"Medicare Extra For All" would mean even more motivation to Rothize

[swampwiz]

The Democrats seem to finally have the "next logical step" in health care with a program called "Medicare Extra For All", which seems to be a Public Option that is like Medicare, and importantly a program which will absorb Medicaid.  The cost will be completely free for folks under 150% of poverty, so folks like Yours Truly, who will soon be completely Rothed out, will be able to get free health coverage that doesn't have the stigma or the "able-bodied" work requirements question that Medicaid currently has.

http://acasignups.net/18/02/23/lets-dive-caps-medicare-extra-all

Pay your taxes early and then coast under the Welfare State while our contemporaries who drove the nice car or lived in the chi-chi neighborhood continue to work and pay the taxes to support us!

[boarder42]

this is pretty sweet i could get behind this - its a great first step- and many employers may start utilizing it and providing supplemental coverage over the top.

Thanks for posting this -

[boarder42]

Problem is its not really backed by any politicians and its too logical to actually be implemented. - but it definitely does make people "roth up" i'd switch my plan most likely

[protostache]

Problem is its not really backed by any politicians and its too logical to actually be implemented. - but it definitely does make people "roth up" i'd switch my plan most likely

There are quite a number of progressive Democrats who are very interested in universal healthcare plans. Rep. John Conyers' HR 676 Expanded & Improved Medicare For All Act has 121 cosponsors, and Bernie Sanders' S. 1804 Medicare for All has 16. I think a plan like CAP's will be able to gain quite a bit more traction than that in an environment where the majority is discussing universal healthcare, vs a bill like Conyers' or Sanders' which immediately scraps the whole system that exists today and starts over.

[boarder42]

Oh I agree I think this change looks great on paper. And I know the Dems want universal health care.  Just hard to see Washington do anything logical.

[jim555]

They should lower the Medicare age to 50 or 55 at a minimum. 

[boarder42]

They should lower the Medicare age to 50 or 55 at a minimum.

Where would that money come from this proposal has people paying in at up to 10% salary. Just lowering the age and changing nothing means it's worse off than it is now.

[Monkey Uncle]

They should lower the Medicare age to 50 or 55 at a minimum.

Where would that money come from this proposal has people paying in at up to 10% salary. Just lowering the age and changing nothing means it's worse off than it is now.

One source of funding might be the ACA tax credits that are currently going to people in that age bracket who are on exchange plans.  Exchange plans for people that age are unbelievably expensive (like, 25 grand for a couple).  Medicare has somewhat better cost containment than ACA plans and should be able to save the govt a little money by taking on those people.  The govt may have to force people into Medicare instead of giving them the option of remaining on ACA.  Fully subsidized ACA is a sweet deal compared to Medicare (for the insured, not for the taxpayers who are footing the bill).

Presumably those who have employer-provided coverage would stay on that insurance.  If not, then new tax revenue would be required.  Still, that likely would be cheaper overall than paying the ridiculous cost of private insurance.  The new tax revenue required would likely be less than what employees and employers are currently paying in premiums.  The tricky part would be getting the employer to put their savings into the employee's salary instead of pocketing it.

[CBnCO]

I never understand why these "universal" and government run health systems are so popular. It always ends up with people who live frugally to amass savings, who eat healthy, and who ride their bikes (Mustachians!) paying for those who aren't financially, nutritionally, or fitness responsible. So, how is this a good and fair system exactly?

I wholly agree, due primarily to over-regulation, that our current healthcare marketplace is corrupted and horrible; but, instead of talking more about nutrition, exercise, financial education, and a more open and competitive market (thing that usually drives prices down) for healthcare services, we are stuck with dreaming up new government administered programs and regulations. How is this working for us so far?

Heck, eating healthy and a little bike riding would pretty much solve our so-called "crisis", all the rest is simply a tug of war between special interests and their supported politicians over protecting profits. Don't kid yourselves, any new program that is mandated onto us by our overlords will be written by the industry lobbyists that fund campaigns.

[Monkey Uncle]

^^^Those points were discussed ad nauseum in the "what comes after the ACA" thread.

[sixup]

New York Times: Deficit Financing is Hit by Hanes:  “. . . unless an end is put to deficit financing, to profligate spending and to indifference as to the nature and extent of governmental borrowing, the nation will surely take the road to dictatorship,” Robert M. Hanes, president of the American Bankers Association asserted today.

    He said, “insolvency is the time-bomb which can eventually destroy the American system . . . the Federal debt . . . threatens the solvency of the entire economy.”

