The boomer effect on Medicare: now what?Blog added by Keith Westbrook on March 22, 2011
Keith Westbrook

Keith Westbrook

Gainesville, FL

Joined: February 26, 2008

The boomers are coming, the boomers are coming!

The beginning of my generations great migration into the Medicare system is now beginning, the leading edge of the boomers, the children of the “Greatest Generation,” have arrived. The effects of 70 million new beneficiaries over the next 18 years are currently and have been debated heatedly for years. The federal government and the Centers for Medicare and Medicaid Services (CMS) have been dreading this moment for 25 years.


They stole every single cent 70 million of us paid into it through FICA Taxes, and we paid the highest amounts. (this linked chart will verify who paid more into it than any other group of workers by generation and percentile). Yes they stole the money — it was and is a trust fund, which means money held in a secure account for the designated beneficiary.

The very same elected officials that now say we have to sacrifice to save the system. Every single federally elected official that has been in office for more than 20 years is guilty — either by complicity or by direct action.

The boomer beneficiary now is facing choices that no other group of Medicare beneficiaries had to face. The financial strains are already changing the costs of coverage and Medicare Part B has instituted a multi-tier premium:
  • 2009 and earlier beneficiaries pay $96.40

  • 2010 beneficiaries pay $110.50

  • 2011 beneficiaries will pay $115.50
They used to increase everyone's Medicare part B premium annually then offset it with their Social Security COLA.

Not anymore.

This is because there has not been a cost of living adjustment in Social Security benefits since 2008, because the Fed says there is no inflation:

Ben Bernanke: Why there will be low inflation in 2011

So there is no need for a COLA from the Fed’s point of view — obviously not the beneficiaries or anyone who lives in the little place we call reality!

The cost of care under Medicare has increased every year since 1965 when the Democrats passed Title XIX of the Social Security Act creating the following:
  • Federal Old-Age (Retirement), Survivors, and Disability Insurance

  • Unemployment benefits

  • Temporary Assistance for Needy Families

  • Health Insurance for Aged and Disabled (Medicare)

  • Grants to States for Medical Assistance Programs (Medicaid)

  • State Children's Health Insurance Program (SCHIP)

  • Supplemental Security Income (SSI)
These are all funded by FICA, and it is the main reason that Social Security and Medicare are now broke.
So now that you understand how and why it happened, what do the newest members of the system need to know? Medicare will only get worse under the new law: How do we fix the problem:

Privatize: there already is a privatization of Medicare in place since 2003 and effected in 2006 that was working extremely well until this current regime defunded it. In the 2009 American Reinvestment and Recovery Act Obama and his socialist cronies removed the funding for the primary plan that was designed to replace Medicare parts A and B: Medicare Advantage Private Fee For Service plans (MA/ PFFS).

The timeline:

In 2003 the then Congress passed the Medicare Modernization Act a test bed for privatizing Medicare. The government recognized several needs, the greatest being how to stop the fraud which was at that time 50 billion a year. The number one reason for the fraud was Medicare takes six to nine months to pay a bill. Anybody waiting that long to get paid — much less cover expenses on that money and lost gains from the profits — would be looking to get it back. Medicare is the most incompetent branch of government.

In creating Medicare Advantage plans they recognized the logic of letting professional medical billing specialists do what they are paid to do and allow health insurance companies, who on average have been paying these types of bills for 70 or more years, cut the payment time to 30 days and the fraud.

It is not a bad program in my professional opinion; it is a great option for those new enrollees with low medical usage and to the early enrollees into SS due to disability who face Medicare Supplement premiums of 2 1/2 to 3 times greater than age-ins. And it is working despite the government propaganda to the contrary.

So that is why they are defunding it in PPACA — the government cannot afford to have the program continue and be shown to actually work as planned because it would only further the privatization movement (just Google it and see all the negative press).
The results:

So how you say does this affect you, my older brothers and sisters? Well for starters you pay more than anyone else for what amounts to no more than a 80/20 catastrophic health plan with no maximum out of pocket and a calendar year deductible this year: 2011 of $1,140 for part A (hospital) and $165 for part B (doctors). (That's $1140.00 is for each hospital trip within a 90 day period and for the same condition. If for different condition within the 90 days you pay again)

On Medicare alone: A $50,000 stay at the hospital for surgery will cost you $11,205 after CYD and your shared costs. Got 12 grand lying around?

You need to plan your future health care and its risk management as much as if not more so than any other facet of your retirement finances. The 62 percent of people who filed for bankruptcy due to catastrophic medical costs will tell you; they did not. And of that 62 percent, 75 percent of them had health insurance. The CYD and out of pocket costs can kill your finances.

You must honestly evaluate your current health, family longevity and family medical history. You also really need to evaluate the retirement health plan offerings from your former employer, especially if it keeps you in their group coverage. Premiums can and often double yet the insurance company or plan is now only paying 20 percent of the bill.

The choice you make today in choosing your Medicare health insurance plan can have big repercussions for your future health both physically and financially. Do your homework.

Also work with an agent that is a licensed and certified Medicare marketing professional.

Finally, you must make these and all future elected officials aware of your opinions and concerns and never take your eye off of them. They are not in this for you, but to remain in power by remaining in office. There is no such thing as a poor politician.
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