Entitlements

Trustees Release Report on Entitlement Programs
By THE ASSOCIATED PRESS Published: March 23, 2005

For Medicare, the threshold when benefits exceed program income occurred last year. For Social Security, that threshold will be crossed in 2017, one year earlier than the 2018 date projected in last year's report
The trustees said that Social Security's unfunded obligations total $4 trillion over the next 75 years, an increase from last year's projection of $3.7 trillion in unfunded liabilities

The report said in 2017, the new date for Social Security's insolvency, payroll taxes will be generating enough income to cover 74 percent of benefit payments. That represented an increase from last year's projection that only 73 percent of benefits would be covered in the year that the trust fund went broke.

For Medicare, the trustees estimated that taxes will be sufficient to cover 79 percent of the program's cost in 2020, when the Medicare trust fund is exhausted. Last year, when the insolvency date was projected to be 2019, tax income was estimated to be sufficient to pay 81 percent of the program's costs.
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Someone was foolish enough to ask the Author to review his plan to handle the full Entitlements Issue. Shoot him at Dawn!

1) The primary element in bringing the Entitlements problem under control remains unification of Benefit awards. A One-Rate Benefit would cost more in the Short-run, but curtail Long-run Costs to the Social Security program by 17%(Author's estimate) over the 75 years. The institution of Medicare, especially after the Proscription Drug law, makes variations in initial contributions immaterial; All will get equitable Return on their investment, though lesser Contributers will benefit from Welfare transfer.

2) The rationale for the One-Rate Benefit is also grounds to Means-Test Recipients. There is massive resistence to Means-testing Social Security benefits, but there are alternative forms of Means-testing: the Author favors the Delay Rule devised by himself. The Delay Rule simply states that Social Security Tax Contributors who fully subscribed to the $90,000 limit up to their retirement(last 20 Quarters), could not draw monthly Benefits for the first 5 years of their Retirement.

3) Medicare needs overhauling far more than Social Security. The Author first states the quickest fix is to tie the Medicare premium paid from Social Security Benefits to the Inflation rate. This will not do the overall Job in the slightest, though, with Health Care Costs increasing much more rapidly; it will reduce immediate major funding by the federal General Revenue budget. Other major Initiatives are needed.

4) A limit on yearly Medicare and Medicaid payments need be made. The Author favors a $30,000 per year limit, but with the ability to access unused Benefit amounts of the two previous years. The yearly Limit will not apply to Pain Relief procedures, Corrective surgeries to correct Accident injuries, and Hospice care. The Limit will apply to all other Clinic visits, Hospitalizations, and Proscriptions.

5) The Above Medicare Plan can be sold to the Public by elimination of all Co-Payment costs except for a $10 payment to the Provider for each Clinic visit, and each Proscription fill. Hospital Co-Payment will be $10 per Day paid to the Provider. The Author estimates the Above plan for Medicare will save over 28% of the total Cost of the Medicare program. The Limit on yearly Benefits will propel purchase of Supplemental insurance by Those who can afford; it made more affordable by being immune from the first $30,000 of insuring cost. The Poor who cannot afford Supplemental insurance will have to rely on a special Medicare and Medicaid Emergency Funds, distributed on the basis of optimal chance of successful treatment. The Poor will also have access to State and County funds, if available, and Charity.

The Plan is not perfect, but what do you expect from a broke Blogger. lgl