These comments were made by the respected president of the American Bankers Association on Sept 26, 1940, at which time the Federal debt was $40 billion.

https://mythfighter.com/2018/02/14/we-all-are-doomed-again-what-will-it-take-for-us-to-understand/

Almost 80 years later and $20 trillion in "debt", still waiting for that time bomb.

Govt spending creates dollars for the economy. This money is created by Congress saying where they're going to spend money. Then the treasury increases those accounts by whatever amount was decided. Dollars instantly created from nothing.

Unfortunately people don't understand this and allow the government to misuse it by spending ridiculously on the wrong things like hundred million dollar fighter jets and bank bailouts and believe that the government can't afford to spend money on infrastructure, health care, and education. Things that would actually benefit the people. Instead the wealth of the nation gets siphoned out to the mega rich and then maybe gets to us in the form of a loan with interest or relatively peanuts in tax credits/benefits.

The government already pays for the most medically expensive demographic with Medicare. Yet somehow we can't afford basic healthcare for the rest of the country? Social security taxes aren't nearly enough to keep the fund solvent (hint: it doesn't need to be), yet payments will continue to go out, how can that be? Who is going to pay the federal debt? Why does that matter?

[PDXTabs]

I never understand why these "universal" and government run health systems are so popular. It always ends up with people who live frugally to amass savings, who eat healthy, and who ride their bikes (Mustachians!) paying for those who aren't financially, nutritionally, or fitness responsible. So, how is this a good and fair system exactly?

Because countries like Germany pay far less per citizen for health care and get better outcomes than we do.

[BTDretire]

This is medicare;
Part A (Hospital Insurance) covers most medically necessary hospital, skilled nursing facility, home health, and hospice care. It is free if you have worked and paid Social Security taxes for at least 40 calendar quarters (10 years); you will pay a monthly premium if you have worked and paid taxes for less time.

 Parts B, C, and D are additional and cost the holder, although I suspect there is some subsidy, depending on income, although I have not found that information yet.


Part B (Medical Insurance) covers most medically necessary doctors’ services, preventive care, durable medical equipment, hospital outpatient services, laboratory tests, x-rays, mental health care, and some home health and ambulance services. You pay a monthly premium for this coverage.
Ok, did find Part B is $134 a month for couples earning less than $170,000. $189 deductible.

Medicare Part D (outpatient Prescription Drug Insurance) is the part of Medicare that provides outpatient prescription drug coverage. Part D is provided only through private insurance companies that have contracts with the government—it is never provided directly by the government (like Original Medicare is).
 Part D is $34 a month, but there are other options costing more and there is a copay.

Medicare Part C is not a separate benefit. Part C is the part of Medicare policy that allows private health insurance companies to provide Medicare benefits. These Medicare private health plans, such as HMOs and PPOs, are known as Medicare Advantage Plans. If you want, you can choose to get your Medicare coverage through a Medicare Advantage Plan instead of through Original Medicare.

A FRA retired couple I know, pay $800 a month for parts B, D, and C.

I think one of the best ways to limit expense of a government giveaway programs is to make sure the receiving party pays part of that bill, if they have skin in the game there will be less waste.

Info from https://www.medicareinteractive.org/get-answers/introduction-to-medicare/explaining-medicare/what-does-medicare-cover-parts-a-b-c-and-d

[protostache]

The idea of this Medicare Extra program is that it replaces traditional Medicare, Medicare Advantage, Medicaid, and CHIP over time. All of that funding would get funneled into this new program (eventually). People would pay on a sliding scale, just like ACA subsidies, up to a maximum of 10% of their income in premiums for ACA Gold tier coverage, only better because the network would be nationwide. People who make less than 150% of FPL would pay zero, and I believe people on disability wouldn’t pay anything, or at least wouldn’t be penalized for income like they are now on SSDI.

[Luck12]

I never understand why these "universal" and government run health systems are so popular. It always ends up with people who live frugally to amass savings, who eat healthy, and who ride their bikes (Mustachians!) paying for those who aren't financially, nutritionally, or fitness responsible. So, how is this a good and fair system exactly?

Very shortsighted and selfish of you.  Just from a FIRE perspective, universal healthcare is a God-send.  Pre-ACA, it was a huge gamble to FIRE.   Also, you do realize millions of people eat healthy, exercise, etc, and still come down with cancer, heart disease, etc?   How is it fair people die early deaths and go bankrupt under a non-universal system?

