Two More Major Problems For Social Security & Medicare

Tyler Durden's picture

Submitted by Simon Black via SovereignMan.com,

Not too long ago my step-dad had to spend a few days in intensive care. Pretty scary stuff.

He had just about every nasty symptom imaginable, from constant vomiting to dizziness to ultra-high fever, but the doctors couldn’t figure out why.

Fortunately his condition improved enough that he was released from the hospital, and now he’s on the mend.

Now, my step-dad is a Medicare patient. But he just found out that he’s been unceremoniously dropped by his Primary Care doctor.

Apparently his physician dropped all of her Medicare patients in one giant culling.

It turns out that physicians across the country have been firing Medicare patients; and according to a late 2015 study from the Kaiser Family Foundation, 21% of physicians are not taking new Medicare patients.

Much of this trend is based on stiff penalties and financial disincentives from the Affordable Care Act (Obamacare), and 2015’s Medicare Access and CHIP Reauthorization (MACRA) Act.

MACRA in particular is completely mystifying.

The law created a whopping 2,400 pages of regulations that Medicare physicians are expected to know and follow.

Many of the rules are debilitating.

For instance, MACRA changed how physicians can be reimbursed for their Medicare patients by establishing a bizarre set of standards to determine if a physician is providing “value”.

As an example, if a patient ends up in the emergency room, his or her physician can incur a steep penalty.

This explains why my step-dad was dropped by his doctor.

The healthcare system has been broken to the point that physicians now have a greater incentive to fire their Medicare patients than to treat them.

One Florida-based physician summed up the situation like this:

“I have decided to opt-out of Medicare, acknowledging that I can no longer play a game that is rigged against me; one that I can never win because of constantly changing rules, and one where the stakes include fines and even potential jail time.”

The irony is that all these new laws and regulations were designed to “save” Medicare.

As we’ve discussed many times before, both Medicare and Social Security are dramatically underfunded and rapidly running out of cash.

Medicare is the worst off between the two; MACRA and Obamacare were supposed to create hundreds of billions of dollars in cost savings.

It’s clear now that this cost savings comes at the expense of physicians… and the result is a rising trend in Medicare patients being dropped.

But even with the cost savings, the Congressional Budget Office projects that Medicare will become completely INSOLVENT by 2026.

As I write this letter, Congress is already taking steps to repeal the Affordable Care Act.

If they finish the job, all the supposed cost savings will be eliminated, and Medicare’s projected insolvency date will be accelerated to 2021.

So the government must either keep legislation that isn’t working and have Medicare run out of money in 2026… or repeal the legislation and have Medicare run out of money in 2021.

Either way, Medicare is toast.

Oh, and bailing out Medicare isn’t an option either.

They would need TRILLIONS of dollars to fully fund Medicare, which is just about impossible for a government that loses hundreds of billions each year and already has a $20 trillion debt.

I’m not suggesting they’ll let Medicare go bust.

More than likely they’ll just come up with some band-aid fix that has terrible consequences.

For example, they could bail out Medicare by stealing from Social Security.

Bear in mind that Social Security is a total mess.

Back in the 1960s there were nearly 6.5 active workers paying into the system for every Social Security recipient.

Today that worker-to-beneficiary ratio has fallen by nearly half.

There simply aren’t enough workers paying into the system to support the swelling number of retirees.

That’s why Social Security is terminally underfunded.

And stealing from its trust funds to support Medicare would merely accelerate the demise of Social Security.

Again, there are no good options to save these programs.

But you can easily take charge of your own health and retirement, and there are plenty of solutions available.

Sure, if Social Security and Medicare are still around when it comes time for you to collect, great.

But you’ll be a LOT more secure, for example, if you set up a robust, flexible retirement structure like a solo 401(k) or self-directed IRA.

These allow you to contribute MUCH more money to your retirement, cut costs, and invest in a variety of asset classes that could produce superior returns.

Even just a 1% improvement in your net returns could boost your retirement savings by hundreds of thousands of dollars when compounded over 20-40 years.

A well-structured retirement plan could even own something like an e-commerce business, where not only the profits, but even the investment returns on those profits, would accumulate tax-free towards your retirement.

There are better options in healthcare as well.

Clearly no insurance plan can substitute for healthy food, good choices, and plenty of exercise.

But it’s amazing how much cheaper high quality care and medication can be if you expand your thinking overseas.

Countries like Canada, Mexico, Thailand, India, etc. are renowned for medical tourism.

