement benefits;
    Means testing.

    The reality of the pay-as-you-go system and the dynamics of the population make these inevitable. There is no bigger destroyer of wealth in this country than these two programs.

  17. Let’s agree, however, that “means” would be defined as what you earned in your lifetime, not what you accumulated.

    As a recent college grad this reminds me of means testing as it’s applied to financial aid. I believe it is primarily based on a family’s current income level and savings, but on the margin it probably favors the family that chooses to buy that new car or boat instead of saving for future tuition costs.

  18. or put your money where they can’t touch it

    There is an black market industry of folks who’ll show you how to transfer all your assets to your sister so you can get all that free medical care from California.

    It is shocking how open and cavalier people are about it.

    Oh yeah, my brother has Aids so when dad died he just left everything to me with the understanding that I’d give Bill some spending money. Don’t want to jeopardize his MediCal.

    Didn’t want MediCal to put a lien on Mom’s house for the cost of the nursing home so we sold her house before hand and divvied up the money so she has nothing in her name anymore.

  19. Other Matt –
    I’ve actually gotten myself really mad when I see those “Scooter Store” commercials (heck, they even say it with a charming southern-esque accent) because they advertise them “at no cost to you.” GREAT! Seriously, I need to come up with a business plan that is 100% designed to be run off of government welfare. That’s seriously the way to go.

  20. It will become means tested after the boomers die. They have too much voting clout to let it happen sooner.

    So current workers will pay their ‘own’ taxes, they will pay for the shortfall for all boomer elderly, then benefits will be cut.

    If boomers stay around too long, we’re hosed.

  21. but on the margin it probably favors the family that chooses to buy that new car or boat instead of saving for future tuition costs.
    Actually, before my sister went to college her freshman year, my parents did exactly that. They bought a new car… Cash.

  22. “It will become means tested after the boomers die. They have too much voting clout to let it happen sooner. ”

    I really fucking hate baby boomers.

  23. Don’t ask what for!

  24. cesar:

    They are the very close to the scariest enemy of liberty visible on the horizon. They are incented to demand more and more transfer payments in cash, more and more in medicine, and will wreck both our ability to save and any successful mechanism for medical innovation. Fear the AARP. They are the most powerful lobby in the history of this country.

  25. My forecast is that SS will eventually become a means tested welfare program for the indigent old. Gradually, all but the poorest of old farts will be weaned off the system without any recompense for prior ss taxes that were extracted from their wallets in the glory days.

    I hope you’re right. My fear is that we’ll turn into France instead.

    There is an black market industry of folks who’ll show you how to transfer all your assets to your sister so you can get all that free medical care from California.

    In my experience, it’s not even a black market when it comes to “impoverishing” yourself as you prepare for Medicaid. It’s perfectly legal. Although I know some tax lawyers who refuse to help clients do it.

  26. I’ve actually gotten myself really mad when I see those “Scooter Store” commercials (heck, they even say it with a charming southern-esque accent) because they advertise them “at no cost to you.” GREAT! Seriously, I need to come up with a business plan that is 100% designed to be run off of government welfare. That’s seriously the way to go.

    Whenever I see some OBESE senior that needs a “mobility scooter” I get so angry I could spit nails.
    Here’s the rub: Because you’re so fat and lazy, we (the gov’t) will confiscate money from responsible productive people so you can get to the liquor store for lottery tickets easier.

  27. J sub D-

    I get even more pissed off when I hear some old, obease senior on oxygen go on a rant about all the “welfare cheats” on food stamps, while he draws his social security checks and medicare subsidies.

  28. Ants are dumb. They do all the work while I use the federal government to take 50% of what they make.

  29. “Because you’re so fat and lazy, we (the gov’t) will confiscate money from responsible productive people so you can get to the liquor store for lottery tickets easier.”

    …and I thank you for it too.. (…burp)
    Now gimme a winner this time!!

  30. “I get even more pissed off when I hear some old, obease senior on oxygen go on a rant about all the “welfare cheats” on food stamps, while he draws his social security checks and medicare subsidies.”

    Spoken like a true Junior College freshman.
    …and it’s spelled obese kid.

  31. I really fucking hate baby boomers.

    How can you be so hard on *The Greatest Generation Evah!*?

    I mean, everything you have today is a result of their protestin’, occupyin’ and freeloadin’ their way through their early life.

    The wheel? Boomers. Indoor plumbing? Yep, Boomers again. Electricity? Ditto. Commercials in the movie theater? Right again.

    To which I say, “Screw you, my generation gave us Internet porn.” And then, like the elder Simpson, they suck our bank accounts dry, die old and bloated and have the last laugh.

  32. I didn’t earn it, I don’t need it, but if they miss one payment, I’ll raise hell!

  33. I really fucking hate baby boomers.

    Waaaaah!
    Waaaaaaaah!

  34. Cesar said: “Lets be honest–once you make Social Security a means-tested program instead of insurance, it will become about as popular as AFDC was in the 1980s.”

    As a former insurance underwriter, I cringe every time someone buys into the government’s horses**t that ss is insurance. It’s not. It’s an entitlement program, paid for out of current revenues of the treasury, with the surplus ss money being collected by law going immediately to the federal general fund and being spent on unrelated items. The so-called trust fund has no real assets at all in it.

    If someone running an actual insurance fund acted this way with their subscriber’s premiums, the company would be shut down for malfeasance and the perps jailed for violating their fiduciary duty.

