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Dr. Caroline Cicero

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Gaining Perspective on Social Security and Medicare

Posted: 07/14/11 01:29 PM ET

In case you don't know why your mom's or grandma's Social Security and Medicare benefits are being used as puppets in Washington's budget and election season debates: 1.) Our government has a spending problem (which you probably know by now) and 2.) Our population is aging. Baby Boomers started turning 65 this year, and you may have heard from Republican presidential hopefuls that there won't be enough workers in coming decades to support the retirements and health needs of 70+ million Baby Boomers. Today's pressing problem is that there isn't enough money in the accounts to pay out 70 million checks to expectant older, disabled, and veteran beneficiaries, causing President Obama to request a raise in the nation's debt limit.

Before you call The White House or your Congressional leaders to complain or offer your suggestion, stop and gain some perspective. Ask yourself: Who is responsible for taking care of our veterans, our disabled, and our older people? For veterans, there is little question that we all owe them and their families for their service fighting our wars -- not just our current wars -- but the ones we have fought over the last century. (Frank Buckles, the last surviving American WWI veteran, died in February at the age of 110.)

But what about the deservingness of the disabled and elderly? Himself disabled by polio, President Franklin Roosevelt signed Social Security into law in 1935. When Social Security was enacted, there were 7.8 million people age 65+ in this country, and life expectancy for a 65 year male retiree was another 13 years. Its original goals were to provide income security for workers who would live beyond their working years. In 1939, spouses and children of retirees, as well as family members surviving when the beneficiary died were added. Benefits were extended to the disabled in 1956.

The Social Security ideal was that if people cannot work due to old age or disability, or due to an employer's perception that they are too old, then the government should step in provide for their financial needs. In 1967, the Age Discrimination in Employment Act (ADEA) made it illegal for an employer to terminate a worker between the age of 40 and 65 due to their age. ADEA's upper age limit was changed to 70 in 1978, meaning that employers could fire workers older than 70. In 1986, at the age of 75, President Reagan eliminated the upper age limit. This removed the inability-to-work issue from the deservingness rationale for Social Security. Today, all employees are allowed by law to work as long as they please. Therefore, based on the Social Security ideal, the government would not be required to take care of them just because they are older. The age eligibility for Social Security has already increased. By 2027, all workers will need to be 67 before they are eligible to receive the benefits we have come to expect. However, remember that Social Security is not only for retired workers.

More than one quarter of all American households have a member receiving Social Security benefits. While 38 million beneficiaries are retired workers or surviving older dependents, 1/3 of beneficiaries are younger than age 65, a total of 22 million people. Three million children under 18 receive Social Security benefits because their parent workers have retired, become disabled, or died.

When Social Security was enacted, it was assumed that once old age set in, illness and disability would follow. Thirty years later, when Medicare was enacted by President Johnson in 1965, the rationale for it was that if a person cannot get health insurance because of old age or illness, the government should provide the coverage. Similar rationale supports the Affordable Care Act's goal of insuring people younger than 65.

By 2014, Medicare expenditures of $736 billion are expected to bypass Social Security's $694 billion. The questions remain: Who is responsible for taking care of the aging, sick, and disabled Americans? If the government is not responsible, then who is? Should they take care of themselves? Should their families absorb the cost of caring for them? How about neighbors for people who have no family, or religious institutions?

Furthermore, should people who don't depend on their Social Security benefits or on their Medicare refrain from accepting it? In other words, should these entitlements we have come to expect be reserved only for those who truly need it? If your mom or grandma doesn't need her monthly check from the government, how would she and you feel about turning it down? Going without her monthly check may make her tap into your inheritance and change her income tax status. Inheritance and taxes! Do estate taxes affect the budget and the deficit? That's a hot political question for another day ... or is it?