[kei te pai]

Its not just about the money. We have a publically funded healthcare system, its far from perfect, but no one needs to fear medical bankruptcy. There are some part charges for primary care for adults, private care and private insurance are available to "top up" , but after many years working in health I still wouldnt bother with health insurance.
Peace of mind, knowing not just my healthcare, but that of my family and friends, my neighbour, the minimum wage worker down the road, is accessible in times of need, is priceless.

[protostache]

I never understand why these "universal" and government run health systems are so popular. It always ends up with people who live frugally to amass savings, who eat healthy, and who ride their bikes (Mustachians!) paying for those who aren't financially, nutritionally, or fitness responsible. So, how is this a good and fair system exactly?

Very shortsighted and selfish of you. Just from a FIRE perspective, universal healthcare is a God-send.  Pre-ACA, it was a huge gamble to FIRE.   Also, you do realize millions of people eat healthy, exercise, etc, and still come down with cancer, heart disease, etc?   How is it fair people die early deaths and go bankrupt under a non-universal system?

It also doesn't make any sense. Every single one of these programs is income based with generous subsidies until your income is pretty high. FIREed people generally don't have much income aside from capital gains, which is included for ACA purposes but is also very easily gameable to get the result you want.

[DreamFIRE]

With FIRE coming so quickly, I can't wait around for a complete restructuring of health care coverage, so these first bullet points appeal most to me:

    1. Resist sabotage of the ACA/Medicaid: Protect the progress we've made to date. This is what Democrats have been fighting like hell to do for the past year (well, the past 8 years, really).

    2a. Stabilize the individual market: This has always been the biggest trouble spot of the ACA, with problems made far worse by Trump/Congressional GOP...and it's only expected to get worse next year due to the individual mandate being repealed and Trump opening up the floodgates for Short-Term and Association (ShortAss) plans.

If the ACA can be stabilized and propped up as needed, I would just as well no changes were made to Medicare that might impact seniors in a negative way when trying to add younger people into the mix.  Although it wouldn't necessarily be a negative effect by funding properly, etc., I'm not confident that they would expand it and get everything right.

[GU]

New York Times: Deficit Financing is Hit by Hanes:  “. . . unless an end is put to deficit financing, to profligate spending and to indifference as to the nature and extent of governmental borrowing, the nation will surely take the road to dictatorship,” Robert M. Hanes, president of the American Bankers Association asserted today.

    He said, “insolvency is the time-bomb which can eventually destroy the American system . . . the Federal debt . . . threatens the solvency of the entire economy.”

These comments were made by the respected president of the American Bankers Association on Sept 26, 1940, at which time the Federal debt was $40 billion.

https://mythfighter.com/2018/02/14/we-all-are-doomed-again-what-will-it-take-for-us-to-understand/

Almost 80 years later and $20 trillion in "debt", still waiting for that time bomb.

Govt spending creates dollars for the economy. This money is created by Congress saying where they're going to spend money. Then the treasury increases those accounts by whatever amount was decided. Dollars instantly created from nothing.

Unfortunately people don't understand this and allow the government to misuse it by spending ridiculously on the wrong things like hundred million dollar fighter jets and bank bailouts and believe that the government can't afford to spend money on infrastructure, health care, and education. Things that would actually benefit the people. Instead the wealth of the nation gets siphoned out to the mega rich and then maybe gets to us in the form of a loan with interest or relatively peanuts in tax credits/benefits.

The government already pays for the most medically expensive demographic with Medicare. Yet somehow we can't afford basic healthcare for the rest of the country? Social security taxes aren't nearly enough to keep the fund solvent (hint: it doesn't need to be), yet payments will continue to go out, how can that be? Who is going to pay the federal debt? Why does that matter?

Hmmm, what's changed since 1940? Let's see:

Starting right around 1940, nearly the entire developed world was blown to smithereens in WWII, but the U.S. was spared. This allowed it to develop hegemonic military and financial control over the world. Is the U.S. still well-positioned for this in 2018? China alone holds over $1 trillion of U.S. debt.  Foreign holdings of U.S. debt tops $6 trillion. http://ticdata.treasury.gov/Publish/mfh.txt  Foreign countries intentionally precipitating a financial crisis in the U.S. could certainly happen.

In 1940, the population of the U.S. was 132 million, compared to 323 million today. In 1940, the U.S. was a mostly homogeneous country (88% non-hispanic white) with high civic pride and social trust.  Fast forward to today, the political schism of the 1960s and an unprecedented wave of immigration from third-world countries that have low trust and low participation in civic life, and the U.S. is in a way different situation.  Male labor participation is down significantly since its peak in the 1950s.  40% of children are born out of wedlock today—the number was 3.8% in 1940.  People live much longer these days.  The strain on social welfare systems is much higher now than it was in 1940, even though we are nominally richer on paper.

