I’m not at all silent when it comes to medicare! It just hasn’t come up. When I turned 65, I had to apply for Medicare, because my insurance coverage suddenly became secondary coverage. I now pay more for medical care than I did before.
Uh, isn’t that what you would expect? Since 65+ consumes the lions share of health care, insurance should go up as you get older. That’s why private insurers are no longer coveting you.
We don’t have to compare Medicare to fantasy land, we can look at the pre-Medicare numbers. Today’s seniors receive dramatically more extensive care at a significant adjusted total dollars savings.
One of the reasons I support MSAs is that the average person can build up enough cash that way in his working years to pay for his health care after retirement.
Why is it that the folks most interested in free market solutions to societal problems are the most anxious to abandon econ 101?
MSA’s aren’t theory, they’ve been tried for about two decades in CA. The results so far? Middle/Upper class contributers putting in far more than the amounts you specify cannot keep up with non-catastrophic health care costs.
It seems like a no brainer. If we look over long periods, say 50 years, even a fairly risky stock portfolio will generate about 7% return. But medical costs are growing at 10-18% per year. So you are trying to save for something incredibly expensive (average lifetime medical expenditures for Americans is significantly higher than the average cost for a single family home, and a huge number of American’s can’t afford their own home) using negative interest in real dollars.
And this ignores three other critical probems. First, long haul return is cyclic. IE, over the long haul my 401K earns money, but it also has 6 figure swings. We can’t plan on not getting sick because the .com bubble burst, or the stupid-omics behind the current mortage disaster (both real examples of negative equity requiring multi-year (perhaps multiple decade) adjustments for recovery).
Second, scatter from median in health care is huge. The average cost of each year of life past normal expectancy is about $143,000 in medical costs for a person currently over 62. But the scatter ranges from <$10,000 to >$1,000,000. This is why we have medical insurance now, to spread the risk over a larger pool. An MSA is the opposite of this, it is essentially a ‘group insurance’ pool, with an incredibly small group.
Third, we have a negative savings rate, with an alarming amount of credit card debt being wracked up for basic staples now. The idea that every low wage earner is going to be able to save up for worst case catastrophic health care needs (essentially a massive mansion) on an income that requires using credit cards to get food at the end of each month, is silly.
What troubles me about this is that we put up so many smoke screens, much like discussions about the death penalty. If we stop chest thumping and squawking and just look at demonstrable reality, it is clear. Nearly 40 other nations provide a larger percentage of their citizens better health care at a dramatically lower cost than the US. In fact, spending is the only catagory we lead in among industrialized nations. We’ve reached the point were $0.05 of every single dollar in our GDP goes to health care
administration, yet roughly 40,000,000 Americans effectively fall outside our heath care system (either un-insured or woefully under-insured).
If we want to reject Christ’s teachings, fine. Make a case. But lets stop pretending that it is our pocket books that make it impractical.
