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Tony Ondrusek is founder and publisher of Insurance & Financial Advisor and IFAwebnews.com.

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Raise your hand if you don’t know that Social Security, Medicare and Medicaid – the three largest budget expenditures by the federal government – are each approaching the edge of fiscal Armageddon.

There’s a better chance of Bigfoot walking into a Starbucks and ordering a latte than seeing any able-minded American with his or her hand in the air.

The implications for hundreds of millions of Americans who rely on the programs for medical care, income, or as part of their financial and insurance planning as they approach and live in retirement cannot be understated. Do we really understand the serious nature of the crisis in which we find ourselves? Do we really believe that although the eventual demise of these entitlements has been predicted for decades, that the sands have passed through the hourglass and that there is no more time to debate and lament, that action is urgently needed? Or do we believe that we can leave a fix for the future; at one time we thought we could leave the problem of fixing them for a future generation, but there is no “future generation” to which we can leave it. WE are that generation.

The three programs consume more than 41% of the U.S. budget, or more than $1.5 trillion. Social Security accounts for about half that amount, and Medicare about one-third, or nearly $500 billion.

There is no argument from either side of the political aisle that Medicare will be insolvent in about 12 years. Both the CBO (Congressional Budget Office) and the federal Medicare trustee have declared that the massive program is on a predictable, downward spiral toward implosion by the year 2024. The recession and ever-expanding nature of the entitlement program might hasten its demise. And without extreme reform soon, its extinction could have disastrous and catastrophic effects on the U.S. economy.

We’ve all said the same thing. To a person, Americans agree that urgent and immediate reform is needed. Yet for years, both Republican and Democrat Congresses and presidents (from Clinton to both George H.W. and George W. Bush to Obama) have done nothing but bloviate: talking heads that spout politically attractive slogans, but with no backbone and no courage to take any step at all to find a fix Medicare. It’s the giant elephant in the room that everyone talks about while ignoring the huge pile of dung that is sure to choke and drown us if we don’t accept the problem and seek a solution.

President Obama concisely stated the predicament when, shortly after his inauguration in 2009, he said, “We’re now at the end of the road, and we’re not in a position to kick it any further.”

What now?

Should we continue on the same path that Republicans and Democrats have placed us on? Continue to “tsk, tsk” the problem and dream that someone, someday will come up with a solution?

Unfortunately for our current president, he was elected at a time when the recession exacerbates the problem. Looking at the glass as half full, however, could have given him the opportunity to make fixing the problem a core inititave of his presidency, saving the country from further economic decline as Medicare drains more of the nation’s budget and GDP.  His star would have shined brightly. In fact, he stated during his 2008 campaign that Medicare and Social Security reform were near the top of his agenda, promising to, “do it quickly…in my first term as president.”

His action in response to his pledge to fix Medicare? Nothing. Nada. Zilch.

He joins a phalanx of elected officials who professed from one side of their mouth a commitment to fix the problem while remaining silent on the other side of their mouth.

Along comes Rep. Paul Ryan, chosen as a vice-presidential running mate for presumed Republican presidential candidate Mitt Romney. Ryan has proposed – as part of his past budget proposal to rein in federal spending and put America on the road toward economic recovery – a plan to save Medicare.

His plan is not quite visionary, but it is responsible, prudent, and, most importantly, completely doable.

In a nutshell, Americans who are currently 55 or older would see no change at all to their Medicare program. Those of us under 55 would come into retirement in 10 years or longer to a Medicare program that would be administered by private insurance companies with premium subsidies provided by the federal government based on citizens’ need and financial standing. (Romney has quickly melded his plan to save Medicare with most of Ryan’s plan, including changing his initial proposal to directly reimburse insurers to subsidizing premiums.)

Ryan and Romney’s plan to save Medicare would not have any appreciable change before 10 years have passed. That means that before any changes happen to Medicare that might affect me (I am in my early 50’s), my ‘tween-age daughter will finish middle school, enroll and graduate from high school, and enroll and graduate from college. In fact, change wouldn’t even happen until she was in post-graduate school, should she choose that path.

Surely, this is enough time for me – and those in my age group and younger – to prepare for the changes, and plan accordingly. Will it mean a few bucks out of my pocket while ensuring those unable to pay will still receive coverage? Yep. Will it mean that I might have to be more diligent with the spending of my money when it comes to medical care in my retirement years? Of course. Could it signal a move toward fiscal responsibility and maturity that has been lacking from our elected “leaders” for decades and possibly save our country from catastrophic financial ruin? There is no other plan being presented by any other Republican or Democrat that so broadly addresses the need for reform and a plan to save Medicare, and the Romney-Ryan plan appears to be workable and achievable, so my answer here would be: “Yes.”