The U.S. debt now exceeds U.S. GDP.  http://www.pewresearch.org/fact-tank/2017/08/17/5-facts-about-the-national-debt-what-you-should-know/  How can a Mustachian think that is going to end well?  Sure, the U.S. debt also exceeded GDP immediately after WWII for a few years too. But again, compare and contrast then and now:  a confident, mostly homogeneous nation full of pride and social trust, recovering from an insane world war, vs. a low trust, divided nation that doesn't believe in itself and is in debt because its various ponzi schemes are unraveling.

[DreamFIRE]

Social security taxes aren't nearly enough to keep the fund solvent.

It's off topic for this thread, but social security can be fixed easily without cutting benefits.  See this previous MMM forum thread:

https://forum.mrmoneymustache.com/welcome-to-the-forum/i-fixed-social-security!/

[mm1970]

I never understand why these "universal" and government run health systems are so popular. It always ends up with people who live frugally to amass savings, who eat healthy, and who ride their bikes (Mustachians!) paying for those who aren't financially, nutritionally, or fitness responsible. So, how is this a good and fair system exactly?

I wholly agree, due primarily to over-regulation, that our current healthcare marketplace is corrupted and horrible; but, instead of talking more about nutrition, exercise, financial education, and a more open and competitive market (thing that usually drives prices down) for healthcare services, we are stuck with dreaming up new government administered programs and regulations. How is this working for us so far?

Heck, eating healthy and a little bike riding would pretty much solve our so-called "crisis", all the rest is simply a tug of war between special interests and their supported politicians over protecting profits. Don't kid yourselves, any new program that is mandated onto us by our overlords will be written by the industry lobbyists that fund campaigns.

Let me introduce you to...

Canada
The UK
Denmark

etc.

Where you don't go broke if your kid has Type 1 Diabetes.  Or if you are hit by a car while on your bike. Or if you have a stroke.  Or start going numb in your feet due to Guillian Barre syndrome.

It's not an accident that I picked those 4.
My college friends have 3 kids.  Two of them have Type 1 diabetes.  Monthly cost of insulin? (WITH INSURANCE) $2166.
A friend and former colleague of mine is a bicycling enthusiast.  Was hit by an SUV.  Broke just about everything.  Spent 3 months in the hospital.  It's miraculous that he's alive.  No word on how he'll pay for whatever insurance doesn't cover, given that he's the only income for the family of 3.  Also no word on if he'll be able to walk, control his bladder, or work again.  Gee wouldn't it be nice to know that he won't go bankrupt due to medical bills?
One of my acquaintance's husbands had a stroke at 49.  Very healthy, young vibrant individual.  He's basically a vegetable and never going to come out of it.  He's currently being cared for in a different state because there are no facilities locally that will take his insurance at his age.
The Guillian Barre guy?  Distance runner, cyclist, one of the healthiest guys I know.  On some very expensive treatments to prevent the numbness (he cannot run but can still cycle because he can clip in) from moving to his hands.

Health care gets VERY expensive as you age.  It's all well and good to think you are subsidizing others when you are in your 20s, 30s, and 40s.  After 50 (sometimes earlier), it's a complete crapshoot.  Healthy or unhealthy, crap happens and for many, it's a roll of the dice.

As an aside, I enjoyed pretty decent healthcare in the military.  Government run and all that.

[GU]

I never understand why these "universal" and government run health systems are so popular. It always ends up with people who live frugally to amass savings, who eat healthy, and who ride their bikes (Mustachians!) paying for those who aren't financially, nutritionally, or fitness responsible. So, how is this a good and fair system exactly?

I wholly agree, due primarily to over-regulation, that our current healthcare marketplace is corrupted and horrible; but, instead of talking more about nutrition, exercise, financial education, and a more open and competitive market (thing that usually drives prices down) for healthcare services, we are stuck with dreaming up new government administered programs and regulations. How is this working for us so far?

Heck, eating healthy and a little bike riding would pretty much solve our so-called "crisis", all the rest is simply a tug of war between special interests and their supported politicians over protecting profits. Don't kid yourselves, any new program that is mandated onto us by our overlords will be written by the industry lobbyists that fund campaigns.

Let me introduce you to...

Canada
The UK
Denmark

etc.

Where you don't go broke if your kid has Type 1 Diabetes.  Or if you are hit by a car while on your bike. Or if you have a stroke.  Or start going numb in your feet due to Guillian Barre syndrome.