 
 
 
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03:46 PM on 07/18/2011
Social Security and Medicare are insurance programs, they are necessary and required and any all talk about changes to benefits need to cease. Senior citizens have paid into the system and expect to see the benefits promised. Simple funding answers exist for both Social Security and Medicare. First, Social Security, the FICA tax on income should be applied to all earned income, no upper limit, capital gains, dividends as well. This change will Stabilize Social Security through the next few decades and also assist to stabilize Medicare.

Medicare, should be expanded to allow 55+ buy in, expands premium base and helps to stabilize the system, Medicare should also change payment system to a bonus system tied to Best Out Comes.
Bonuses should be paid for results, not fee for service basis. Poor results = lower payments to provider, better outcomes result in higher payments. HHS should develop a system which rates all providers for such a bonus system. The data base should be publicly accessible to allow seniors to select providers based on best out comes. Of course doctors and hospitals will scream bloody murder they would actually have to care for their patients to get paid and would loose patients when their best out come rating was low. Doctors will buy all the Republicans and few Democrats as well to insure that this type of system never see's the light of day.
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Dr. Caroline Cicero
05:55 AM on 07/30/2011
I like your ideas. It is too bad that politicians get in the way of quality control and practicality.
03:34 PM on 07/18/2011
If we all pooled our money for things like end of life day care as an insurance, then we could all benefit from it if we needed some one to stay with us during the day.
02:48 PM on 07/18/2011
Social Security is a mixture of an insurance and an annuity. We started paying double in 1983 to save enough for the many boomers that would retire. We have purchased $2.6 trillion in treasury bonds.

Workers have paid into payroll taxes from every paycheck to pay for both Medicare and Social Security.
We should have savings in Medicare, but the more we put in the more medical costs have went up.

So Cicero what is your retirement plan?

Did you know the workers pay for all retirements, but those who won't draw it don't pay for Social Security?
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Dr. Caroline Cicero
05:59 AM on 07/30/2011
Yes, I did know that. I also know that women and men who step outside the workforce to care for dependent children or aging parents hurt themselves by losing out on building up on their Social Security. Taking care of your own family instead of expecting someone else to do it should not punish you in your retirement years.
08:54 PM on 07/14/2011
The Social Security and Medicare systems are insurance systems, not entitlements. These system need some small tweaks to insure that they can provide the benefits that workers of this nation pay for. First, if FICA was applied to all earned income as it actually should be, no caps and including capital gains and dividends the system would be on a very sound financial base. Second if a person wants to buy out of the system, allow them to do so. Let the Rich buy out of the system at the age of 55. The one stipulation being that they must sign a contract which states in no uncertain terms they are giving up all rights to any and all benefits from either SS or Medicare. Let see if they want to risk the loss of the backstop insurance protection.
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Dr. Caroline Cicero
06:04 AM on 07/30/2011
Yes. They are insurance systems. But, they are also called entitlements.

http://webcache.googleusercontent.com/search?q=cache:wZUllrdp5_4J:www.ssa.gov/glossary.htm+what+is+social+security%3F+entitlement&cd=3&hl=en&ct=clnk&gl=us&source=www.google.com
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rtx47
05:30 PM on 07/14/2011
In healthcare in general and Medicare in particular, we dont need to cut anybody's benefits. In fact we need to enhance preventive and early curative care.

We need to cut over-treat­ment, inappropri­ate treatment, waste, fraud and abuse in care and billing; without nickel and diming patients or healthcare providers.

Biggest cost item is the third of healthcare budget spent in last months of life because there is no family to care-for the end-of-life patients (forcing 80% to die in the hospital or nursing homes). I suggest we can end this by billing first degree relatives for all non-medical care. Let family courts decides who should pay; including taxpayers in part or in full.

Seniors can improve the healthcare system by them, their first-degr­ee relatives and friends taking care (non-medic­al) of themselves­.

Healthcare workers are highly-tra­ined, highly-pai­d profession­als working in a costly environmen­t. These workers are the patients' Care-Giver­s and friends. They are not the patients' baby-sitte­rs. And hospitals are not places to baby-sit patients.