There will be a long line of political pundits and elected officials lining up at the microphone to decry Ryan and Romeny’s proposal to save Medicare as one that pushes Grandma over the edge of a cliff in her wheelchair, as a Democrat TV commercial has depicted. They will say it is fiscally irresponsible, it decimates Medicare, and that it will leave millions of current and future Medicare recipients gasping for breath as they die off because the massive, out-of-control and imploding program is being changed to save it.

And they will do all of their criticizing and fault-finding without offering a lick of reform as an alternative to the Romney-Ryan plan.

To understand where each presidential candidate stands on saving and reforming Medicare, a quick look at their respective websites gives a good overview.

Mitt Romney’s website outlines the steps he proposes and answers questions about the effects on current seniors (there are no effects), how it will affect future retirees, and his contention that the private sector is best suited to administer insurance programs as competition will ensure the best product at the most affordable cost.

By contrast, President Obama’s website does not offer a page or section specifically dedicated to saving Medicare. Instead, the president’s website contends that Obamacare – which by law shifts more than $700 billion from Medicare to the new federal health insurance program – will bolster Medicare, stating: “In contrast to the false picture Romney paints, President Obama’s Affordable Care Act is working for seniors, strengthening Medicare in a variety of ways.”

There is a section dedicated to health care on the president’s website that includes a video (bottom of page on the left) asserting that Obamacare has helped to pay for seniors’ prescription drugs, thereby being part of a Medicare “fix.”

To find more about Mr. Obama’s plan for Medicare, one must visit twopages on his website. One page contains a story stating that Mitt Romney lies about Medicare; it is the only place on the website that lays out in simple terms the changes to Medicare that President Obama believes will occur as a result of his federal health care law. A second page on the website contains a video showing mostly senior Floridians who will not be affected by a Romney-Ryan plan decrying the plan as one that will be hurtful, painful and designed to help the wealthiest of the wealthy.

It is up to Americans to decide which plan or vision to save Medicare is best for our country. And Americans will do just that when they step into the ballot booth in November.

Not everyone will like either of the courses that we either continue on, or into which we transition. But the fact remains that, as President Obama states, we have reached the end of the road and cannot kick the can farther down the road. There is no more road.

We want the truth, which is that Medicare is seriously broken and rife with fraud, waste, overspending, underfunding and mismanagement. But can we handle the truth, that the system must be comprehensively overhauled and reinvented, in order to save it? And that it must be done NOW?

My guess is that if the past is any indicator of the future, a passive approach such as outlined by the president in Obamacare (which might be dismantled and already is showing huge cost overruns) will push us past the end of the road, over the guardrail and into the weeds.

The Romney-Ryan plan – while not complete and including some big pills and needle pricks – seems like the only viable remedy we have before us to save Medicare. Waiting for another plan or for some pie-in-the-sky idea could ensure that Medicare can never be resuscitated.

Let’s see if America has the guts to handle that truth.

9 Responses

  1. Protricity Says:

    “His action in response to his pledge to fix Medicare? Nothing. Nada. Zilch.”

    It’s President Obama, not King Obama. He can’t do anything without approval of Congress.

    Are you aware we live in a democracy?

    Will we ever get to see an end to these ‘Why didn’t Obama cure cancer’ type rhetorics?

    Can we please elevate the quality of these articles?

  2. Terence Conklin Says:

    Thanks for a fair and excellent overview of the problem. I might add that there are some of us out here who want to drop out of Medicare, having already contributed all we ever will. If that sounds hard to believe look into the laws regarding Health Savings Accounts (HSA’s). These wonderful accounts allow people to save for future health care needs with tax deductible money, essentially making those future health care costs fully deductible. HSA’s encourage saving for those sick “rainy days”, a great idea. HSA rules require one to have a high deductible insurance policy, mine is $5,000 and costs under $200 a month since I spend a majority of my time overseas where care is affordable. When I hit 65 this year I was forced to accept it. They will not allow me to decline its “benefits” which for me are nothing. Medicare doesn’t cover me outside the US. But since i have Medicare, I am no longer able to save for health care with my HSA. I am theoretically, but not really, covered from the first dollar spent. This condition should be job one in fixing the Medicare mess! It’s so easy.

  3. Tony Ondrusek Says:


    Presidents run on a platform that lays the foundation for legislation and action that they will seek to coordinate with Congress. Part of President Obama’s platform was a reform of Medicare and Social Security.