It's not an accident that I picked those 4.
My college friends have 3 kids.  Two of them have Type 1 diabetes.  Monthly cost of insulin? (WITH INSURANCE) $2166.
A friend and former colleague of mine is a bicycling enthusiast.  Was hit by an SUV.  Broke just about everything.  Spent 3 months in the hospital.  It's miraculous that he's alive.  No word on how he'll pay for whatever insurance doesn't cover, given that he's the only income for the family of 3.  Also no word on if he'll be able to walk, control his bladder, or work again.  Gee wouldn't it be nice to know that he won't go bankrupt due to medical bills?
One of my acquaintance's husbands had a stroke at 49.  Very healthy, young vibrant individual.  He's basically a vegetable and never going to come out of it.  He's currently being cared for in a different state because there are no facilities locally that will take his insurance at his age.
The Guillian Barre guy?  Distance runner, cyclist, one of the healthiest guys I know.  On some very expensive treatments to prevent the numbness (he cannot run but can still cycle because he can clip in) from moving to his hands.

Health care gets VERY expensive as you age.  It's all well and good to think you are subsidizing others when you are in your 20s, 30s, and 40s.  After 50 (sometimes earlier), it's a complete crapshoot.  Healthy or unhealthy, crap happens and for many, it's a roll of the dice.

As an aside, I enjoyed pretty decent healthcare in the military.  Government run and all that.

Fixing our healthcare problems in the U.S. by enacting single-payer is like treating obesity via liposuction—it ignores the cause of the problem, does nothing to ensure it won't happen again, and never quite works out like it was promised.

This article, IMHO, debunks a lot of mythology around healthcare in the U.S.:  https://hackernoon.com/the-myths-surrounding-health-care-policy-5989285fbad0

[protostache]

Fixing our healthcare problems in the U.S. by enacting single-payer is like treating obesity via liposuction—it ignores the cause of the problem, does nothing to ensure it won't happen again, and never quite works out like it was promised.

This article, IMHO, debunks a lot of mythology around healthcare in the U.S.:  https://hackernoon.com/the-myths-surrounding-health-care-policy-5989285fbad0

Pat analogies like yours completely fail to comprehend the complexity of the US health system.

We already have single payer healthcare in the US. In fact we have four different single payer programs: Medicare, Medicaid, VA, and the Indian Health Service. The Medicare Extra program proposed in the OP's article suggests wrapping the first two up and extending them to everyone as an option. It also suggests that every participant pay their fair share of the cost. That cost will be lower, the article goes on to suggest, because Medicare Extra will be able to better negotiate prices with providers and prescription drug and device manufacturers than the multitude of payers we have now can.

The Medicare Extra plan will have copays and deductibles, just like health insurance today. That addresses point 1.

Point 2 doesn't make any sense to me, but maybe I'm reading it wrong.

Point 3 is wrong. The outcome and event based payment experiments that ACA set up (and the Trump administration just cancelled), along with long term studies in other countries, have shown that paying for outcomes instead of fee-for-service results in lower costs and better outcomes.

Point 4 is just dumb. It tries to argue that health insurance as we know it in the US isn't real insurance and therefore... I don't know. We don't all need comprehensive coverage? But how could anyone know that they don't need it? "I will never get cancer because I eat clean and take care of my body" is bullshit. Anybody can get sick at any time.

Point 5 boils down to "America is special and different" but we're all just people. There's no reason we can't adapt a system from a successful country and apply it to our own. ACA is almost the Switzerland system, for example, but because the individual mandate was strangled at birth and is now completely dead, premium costs never came down because the insurance pools never got big enough.

[sixup]

...China alone holds over $1 trillion of U.S. debt.  Foreign holdings of U.S. debt tops $6 trillion. ...

How is this a problem? When an individual, company, or foreign government buys US debt, aka loans the government US Dollars--dollars which the government itself created and can create more of instantly at any moment--the dollars are simply credited to that entity's federal reserve account, and debited from whatever bank they held the dollars previously. If that entity wants their dollars back it's another few keystrokes to subtract from the federal reserve account and credit their bank account.

Yes, the government pays interest on those treasury securities. But that doesn't worry me because again, the government can create any amount of dollars to pay its bills. To use your article (http://www.pewresearch.org/fact-tank/2017/08/17/5-facts-about-the-national-debt-what-you-should-know/): Interest payments last year represented about 6.8% of all government spending at $276 billion. We spend 2-3x as much on military, that worries me more than interest payments.

The strain on social welfare systems is much higher now than it was in 1940, even though we are nominally richer on paper.