One doesn't need to tax or subsidize (aka make it a political football) to eliminate waste.

One needs a remedy specifically targeted at those who could do better; but don't because we are Americans can have earned the right to complain about everybody and everything except ourselves.
03:30 PM on 07/18/2011
Bad idea to make relatives pay for all non-medical care since they have no control over it. Try not taking an elderly person to the doctor or hospital if they are sick and see what happens.

I believe that most would rather stay at home no matter how sick but there are a lot of people that don't want anyone to die in their home. Many panic and rush them to the hospital. Maybe that attitude could be changed.

When my sister in law died at home her sister and some of us sister in laws would sing her favorite songs, if she woke before medicine time. She didn't have a pain machine but we didn't let her suffer. We felt she was blessed to die because she had to be kept unconscious in order to stand the pain.

People usually died at home until the last 60 years or so.

My husband's mother died at home. She was eating grapes and stood up and said there is a pain in my head and died right then.

If the families had more of the equipment they could rent, like pain machines and the medicines they need, more would probably stay in their home.

There are people who could stay and be day sitters with them, but if the R government gets involved it would probably get expensive fast.

Maybe we need an insurance for our last needs and care.
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Dr. Caroline Cicero
06:09 AM on 07/30/2011
We spend a lot of money (too much) to keep people alive, in the hospital, in the last stages of life, but I do not agree that we do it because they do not have family to care for them. Plenty of people with family still die in the hospital or nursing homes. Studies show that terminal patients prefer to "die in place" in their homes, yet their family members do not always prefer for them to die at home. The wishes of the patient and the practicalities of the home do not always go hand in hand.
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Inkosi
The gods themselves rage aginst stupidity
04:06 PM on 07/14/2011
Nanny state my butt. Social Secuirty is not an entitlement - it is insurance! We paid into it all of our working lives - with the guarnatee we will collect when we are old.. The social security contribution was raised to accommodate the baby boomers. What did you guys do with that money? No need to answer, we know. You squandered it like drunken sailors. Given the current health situation - obesity, type 2 diabetes, coronary attacks, air polluition, food polluition I realy don't think we will all live as long as you expect. Witthdraw medical care and poof - we die faster. No means test, then it does become an entitlement. You pay in - you get paid.
02:38 PM on 07/14/2011
People should not turn down what they paid for. You forgot to mention a lot of disable children are on ss also. One out of every 100 at least. Maybe their parents can afford their care and can turn it down.
If everyone in the USA turns it down-people will come here illegal and have children-so who should sacrifice for this?
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Dr. Caroline Cicero
05:51 PM on 07/14/2011
Yes, disabled children receive social security too, and most working people have contributed to the social security system. I am not telling people to give back their social security or not sign up for the Medicare for which they are eligible. I am asking people to consider what part these programs have in the common good, rather than contributing to the election cycle and budget rhetoric designed to get sound bites and incite people. Bringing illegal immigrants into the discussion isn't really part of this discussion. As long as you bring immigration, though, there are plenty of legal immigrants who work in this country for years and do not qualify for Social Security or Medicare because they haven't worked long enough or because they have jobs that don't qualify.
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steve-in-abq
02:13 PM on 07/14/2011
Who took care of the the needy prior to 1935? How did civilization actually continue without the welfare state? Ask most of the citizens of the world when they plan to retire.

We, as a nation, need to admit that SS, medicare and medicad are, for the most part, failures. These programs are immoral and unsustainable. I say immoral because people are forced to particate in these programs. Some of us think this is fundamentally wrong. And unsustainable, the mathematics are plain and simple. If you cannot understand the math, please do not vote.
03:29 PM on 07/14/2011
You probably resent paying your taxes as well, and most likely pout like it is such a personal burden that you yourself carry--but never question the benefits our pooled resources provide.