Whatever treatment you require, from cancer to fertility, top-tier facilities are available abroad at a fraction of the price, and you can actually be treated like a respected human being.

And the cost savings in treatment is often vastly higher than any travel costs in getting there.

(You’d think Medicare would encourage going abroad for treatment…)

Social Security and Medicare are both finished. The numbers don’t lie, and even the annual trustee reports tell us that they’re pitifully underfunded.

But the good news is you don’t need the government to retire and be healthy.

There are plenty of solutions available to take back control for yourself. It just requires a little bit of education and the will to act.

Do you have a Plan B?

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LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Jan 16, 2017 9:04 PM

Two?  Just one problem: NO MONEY!

Of course the Fed will print like mad, devaluing money, making everyone poor.  But Central Planning will "pay its obligations."

HockeyFool's picture

"Countries like Canada, Mexico, Thailand, India, etc. are renowned for medical tourism"

 

So we should move to Mexico, Thailand, or India? Ummmm .... no thanks.

Miffed Microbiologist's picture

Plus that isn't much of an option if you are having a heart attack.

Miffed

erkme73's picture

Over a  year ago, my primary MD fired his office staff, kept one girl, and went to a cash-only (no insurance, no medicare, no medicade) office.  He bills patience $50/mo per person, or $150/mo for a household.  That provides his patients with UNLIMITED access, UNLIMITED scripts, visits, emails, even house calls if necessary.    He has over 1000 patients now, and on a busy week, he might see 10 patients.   He's making way more money, gets paid on time, virtually no overhead, and no fear of prosecution from .gov.

And, he may go days without an appointment - so his workload is probably reduced by 90%.   That, and his patience have zero wait time to see him.  It's a win-win.

The only thing that doesn't work out so well is that you still don't have catastrophic insurance or perscription benefits if you only have his serices.   But for $150/mo my entire family can see, call, skype, or email my REAL doctor as often as needed.  No co-pays.   Or, I can pay $700/mo to United Health Care every month, on the off chance someone gets sick enough to warrant a hosptial stay.

MalteseFalcon's picture

"Social Security and Medicare are both finished. The numbers don’t lie, and even the annual trustee reports tell us that they’re pitifully underfunded."

Social security is largely a pay as you go system So it is not "funded" in the sense of a pension plan.  A percentage of all wages paid provide 80% of the cash for the system.  Mr Black's comments here are not only wrong, but dangerous.  The remaining 20% of the cash could easily be obtained by raising the cap on wages subject to taxation.  Which is what will happen.

The only actual danger to Social Security are the regular attempts by the corporate branch of the Republican party to eliminate the system and hand the money over to their Wall Street friends.  Such a move is underway now as the corporatists try to take advantage of Trump's coattails.  Trump has already said he will protect Social Security and Medicare from these predators.  This is completely logical as older Americans form an important part of Trump's constituency.

As for Medicare, look for Trump to revamp the entire medical delivery system eliminating the VA, medicare, medicaid and Obamacare.  The replacement will use market forces and other incentives to force American health care costs down to the level of the rest of the first world and save 25% to 40% in the process.  This will be accomplished by eliminating monopolistic practices, excessive regulation, cross subsidies, corporate free riders and ineligible patients.

Expanding employment will expand the wage base for both programs.  Welfare state support for illegal aliens will end

Weisshaupt's picture

"Social security is largely a pay as you go Ponzi system"

There - I fixed it for you.  Do the math, and no, simply removing the cap on wages will not fully fund Social security entitlements , not to mention the immoral act of taking money from people who earned it while reducing the any benefit  they might get from the program.   It will fial because there is this large demogrpahic called the baby boomers who are retiring, and as such, the outlays will keep going up to the point where the current workers simply cannot pay for the program. The cap is alreay over 100K  - that means you are already collecting all of the moneyyou can get form 96% of the people, and the remaining 4 percent simply won't be able to make  up the difference, and even if you could they are being charged far more than previous generations for the benefits Social Security is meant to provide.  To pay for the boomers you will need to come up with over 50 Trillion in the next 20 years.  Your little 4% can't provide that.  Add in the 20 Trillion in other debt ( in which is includes the money the US Government owes the Social Security trust fund)  and the likeihood of monetrary issues for the dollar caused by either printing  or partially defaulting on that debt ( is there a difference? Not really)  and there is no chance at all Social Security will survive.

buckstopshere's picture

Concierge services work out for those who already have insurance with high deductibles and catastrophic coverage and who might need office visits more than twice a year.

