Raise The Medicare Contribution Rate

If Medicare and Medicaid will need more funding in the future, the logical and fair thing to do would be to raise the contribution rates. These raises could be small and gradual, say a quarter percent (0.25%) per year until contributions come in line with projected future expenditures.

The Medicare payroll deduction is not a tax. It is an compulsory insurance premium. It is currently 2.9%. For wage slaves the accounting of the 2.9% is that 1.45% is paid by the employer, and 1.45% paid by the employee. (Self-employed people pay both halves). In reality employers pay the full amount, of which half appears as a deduction when employees get the accounting for their pay check. For the history of this arrangement see Medicare History.

I think it would be a good thing to account for any rate increase on the worker side. Most businesses are profitable, and so most workers create more value than they are paid for, the difference going to management's usually bloated salaries and the profits of the owner. Capitalist apologists (who complain endlessly for their suffering rich clients) say that increased taxes on business discourage hiring. By placing the increase on the worker side of the paycheck it raises awareness that this is a necessary expense to pay for health care in your old age.

How would paychecks change? The most commonly paid wage in America is the federal minimum wage, currently $7.25 per hour. Assuming a 40 hour work week, raw wages are then $290.00 per week. At the current 2.9% rate, employers turn over $8.41 to the federal tax authority. Of that $4.205 appears as a payroll deduction to the workers. Each 0.25% increase would deduct a further $0.725 per week.

That does not sound like much (unless $0.73 is the difference between making your rent or not), but over time it should add up to enough to keep the nation's Medicare budget balanced. It takes a lot of years of saving to prepare for almost-free medical care beyond the age of 65.

A different way to look at the problem is to admit that the medical profession has not come up with inexpensive ways to keep large numbers of people healthy once they are old. A person who never made more than $15,000 a year in their lifetime may cost the Medicare system over $100,000 a year for as long as they can be kept alive.

It almost seems as if the health system for seniors is mainly designed to extract the last penny from their pockets and from the Medicare system.

Everyone thinks medical costs need to be capped, but no one (except maybe me) wants to be accused of letting a senior die for lack of medical treatment, no matter how expensive.

The only events that could fix the system are catastrophes. A disease with high mortality that affects seniors more than working-age people would perform actuarial wonders.

We could take a lesson from the Roman Republic, upon which so much of our original system was based. Seniors could buck up and pledge to refuse treatments that do not prolong a healthy, mobile, and fully conscious life. We could make opium smoking available to seniors who can't stand pain, and let nature takes its (inexpensive) course.

Unless we are willing to take a far harder line on capping expenses, we need to raise the Medicare contribution rate.