Wednesday, August 26, 2009

A Senior's Take On Medicare

As a seventy-one year old retiree I believe Medicare as we know it today should be phased out. The total that each individual has thus far contributed has been tracked by the social security administration. These funds with no allowed accrued interest should be considered vested at various rates based upon age. The government should issue zero coupon bonds which would mature at age 65 to all individuals who choose to have an MSA. Vested percentages would start at age 25 at 3% increasing proportionately to 75% by age 50. Those individuals over 50 at the time of inception of this plan would have the option to receive Medicare benefits at age 65 at today’s rate with no future cola allowances. Current recipients now receiving Medicare could be phase out as they reach room temperature.

The only feature under the current Medicare model that is worthwhile is the Advantage plans where by some insurance companies assume the contractual liability for workers Payroll taxes that have been incurred for Medicare since 1965. Current retirees on these plans should be allowed to redirect 80% of this premium (No Obama, it’s not a subsidy) to their own Health Savings Accounts. This feature alone could save $17 billion dollars a year.

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