House calls can be dangerous, though. I mean for the doctor.

TwelveOhOne's picture

While in the waiting room, I heard my doctor's staff fire a patient over the phone.  Apparently, their blood test didn't show the drugs they were being prescribed.  Thus, doctor was participating in a drug scam (one the insurance companies don't approve of).

erkme73's picture

A) you shouldn't have been able to overhear that conversation (HIPPA), and b) if the patient is non-compliant, then a good doctor will shed that load.    If the patient has a chronic condition that requires intervention, and the patient is not taking the prescribed meds, then the doctor is faced with a sicker patient that consumes more time and resources.  Plus, doctors don't like it when they provide a script that the patient doesn't take their meds. 

It's one thing to have a doctor TRYING to prescribe uneeded meds.   If the patient doesn't feel they need them, they tell the MD at that point.  If the MD still writes the script desptie a patient's objection, it's time to find another MD at the point.   IF the script is written, and the patient later feels uncomfortable or changes their mind about needing it, a discussion with the MD is appropriate.

Point is, there are just too many variables at play to label the doctor a scammer.  Could be, absolutely, but it could just be a case of a stubborn non-compliant patient as well.

chiquita's picture

My 99 year old mother was fired by a gerontologist about 15 years ago because she refused to take any medication.  The young female doctor wanted to put my mom on some sort of preventative meds that were totally unnecessary.  When my mother said she wasn't interested in taking any prescriptions because she had never needed anything and was not sick, the doctor wrote her a letter saying she would no longer be her doctor.  Instead of seeing a healthy elderly woman who had gotten to where she was by NOT taking medication, this doctor wanted to complicate her health by giving her medication she didn't need.  Today my mother still takes only baby aspirin.

 

erkme73's picture

And your mom is better off for it.   My wife is an ER MD, so she is immune to most of the big pharma reps that normally visit specialists and family practics docs.   But she feels other pressures.  Whether it's practicing CYA (issuing million dollar workups for heartburn), or pushing unnecessary procedures to drive up revenue units, it exists.   

There's also no doubt that younger doctors have been indoctrinated by big pharma to push drugs for everything from sleeping to breathing.  It's sickening.  And the only recourse, as a patient, is to part ways with docs that clearly don't appear to have your best interets in mind (even if the docs think they do).   Sucks, but it's like that in pretty much any profession.

FreedomGuy's picture

Young doctors are not indoctrinated by big pharma. They are likely not to have much interaction during their training any more. They also do not put a spell on anyone.

If your wife is in medicine you should know better or talk to her more.

What happens in medicine is that you have a lot of different and competing meds that are proven to work. Once you make a diagnosis then you have to cross reference a formulary, not to mention a couple billing codes that may pertain to the use of the med. The doctor is now caught between mulitiple competing forces depending on the age and condition of the patient. He/she ethically needs to treat whatever was just diagnosed with something proven and not just hype. The insurance company may or may not pay or demand the cheapest. The patient may not want to buy or may not want to take it. If they get worse then the doctor has a problem because with cost controls a noncompliant patient getting worse will pull down their averages with complications.

I am wading through MACRA-MIPS, myself, right now. The problem is a lot of general wording that does not clearly say what you need to do and what covers the three key requirements for MACRA to both avoid payment penalities and get in on bonuses. Put a bunch of noncompliant patients together and you will start going in the red. Also, with ACO's (Accountable Care Organizations) you get even more disincentives to treat sick people. They can bust your cost curves.

It's not "like that" in all professions. In all professions you need to purchase or use products and services, including meds in medicine. You sit down, let people make their case, cross reference with what you know or other sources and you make a decision. In medicine because it is almost all third party, the payers are making a lot of the decisions for the other two parties whether it is government or private insurance.

Montgomery Burns's picture

Overhearing one side of a conversation on the phone with no way to identify the actual patient is not a HIPPA violation. 

 

buckstopshere's picture

It's not like patients are sitting in a waiting room blindfolded and wearing ear plugs.

TwelveOhOne's picture

Agreed.  I think my three down-voters were due to my omission of the word "unwittingly", as in, "Thus, doctor was unwittingly participating in a drug scam" -- I didn't mean the doctor was in the wrong here, other than as you pointed out, the HIPPA violation.  I was rather taken aback to hear it, but I do know of people in this town who abuse the heroin-based drugs, breaking their ribs and ankles constantly in order to get the pain meds (whether the break is real or not I don't know, but I would think the doctor would do the right testing before writing the script).