    Perhaps, during the past year, Republicans have controlled the House so his chances of initiating legislation would have been hindered. But he commissioned Simpson-Bowles to come up with a plan to get a handle on our national deficit and turn us around to fiscal healing. This was OBAMA’s commission! Yet he didn’t seek to implement ANY OF IT! Nothing. Nada. Zilch! Even Democrats are scratching their heads over that.

    But during the first two years of his presidency, President Obama had a Democrat-controlled House and a Democrat-controlled Senate. He could have sought to introduce legislation making the duckbill platypus our national animal, and there wouldn’t have been anything any Republican could have done to stop him. Did he introduce legislation to save Medicare? Nope. How about legislation to save Social Security? Again, nope.

    So Paul Ryan, a Republican who was part of President Obama’s commission (which included 10 Democrats and 10 Republicans), decided to set out on his own and come up with a plan to save Medicare. He developed the plan with DEMOCRAT Sen. Ron Wyden of Oregon.

    Please don’t insult Americans by insinuating that President Obama has had his hands tied and cannot pass legislation against the will of Republicans. Ever heard of Obamacare? The country was against it by more than 60%, and Republicans weren’t even invited to be part of it, and he and the Democrat Congress passed it anyway.

    To suggest he is “powerless” is elementary at best.

  4. Margrette Love Says:

    Say WHAT? You CAN opt out of Medicare coverage! My father is 72 & is NOT on Medicare!

  5. Rick Bryan Says:

    Brilliantly written Tony. As you already know, Americans will stick their heads in the sand and ignore the problem. Even if Romney-Ryan are elected, I think it’s unlikely real reform is going to happen. The truth is, in my view, the practical, day to day differences between how the Dems and Repubs run the country is not all that great, for 90% of government operations. So, assuming nothing will change, when are we going to run out of money? How about this plan: why don’t we sell Alaska to the Chinese? That’s a lot of pain, for sure, but we made our own mess and we have to come up with the cash somehow.

  6. Carrie Conklin Says:

    Thank you, I get it. Why can’t our “leaders”……..

  7. Dean Says:

    This article is a ridiculous collection of misinformation combined with hyperbole. While Medicaid indeed needs substantial reform, Medicare reform is already underway starting with the ACA, and the only real problem with the program is the MedicareAdvantage program, which is a radical failure, and which is the result of the Republican strategy to tack on a private component to a well oiled publicly run option in order to attach an anchor to it. If we cut MedAdv out of the program, it will be restored. SSI can be fixed almost entirely by simply raising the ridiculous payroll cap. Add means testing and SSI is solvent for a century.

    But rather than forthrightly address the known facts about these programs, why not cook up some ridiculous political propaganda to feed the epistemic closure of the Tea Party and try to scare seniors? You tipped your hand, Mr. Ondrusek, when your response to the first comment complained about the President, according to your claim, not doing anything with Simpson-Bowles. That has the unfortunate stench of being doubly untrue. First, the President claimed he would put his stamp on Simpson-Bowles if it passed out of the commission itself. It didn’t however, pass out of the commission – that is, its own members didn’t even vote for it (and yes, that includes Representative Paul Ryan). So here the President did exactly what he promised to do when he set up the commission. Second, he committed to many of the Simpson-Bowles components in his debt ceiling negotiations with Speaker John Boehner last summer. Do I need to remind you that Boehner and his caucus balked on that deal like Yasser Arafat on the Palestinian-Israeli deal?

    So when you go casting about for reasons why we have a fiscal issue with the three programs in this nation that provide a basic safety net of financial security and health care for our elders and the poorest among us, perhaps you should take a look in the mirror and ask yourself whether it’s better to deal with the problem truthfully, or if it’s better to just make up a bunch of bald-faced mularky and post it on the web for the whole world to see.

  8. Dorothy Says:

    I, too, get “it” and have problems understanding why so many others do not. We have become a complacent nation: Why do for ourselves when someone else can provide it for us? Those days should have been long gone. I’m just hoping I can live to a ripe age, be able to live on my own, without having to dig too much deeper into my pockets for cash to pay for my medications and physicians costs that my private insurance and Medicare do not cover. Selling Alaska will bring us only closer to becoming the United States of China. We owe the Chinese government more money that we can repay in my lifetime or the lifetimes of my children at the rate we are going. If some things do not change drastically with the November elections, my great-grandchildren will have nothing but they will be living in the United States of China. And, don’t even get me started on the estate tax mess that has yet to be settled…

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