    The Social Security Trust Fund is socialist, not social — it’s not secure — and it’s not a trust fund. Other than that, the title’s accurate.

    Make ss voluntary — let people who want to bail out do so, and “lose” the prior taxes they paid on it — and it would come crashing down in a soaring premium insurance “death spiral” in a few years.

  35. “As a former insurance underwriter, I cringe every time someone buys into the government’s horses**t that ss is insurance. It’s not. It’s an entitlement program, paid for out of current revenues of the treasury, with the surplus ss money being collected by law going immediately to the federal general fund and being spent on unrelated items. The so-called trust fund has no real assets at all in it.”

    Sorry, I should have known better. When you hear the government call it “insurance” so much you say it without thinking!

    “Make SS Voluntary”

    Amen.

  36. And as long as we’re being precise — “I really hate f**king baby boomers” should read, “I really hate the statist portion of the f**king baby boomers, while still respecting boomers like jh who want to get rid of ss and medicare and medicaid and …”

  37. jh-

    Ok, I reall fucking hate the Baby Boomer retirement lobby (AARP).

  38. The reason to hate boomers as an imperfect generalized class of people is they never saved a cent. Their parents did. You know, the ones who actually lived during the Depression? They saved their whole lives.

    As a generation, the boomers have saved frighteningly close to nothing. Now the biggest generation is also the neediest in their old age. Great.

  39. As a generation, the boomers have saved frighteningly close to nothing.

    What do you mean? They saved the world.

    Just ask them.

    The least we can do is supply them with free boner pills and electric scooters for life.

  40. Do all your parents and grandparents know you talk and feel like this?
    Ya, thought so.

  41. Grandpa, my parents definitely know I talk like this. My grandparents are largely benefactors of obscene pension programs from companies that can no longer afford them.

    We also have the boomers to thank for an unlimited supply of tacky used clothing.

  42. “My grandparents are largely benefactors of obscene pension programs from companies that can no longer afford them.”

    …and how is this you grandparents fault?

  43. Eh, isn’t the Boomer generation AFTER the one that saved the world?

  44. your

  45. JasonL,

    Are you sure about that? I’m wondering what the stock market is going to look like in 5-15 years as 401(k)’s, ginormous pension funds, and other capital assets start to be sold to liquid cash or fixed-income securities by retiring boomers. I mean, I’m in my 30’s and I have some money in mutual funds and equities. My cohort does not account for the trillions of dollars in Fidelity or Vanguard; nor for the giant public and private pensions: Calpers ($240 billion), TIAA-CREF ($390 billion), the billions held by automakers and old-line manufacturers that will soon be churned into cash. A goodly portion of the total market is owned by foreign owners. But where is the bulk? Who owns the bulk of mutual fund assets and pension fund obligations? The boomers. I think the effect of boomer house downsizing and sunbelt-relocating (and reverse mortgages) are reasonably well-understood by the impacted regional real-estate markets, but I don’t think the impact of a “rush to liquidity” as the people born 1945-1950 turn 65-70 (2010-2020) is really expected or planned-for in the stock market yet.

    Will equities tank under sell pressure in 2010 at the same time as bond yields tank due to fixed income demand? That’s one of the things that has me accumulating a little cash in my mix now, so I can increase my equity holdings when cash is more valuable to boomers than equities.

  46. Grandpa.. did I say it was my grandparents’ faults? I was merely stating that they don’t really benefit from Medicare and Social Security, so it does me little good to be angry at them for taking advantage of it.

    And maybe you’re just looking to pick a fight.

  47. gorgonzola:

    Agreed. “Nothing” is too harsh. There are lots of them, and the vast majority began saving ten years or less ago. They are on track for a sub 50% income replacement ratio in retirement. They will need something like 85%.

  48. Hatred is illogical.

  49. gorg:

    Also note that modern retirement income plans don’t rush to liquidity. If you try to make a pool of cash last from age 65 to something like 90 (which is a fairly likely scenario) with the whole balance being in cash, you will find yourself in trouble in a hurry.

  50. but I don’t think the impact of a “rush to liquidity” as the people born 1945-1950 turn 65-70 (2010-2020) is really expected or planned-for in the stock market yet.

    Then wouldn’t NOW be the time for YOU to investigate ETF’s of foreign holdings? It’s not like you are at the mercy of whatever mutual fund someone decided you ought to have.

  51. I remember reading a fact that 60% of people aged 55 have less than $50,000 in retirement savings.

    That may mean the system could fix itself if it manifests as boomers not being able to retire and needing to work longer (i.e. more payroll taxes coming from seniors to offset the larger number of people collecting benefits).

    …or it could mean that they’ll just vote in a large block for whomever it is that promises to raise SS/medicare benefits the most.

    Hmmm…which will it be?

    My forecast is that SS will eventually become a means tested welfare program for the indigent old. Gradually, all but the poorest of old farts will be weaned off the system without any recompense for prior ss taxes that were extracted from their wallets in the glory days.

    That’s a very hopeful outlook. I have a feeling the “weaning off” will be much more painful for all of us (if it ever even occurs).

  52. I really fucking hate baby boomers.

    Yeah, me too. The retrospective self congratulatory PBS, History Channel, et al. pabulum, and the “look we’re still hip” or “we’re redefining retirement” financial planning commercial exspecially irritate me. Fucking tools.

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