I still see this doctor and I do not think he is a scammer.  Apologies for poor word choice.

W.M. Worry's picture

It's not the doctor participating in a scam. If you are prescribed a lot of opiates and not taking them it can be assumed that you are selling them since the street value is much higher than your precription cost.

TwelveOhOne's picture

You are absolutely right, that is what was happening, I worded my comment very poorly (see my other response just now).  I still see this doctor, I don't think he's participating in s scam wittingly, and I understood right when I heard the one-sided phone call that he was firing his patient because patient was dealing the drugs that were being prescribed.  Sorry about that...

mary mary's picture

Why not?  My (limited, but whose isn't?) experience is that people in other countries have different cultures, diets, and habits, but the same intelligence and the same range of honesty as Americans.  It's the GOVERNMENTS which are different.  Every government is corrupt, but in different ways.  Power corrupts.

J bones's picture

Ive been told +100 times there will be no social security when i retire....

nmewn's picture

Make it 101, of course your expectations may be a tad high.

They could always lower those expectations for you while still calling it "social security" and it wouldn't be a lie ;-)

GreatUncle's picture

Sad but lowering life expectancy might be the only way to deal with this.

Was that the plan?

mary mary's picture

My plan is to remove all Welfare from Social Security.  You get out what you paid in.  No exceptions.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) mary mary Jan 16, 2017 11:07 PM

My plan is to get government completely out of all of it - not immediately but over a certain period of time.  If people need help there are efficient ways through family, neighbors, churches, charities, etc.  It would force people to actually interact with others instead of simply demanding "their check" (other people's money in many cases) from the Central Planning.

nmewn's picture

Sadly (like the guy says below) when the world is run by dweebish accountants your "healthcare" may very well be rationed by a government that always over-promises and under-delivers.

Of course the upside is, us "old guys" don't have much to lose at that point so the problem always seems to rectify itself...off the books ;-)

John_Coltrane's picture

I think the obesity epidemic will take care of this problem. Land whales rarely survive past 60. So, they won't be collecting either SS or medicare.

They could try returning to the ocean where their low density blubber would float them nicely while insulating against the cold. A new oceanic species?

Seriously, at least 1/3 to 1/2 of the current under 60 population won't make it past 60.

Montgomery Burns's picture

You obviously don't work in a hospital. Plenty of grossly obese people survive past 60.  Unfortunately they suck up a huge portion of health care dollars. 

SmokeyBlonde's picture

If you are smart enough to ask the question, you are probably smart enough to intuite the answer.  (In this situation: yes.)

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) J bones Jan 16, 2017 9:14 PM

There will. It's just a loaf of bread will cost you $100 and your SS check will still be $1000/month due to the government claiming that inflation is still roughly zero - therefore no SS adjustments are needed.  Good luck with that.

HRH Feant's picture

Exactly. Now is a great time to learn how to make bread and how to grow lettuce / kale / greens.

TwelveOhOne's picture

Protip: spray the lettuce and kale with one teaspoon dish detergent, one teaspoon olive oil, and the rest water (in like a quart sprayer), and spray the leaves every five days once you start seeing those darned cabbage moths start appearing.  They take cale leaves down to the spines in a couple days if left alone!

That or, the old adage, "grow enough for you and them."

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) TwelveOhOne Jan 16, 2017 9:21 PM

How do you stop the ground hogs, deer, and rabbits?

HRH Feant's picture

Either plant extra or build a fence.

TwelveOhOne's picture

I like both the other responses.  Also, for deer, fishing line between posts can help.  It has to be strong enough that they can't break it walking into it, and thin enough that they can't see it easily.

We're doing a big garden this coming summer and will build a greenhouse as well as a fence to keep the other critters out.  There are rabbits and ground hogs nearby.  Turkeys also, not sure if they like a garden or not.

Issues with the fence: it needs to be high enough, and should also "flare out" at the top so something climbing it would tend to fall backwards.  Also needs to be dug in, so they can't burrow under it.  I think a good compromise I saw recently is to have an extra foot or two, like an "L" so it comes out from the fence wall, and bury the bottom leg of the "L" an inch or two down.  Then something hitting the fence and trying to dig will continue to hit the fence (below it); most critters aren't smart enough to know "start two feet out and I can burrow under it".