Social Security was created based on need, but perhaps those who believe the titans on Wall St are entitled to their bailouts on our dime, awarding themselves fat bonuses after they crashed the economy- would prefer the old to be tossed aside like yesterday's trash.
We need Social Security precisely to protect the old and the vulnerable against the greed and cruelty of those who think only of themselves.
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steve-in-abq
02:49 PM on 07/16/2011
You're just spouting off about me not realizing the benefits of pooled resources. I pay my taxes and don't mind how SOME of the money is spent. As a tax payer, I am entitled to question some of the programs supported by my money. I'm concerned that the government is out of control with power. It takes in huge amounts of money and spends even more than it takes in.
03:41 PM on 07/18/2011
Right, what would people do without Social Security, collect welfare? That would not save the government much money unless they beat us out of the $2.6 trillion they owe to Social Security.
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Dr. Caroline Cicero
05:30 PM on 07/14/2011
Not sure why being forced to participate in something makes it immoral. I am forced to stop at stop signs and street lights, and I don't find this requirement of participating in society to be immoral. In fact, NOT participating in the common practice is immoral. Social security has drastically reduced the numbers of vulnerable people living in poverty across the United States.

Before 1935, many poor disabled and elderly people would end up in poor houses and social service agencies operated by religious institutions. Since many of today's politicians seem to rally their troops based on their religious beliefs, they might try pausing to remember that their morality is based on a prophetic leader who called for taking care of widows, orphans, poor, and oppressed.

My intention in the blog is for people to pause and get perspective, not pander to catch phrases of politicians. If people don't think the government should play a role in taking care of the most vulnerable, so be it, but these people better step up to the plate with alternatives that are consistent with their moral framework.
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OneManRoaring
Tech specialist, former educator & active citizen!
09:45 PM on 07/14/2011
What I resent is the recent phenomenon of governments thinking they can change the rules after that game is well under way. As you pointed out above, one can't decide which laws to obey and which to follow (without potential repercussions) and neither should governments. A contract (or deal) is a binding agreement! The US gov’t has gotten into the business of picking winners and losers and this should stop.

Follow One Man Roaring on Twitter: http://twi­tter.com/o­mroaring
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steve-in-abq
01:43 PM on 07/16/2011
We need to take a close look at the idea of charity. Isn't charity the result of an individual CHOOSING to help someone in need? Last time I checked, you cannot be generous with someone else' money. The government, with these huge social programs, has become the largest charitable organization ever. But it's not real charity, it's forced charity. It has wonderful side effects; creates a dependent class, creates huge voter blocks, and this charity is unconditional.
01:49 PM on 07/14/2011
Here is more perspective to think about:

http://www.washingtonpost.com/business/economy/debt-deal-may-be-unfair-to-women/2011/07/13/gIQAY3mDDI_story.html

What I fear is any notion of the public welfare and the common good--and I think that sentiment was expressed in the Constitution, is being replaced with an entitled class that picks over the bones of the population ripe for looting. What would be so terrible about a society whose priorities were investment in the betterment of humanity rather than profiteering in war and destruction?
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realimagist
Visioning the future in the present
03:33 PM on 07/14/2011
The president and legislators are NOT discussing cold budgets, debts or deficits. They're discussing the very VISION of what this country will become. Neither side has what it takes to address that head on and actually describe the probable results of their decisions. Conservative used to mean due consideration of "unintended consequences." Today the GOP has no concept or concern regarding the consequences of their actions.
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Dr. Caroline Cicero
05:40 PM on 07/14/2011
Nicely said, and great column from Michelle Singletary. Social Security, Medicare, and Medicaid issues have the most impact on women. Not only because they live longer, but also because they have worked outside the home for pay less often in society, making them not eligible for Social Security at the workers rates that men are. While dependent and widow benefits help, we will see more women qualifying on their own terms in the future. Also, women are more often the caregivers for aging parents and in-laws, making them more vulnerable to the few options for long term care we currently have in America. Quitting a job to take care of aging parents affects women more than men, again leaving them out of the Social Security system that is designed to benefit them in their old age.