Medicare: Democrats’ Perpetual Scam

Within minutes of Mitt Romney’s announcement that he had picked Paul Ryan for his running mate the Obama campaign launched a replay of Medi-Scare, the Democrats’ perennial election year strategy.  The usual tactic is to hold Medi-scare until the final weeks before the election and then tell seniors via sinister direct mail pieces that those evil Republicans would destabilize Medicare. 

It appears that the tactic will backfire on the Democrats this year because they have already destabilized Medicare by diverting part of it’s future cash flow to ObamaCare.   Hopefully, this 2012 version of the Medicare fight will lead to greater voter understanding of how the progressive movement has abused the power of government. 

The political-media establishment often cites Medicare as a “popular” example of the benefits of activist government, unrestrained by Constitutional limits.  But in a rational world Medicare would be seen as a monument to progressive myths, deceptions and failures.

For those who are not old enough to have witnessed the cynical political calculations and hype that created Medicare In 1965, here’s a brief narrative of the Presidential, bill-signing ceremony, the Democrats’ moment of triumph:

President Lyndon Johnson traveled to the Missouri home of former President Harry Truman for an emotional media event celebrating enactment of Medicare.  The two of them repeated some of the preposterous talking points that had helped sell the Medicare scheme to the Congress and the public.

Truman was first to speak:

This is an important hour for the Nation, for those of our citizens who have completed their tour of duty and have moved to the sidelines…These people are entitled, among other benefits, to the best medical protection available.

Then Johnson took over:

…through this new law, every citizen will be able, in his productive years when he is earning, to insure himself against the ravages of illness in his old age….

The genius of Medicare – from the point of view of progressives and Democrats – is how quickly and irrevocably it ensnared the generations in government dependency.  The elderly immediately began receiving subsidized health care and were immediately grateful to Democrats.  Those who were working and paying the bill might have been more resistant except they were told they were buying “insurance” that would care for them in retirement – and it was amazingly cheap insurance.  More from Johnson’s speech of 1965

During your working years, the people of America–you–will contribute through the social security program a small amount each payday for Medicare insurance protection.  For example, the average worker in 1966 will contribute about $1.50 per month. The employer will contribute a similar amount…And through this new law every citizen will be able, in his productive years when he is earning, to insure himself against the ravages of illness in his old age.

Adjusted for inflation, Johnson’s $1.50 per month would be about $10.00 now.  So today, the Johnson promise, adjusted for inflation, would be a combined employer-employee Medicare cost of $20 per month for the “average worker.”  But, with the current Medicare payroll tax rate, and today’s average salary of  about $50,000,  the cost is $121 per month, six times what Johnson promised.

But it gets worse.  Johnson lied.   In no way does Medicare resemble insurance.  It’s just another welfare program that transfers income from workers to retirees.  In fact, modern Democrats, the heirs of Johnson’s Medicare legacy avoid the I word because they know they’d be laughed out of the room if they used it. 

Beginning on the first day in 1966 all revenue from the payroll tax was immediately spent on medical services for current retirees.  When each American reaches retirement age the taxes collected from those who are still working pay for his/her Medicare benefits.

As the chart shows Medicare revenue, from the payroll tax plus “insurance premiums” collected from seniors, isn’t nearly enough to support the program.  Deficits are projected to continue growing without end.

Because Medicare exists most Americans believe they are paying for and will be entitled to health care in retirement and thus, do not invest in a genuine insurance program.  Few if any politicians are honorable enough to tell them the truth, that Medicare is a fraud.

Medicare is Unconstitutional and based entirely on lies.  But it cannot be undone without denying millions of people part or all of the health care they have been promised in exchange for their tax dollars. But it can not be sustained in its present form either.  So, a few courageous Congressmen, led by Budget Chairman and Vice Presidential nominee Paul Ryan have presented a relatively simple and workable change that would stop the bleeding.  We’ll discuss the Ryan proposal in our next Medicare article.

The predictable response from the Obama campaign and most of the media has been to claim that Ryan’s intent is to “end Medicare as we know it” leaving seniors with little help paying their medical bills.  This response is utterly devoid of honesty or concern for the future of Medicare.  It’s calculated to achieve one goal: scare and deceive voters, especially seniors.

Democrats support their position by pointing to polls that show majorities would rather continue Medicare as it is than accept major changes.  But the questions the pollsters ask are dishonest.  They’re like asking a man who lost his job and exhausted his savings if he would rather maintain his current life style without any income or take another job.

Continuing Medicare in its current form is not an option.  Major change is required to prevent draconian cuts in medical services in the future.  The  Treacherous, unprincipled politicians who recklessly fire up fear and emotion instead of dealing with the Medicare crisis that Democrats created deserve to be exposed and voted out of office.

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