To stop rabbits from multiplying, you divide them. :)

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) TwelveOhOne Jan 17, 2017 1:52 PM

Good stuff.  Thanks!

mary mary's picture

I've been told +1,000 times there is a place in the clouds called Heaven, and a place inside the Earth called Hell.

nmewn's picture

I wonder if my congresscritter or Obama is on Medicare ;-)

mary mary's picture

All I want is the same Health Care Plan my Congresscritter has.

P.S.  I believe the term Congresscritter first appeared right here on ZH.  Been a few years.

Encroaching Darkness's picture

Think it came originally from the old "Pogo" comic strip - it may have migrated here to ZH a few years back.

chiquita's picture

You have to be 65 to be on Medicare.  Obviously Obama is too young and it depends on how old your representatives are--if they are old enough, they have Medicare and their Part B is the best damned Blue Cross plan you can imagine (my mom has it--my dad was a Fed civil service pensioner so they got pretty much the same plan).  

I understand doctors opting out of accepting Medicare or any other insurance they don't want to deal with--it's their prerogative as small business people.  However, as American citizens, it's my understanding we don't have the option to opt out of Medicare unless we self-insure, which takes big bucks.  Given how the vast majority of us don't have the means to self-insure after age 65, if a large number of doctors decide to opt out of caring for Medicare patients, what will that look like?  It won't much matter if Medicare goes bankrupt--it will be worthless to the recipients anyway if they can't get treatment with it.

Osmium's picture

Medicare and Obummer Care boh have the same issues.  The SKYROCKETING cost of health care.  Until costs are brought under control, there will be no solution.

mary mary's picture

There was no skyrocketing cost of health care until President Lyndon Johnson created Medicare and Medicaid.  Those are the two causes of skyrocketing health care.

rejected's picture

Yep,,, any time government money gets involved, prices rise...

FreedomGuy's picture

Good observation, Mary. Not many people really know that. If government reliably knew how to get stuff on the cheap then fighter planes would be bargains.

What Medicare and to a lesser extent private insurance did was industrialize medicine. It is a production game now with all sorts of complex biliing, cost controls, gates and contracts. It used to be pretty much a self pay or related to what people could pay and had a very large charitable component at the physician and hospital level. Notice how so many hospitals have Christian and Jewish or charitable names.

When government takes over or as it takes over the charity ceases and the government will bear the costs and unlimited demand. It is why I warn anyone who thinks single payer is the cheap way to go that they do not understand the behind the scenes cost shifting that is done now

I will also assert that there is really no solution where total medical expenditures go down. We have a large, ageing, sedentary population that can things that were never available before and at ever later ages. Total health expenditures are going up no matter what. The question is who will pay, how it will be paid and what limits there will be.

cowdiddly's picture

Your calling this health care, but the sad reality the current iteration is nothing more than a network marketing scheme for Big Pharma. It is in no way related to your health or care.

Its about money, power and control.

Do some poking around on a dude named Morris Fishbein and what happened to the Board of Directors of the Harvard Medical School and AMA back in the 30s- 50s and you will see how they powergrabbed this entire thing long ago. It will make you mad and explain a lot of things.

They got you for everything and most if not all of your net worth on the exit.

FreedomGuy's picture

You don't know shit. Do you even work anywhere near medicine? Do you know the current relationships of most medical schools and pharma? No, you don't. You and most everyone just parrot the SOS and spin up conspiracies. You know you don't like the price of meds. Great, start with that and then just propose your own genius solutions.

NurseRatched's picture

Social Security and Medicare have only 1 real problem: Old folks just aren't dying quick enough.

Palin had it right when she spotted the "death panels" creeping in.

Miffed Microbiologist's picture

Socialize medication here will solve the problem by rationing care. This is the goal. Soon people will beg for it as a panacea.

Miffed

nmewn's picture

 

OBAMA: “I don’t think that we can make judgments based on people’s spirit. That’d be a pretty subjective decision to be making. I think we have to have rules that say that we are gonna provide good quality care for all people. End-of-life care is one of the most difficult sets of decisions that we’re gonna have to make. But understand that those decisions are already being made in one way or another. If they’re not being made under Medicare and Medicaid, they’re being made by private insurers. At least we can let doctors know and your mom know that, you know what, maybe this isn’t gonna help. Maybe you’re better off not having the surgery, but taking the painkiller.”

The Audacity of Compassion.

rejected's picture

Well maybe so,,, but everytime I have went to a SS office it was packed with young mothers and children.

I think MaryMary has it figured right.