Is this due to all those brown immigrants coming in, or due to the misallocation of money by the federal government? You say nominally richer on paper as if we are not actually richer. Yet, we are wealthier as a country than we've ever been. Just happens that most of the wealth has been funneled to the top.

The U.S. debt now exceeds U.S. GDP.  http://www.pewresearch.org/fact-tank/2017/08/17/5-facts-about-the-national-debt-what-you-should-know/  How can a Mustachian think that is going to end well?

How can you think the debt/gdp ratio has any meaning at all? The federal debt is just Federal Reserve Bank holdings of treasury securities. GDP is a measure of total economic output. They're unrelated.

Social security taxes aren't nearly enough to keep the fund solvent.

It's off topic for this thread, but social security can be fixed easily without cutting benefits.  See this previous MMM forum thread:

https://forum.mrmoneymustache.com/welcome-to-the-forum/i-fixed-social-security!/

My point was that it doesn't matter that the fictional SS fund is insolvent.

“‘I come to you as a managing trustee of Social Security. Today we have no assets in the trust fund. We have promises of the good faith and credit of the United States government that benefits will flow.’—Paul O’Neill, Secretary of the Treasury, June 19, 2001″

And this is exactly what happens.

[protostache]

Folks we’ve done the generic funding, debt, costs thing to death in the other thread. Can we keep this one to talking about the proposal in the OP and the consequences to tax advantaged account contributions, please?

[SimpleCycle]

I never understand why these "universal" and government run health systems are so popular. It always ends up with people who live frugally to amass savings, who eat healthy, and who ride their bikes (Mustachians!) paying for those who aren't financially, nutritionally, or fitness responsible. So, how is this a good and fair system exactly?

I wholly agree, due primarily to over-regulation, that our current healthcare marketplace is corrupted and horrible; but, instead of talking more about nutrition, exercise, financial education, and a more open and competitive market (thing that usually drives prices down) for healthcare services, we are stuck with dreaming up new government administered programs and regulations. How is this working for us so far?

Heck, eating healthy and a little bike riding would pretty much solve our so-called "crisis", all the rest is simply a tug of war between special interests and their supported politicians over protecting profits. Don't kid yourselves, any new program that is mandated onto us by our overlords will be written by the industry lobbyists that fund campaigns.

Most premature babies don't know how to ride bikes and healthy eating doesn't prevent people from getting old.

You clearly don't know much about the distribution of healthcare spending in America.

[GU]

...China alone holds over $1 trillion of U.S. debt.  Foreign holdings of U.S. debt tops $6 trillion. ...

How is this a problem? When an individual, company, or foreign government buys US debt, aka loans the government US Dollars--dollars which the government itself created and can create more of instantly at any moment--the dollars are simply credited to that entity's federal reserve account, and debited from whatever bank they held the dollars previously. If that entity wants their dollars back it's another few keystrokes to subtract from the federal reserve account and credit their bank account.

Yes, the government pays interest on those treasury securities. But that doesn't worry me because again, the government can create any amount of dollars to pay its bills. To use your article (http://www.pewresearch.org/fact-tank/2017/08/17/5-facts-about-the-national-debt-what-you-should-know/): Interest payments last year represented about 6.8% of all government spending at $276 billion. We spend 2-3x as much on military, that worries me more than interest payments.

The strain on social welfare systems is much higher now than it was in 1940, even though we are nominally richer on paper.

Is this due to all those brown immigrants coming in, or due to the misallocation of money by the federal government? You say nominally richer on paper as if we are not actually richer. Yet, we are wealthier as a country than we've ever been. Just happens that most of the wealth has been funneled to the top.

The U.S. debt now exceeds U.S. GDP.  http://www.pewresearch.org/fact-tank/2017/08/17/5-facts-about-the-national-debt-what-you-should-know/  How can a Mustachian think that is going to end well?

How can you think the debt/gdp ratio has any meaning at all? The federal debt is just Federal Reserve Bank holdings of treasury securities. GDP is a measure of total economic output. They're unrelated.

Social security taxes aren't nearly enough to keep the fund solvent.

It's off topic for this thread, but social security can be fixed easily without cutting benefits.  See this previous MMM forum thread:

https://forum.mrmoneymustache.com/welcome-to-the-forum/i-fixed-social-security!/

My point was that it doesn't matter that the fictional SS fund is insolvent.

“‘I come to you as a managing trustee of Social Security. Today we have no assets in the trust fund. We have promises of the good faith and credit of the United States government that benefits will flow.’—Paul O’Neill, Secretary of the Treasury, June 19, 2001″

And this is exactly what happens.

Printing money causes inflation. Eventually, if you print too much, we'd start to see inflation at harmful levels like those from the mid-'70s and early '80s. Then if China, Russia et al. decide to call in all their U.S. debt, the US all the sudden has to print trillions more dollars. This could kick off a hyperinflation event. This would be a financial catastrophe for the US. And then the payments will stop (or will be worthless).

This has happened many times throughout history, and it's pretty cavalier to assume it could never happen here.

[sixup]

Weird. 4.5 trillion in QE just to barely reach 2% inflation. Guess that hyperinflation monster is right around the corner.

Anyway, as protostache points out...this has been beaten to death. I'm clearly for any measures that get us closer to an ethical health care system for all in the US. I'd prefer to cut out the for profit middle men insurance industry, but the op article is at least a step in the right direction.

[mountain mustache]

I never understand why these "universal" and government run health systems are so popular. It always ends up with people who live frugally to amass savings, who eat healthy, and who ride their bikes (Mustachians!) paying for those who aren't financially, nutritionally, or fitness responsible. So, how is this a good and fair system exactly?

Heck, eating healthy and a little bike riding would pretty much solve our so-called "crisis", all the rest is simply a tug of war between special interests and their supported politicians over protecting profits. Don't kid yourselves, any new program that is mandated onto us by our overlords will be written by the industry lobbyists that fund campaigns.

I ride my bike 15 hours a week, I ski, hike, and walk everywhere. I eat organic, lots of vegetables, drink lots of water. In other words I do all the right things. But I'm drowning in medical debt right now due to just plain old bad luck. As much as I'd love for bike riding and healthy eating to be the solution...bad luck will still happen. Not everyone using their health insurance has poor lifestyle induced chronic illness :/ 

[BTDretire]

This is medicare;
Part A (Hospital Insurance) covers most medically necessary hospital, skilled nursing facility, home health, and hospice care. It is free if you have worked and paid Social Security taxes for at least 40 calendar quarters (10 years); you will pay a monthly premium if you have worked and paid taxes for less time.

  I learned some more about Part A today.
"Additionally, if you’re hospitalized, your Part A deductible is $1,316, as of 2017."
 This is for each hospitalization.
Also, after 60 days, you have to start paying a portion of each days expense.
"After spending 60 days in the hospital, you must pay $329 per day in out-of-pocket costs; this increases to $658 per day after 90 days. Once coverage runs out, you will have to pay the full cost of the remainder of your hospital stay."
https://www.investopedia.com/articles/personal-finance/070914/medicare-101-do-you-need-all-4-parts.asp

[YttriumNitrate]

It always ends up with people who live frugally to amass savings, who eat healthy, and who ride their bikes (Mustachians!) paying for those who aren't financially, nutritionally, or fitness responsible.

Where are you getting your information that those who are nutritionally/fitness responsible are subsidizing those that are not? Studies suggest it is actually the opposite:

A population in which no one smoked the costs would be 7 percent higher among men and 4 percent higher among women than the costs in the current mixed population of smokers and nonsmokers.

http://www.nejm.org/doi/full/10.1056/NEJM199710093371506

Cancer incidence, except for lung cancer, was the same in all three groups. Obese people had the most diabetes, and healthy people had the most strokes. Ultimately, the thin and healthy group cost the most, about $417,000, from age 20 on. The cost of care for obese people was $371,000, and for smokers, about $326,000.

http://www.nytimes.com/2008/02/05/health/05iht-obese.1.9748884.html

[protostache]

This is medicare;
Part A (Hospital Insurance) covers most medically necessary hospital, skilled nursing facility, home health, and hospice care. It is free if you have worked and paid Social Security taxes for at least 40 calendar quarters (10 years); you will pay a monthly premium if you have worked and paid taxes for less time.

  I learned some more about Part A today.
"Additionally, if you’re hospitalized, your Part A deductible is $1,316, as of 2017."
 This is for each hospitalization.
Also, after 60 days, you have to start paying a portion of each days expense.
"After spending 60 days in the hospital, you must pay $329 per day in out-of-pocket costs; this increases to $658 per day after 90 days. Once coverage runs out, you will have to pay the full cost of the remainder of your hospital stay."
https://www.investopedia.com/articles/personal-finance/070914/medicare-101-do-you-need-all-4-parts.asp

Yep, those limits (among others) are why people pay for Medicare Supplemental Insurance (Medigap) policies.

[swampwiz]

They should lower the Medicare age to 50 or 55 at a minimum.

Where would that money come from this proposal has people paying in at up to 10% salary. Just lowering the age and changing nothing means it's worse off than it is now.

One source of funding might be the ACA tax credits that are currently going to people in that age bracket who are on exchange plans.  Exchange plans for people that age are unbelievably expensive (like, 25 grand for a couple).  Medicare has somewhat better cost containment than ACA plans and should be able to save the govt a little money by taking on those people.  The govt may have to force people into Medicare instead of giving them the option of remaining on ACA.  Fully subsidized ACA is a sweet deal compared to Medicare (for the insured, not for the taxpayers who are footing the bill).

I'd guess that if the ACA were to stick around, the tax credit would be at the level that is commensurate with this plan, so if folks wanted to stay with the ACA, they could do so.  Of course, because this plan would become the inexpensive plan, the only folks who would continue with the ACA would be heavy users, so this will essentially cause a price spiral that will kill off the ACA.

[maizefolk]

It always ends up with people who live frugally to amass savings, who eat healthy, and who ride their bikes (Mustachians!) paying for those who aren't financially, nutritionally, or fitness responsible.

Where are you getting your information that those who are nutritionally/fitness responsible are subsidizing those that are not? Studies suggest it is actually the opposite:

A population in which no one smoked the costs would be 7 percent higher among men and 4 percent higher among women than the costs in the current mixed population of smokers and nonsmokers.

http://www.nejm.org/doi/full/10.1056/NEJM199710093371506

Cancer incidence, except for lung cancer, was the same in all three groups. Obese people had the most diabetes, and healthy people had the most strokes. Ultimately, the thin and healthy group cost the most, about $417,000, from age 20 on. The cost of care for obese people was $371,000, and for smokers, about $326,000.

http://www.nytimes.com/2008/02/05/health/05iht-obese.1.9748884.html

What kind of discussion do you think this is, bringing actual data into it? More seriously, very cool, thanks for digging up and posting these links YttriumNitrate. I've come across the studies about the relative healthcare costs for smokers vs nonsmokers, but not about obese vs thin.

I'm assuming the reason is the same in both cases though: once you're out of your youth, every year it costs more -- in aggregate across hundreds of thousands of people the same age -- to keep you alive than the year before. So the worst thing you can do for your total healthcare costs is to live as long as possible. Smoking and significant obesity both tend to shorten lifespan and that more than cancels out the somewhat higher healthcare costs while alive.

[RetiredAt63]

Young, healthy, major injuries, now an Olympic medalist - public health win.  What would his insurance have paid and what would he have paid in the U.S.?

https://edition.cnn.com/2018/02/11/sport/mark-mcmorris-snowboarder-olympics-trnd/index.html

[ScreamingHeadGuy]

That is certainly an intriguing proposal/pie-in-the-sky. 

Of course the article leaves out discussion of how to pay for the proposal (by his own admission he's not too keen on that side of the equation) and I would be interested how projected total cost compares to the current system.

[bacchi]

ETA:  One of the reasons health care costs are so expensive in the USA is that insurance companies approve lots of extra and often.unneeded treatment/doctors like my fancy second sports orthopedic surgeon. I didn't want him. I didn't ask for him. But apparently my regular orthopedic surgeon got approval from my insurance company to have him stand around and give advice and get paid $50k for that. UGH.

Reminds me of the New Yorker article comparing the Mayo Clinic to providers in McAllen, Texas. McAllen is/was the 2nd most expensive health care market in the country. It's not because the citizens are unhealthier. It's because there are misaligned incentives.

https://www.newyorker.com/magazine/2009/06/01/the-cost-conundrum

[OurTown]

In the fullness of time, something along these lines will be implemented.  I would prefer we do it sooner rather than later, but I don't make the rules. 

My FIRE estimate is about 6 years from now, maybe a little less.  My biggest worry is affordable health insurance.  If the ACA survives or there is some sort of public option, we will probably be fine.  My fallback will be to keep my side gig and possibly even ramp it up just to qualify for health insurance. 

[boarder42]

In the fullness of time, something along these lines will be implemented.  I would prefer we do it sooner rather than later, but I don't make the rules. 

My FIRE estimate is about 6 years from now, maybe a little less.  My biggest worry is affordable health insurance.  If the ACA survives or there is some sort of public option, we will probably be fine.  My fallback will be to keep my side gig and possibly even ramp it up just to qualify for health insurance.

thats my biggest worry for our FIRE around the same time the difference is you're 17 years closer to medicare than we our so your supplement wont have to last as long.