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Thursday, December 13, 2012

Going Geriatricidal

 

Naked Capitalism featured a piece today by Matt Stoller (Link). The not so surprising conclusion by Matt was that moving the age for Medicare availability from 65 to 67 will actually cost some lives. The article concludes that the two-year change in federal medical coverage will result in 1,261 additional deaths each year.

 

I’m reading this, thinking, “Hey, that’s not so bad!” Matt saw it differently:

 

Or we could leave things as they are, with a Medicare age at 65, and no extra seniors need die.

 
I’m not sure that Stoller is right about this. I wish he were, but the numbers say he’s wrong. The fact is, hard choice have to be made, and yes, people will die as a result. The article fails to analyze the benefits of moving the Medicare puzzle around. Fortunately, the Congressional Budget Office (CBO) answered this question back in January (Link). The conclusion:

 

CBO estimates that raising the Medicare eligibility age from 65 to 67 would reduce federal Medicare outlays, net of premiums and other offsetting receipts, by $148 billion from 2012 through 2021.

 

Take the two estimates together, total Early Exiters (EEs) over ten years = 12,610. This means the overall savings comes to a very tidy $11.7m per EE. A big bang for the buck, so to speak.

 

When Congress raises the age limit for Medicare (this will happen in 2013) it will be the first step on what will prove to be a very slippery slope. There has been much talk about a dreaded “Death Panel” that will decide who “Wins” and who “Loses”. Changing Medicare age availability is a Death Panel decision. It’s interesting/fitting that a majority of Congress and the President will kick the process off.

The CBO should do some more studies on potential savings. Sort of roll up their sleeves and have a look, as it were. I wonder what the savings might be if some new “rules” were adopted. On the list might be:

 

-No new knees or hips after age 85.

-No open heart surgery for men over 82. (Forget about that triple bi-pass that will keep you around another five years.) Women would be eligible up to 85. (Think of the pissing match that would cause)

-A diagnosis of late stage Alzheimer’s gets one on a fast track to “Hospice Care”. (No meds, palliative only. Door to door, so to speak, averages three weeks)

 

This subject will be on the front page for the next year while the Medicare “fix” is tossed around. After that,  it will come up regularly when other ways to “save” a few bil. are found. I figure someone has to make some black humor from this, I might as well start now. Before you toss a brick my way, consider that I’m 62 and in four years, I will be a real player on this stage. Who knows? I might even become an EE’er. This joke is on me.

 

Comments

  1. I notice that these “analysis” are completely one sided.

    It is a well established medical fact that extra stress and/or lost sleep (for extended periods) takes years off a person’s life.

    Forcing younger generations to work extra years and extra hours will result in thousands of additional “early” deaths. Any analysis of the costs of medicare that do not include that are bullshit by definition.

    Sorry Baby boomers, you spent way beyond your means and you will get the retirement you saved for — nothing more. Read my lips, the politicians can promise any thing they can convince you of — but there is still no free lunch.

    • Bubba, you are a Dick! I can tell you that when a person retires and stops working things go down hill from there. You sleep later, you eat more, and then you just get bored. Being retired is like being long term unemployed. You get up and ask yourself, “what am I going to do today.” I’ll eat breakfast and read the paper cover to cover then I have 12 more hours to figure out what to do. I’m 74 and was in pretty good health when I retired at 68. My wife and I did the travel thing for a couple of years. We visited the kids and grand kids frequently. I fixed up some stuff around the house. We expanded our veggie garden. You do a lot of sitting around. That extra stress and loss of sleep was keeping me at my peak. If I lost a couple of years due to the stress and lack of sleep and I hit 90 instead of 93 so be it. Who wants to live in a nursing home for the rest of their lives. That’s not living. That’s waiting to die.

      • @anon — so go back to work and quit whining.

        I assume I will have to work until I am dead (or pretty close to it). I sometimes work an extra job/extra hours when I want to get something extra for my kids. I think that is my obligation as a parent.

        I do not believe it is my obligation to work extra hours so some lazy dolts can retire at 65 vs 67. Social security and medicare are victimless crimes. All those “free” benefits have to be taken from someone else, and those victims have to work extra hours (beyond what is needed to support their own family) to pay for that theft. Having Congress “mandate” this crime doesn’t make it legitimate. It is still a crime.

        FDR — the president who created Social security fraud — never explained how he was paying for the first benefits. It was a ponzi scheme from the start. The first pyramid scheme winners collected benefits for years while paying in for a week or two…. those benefits were made possible because there were more new entrants to the pyramid scheme than existing members (ie WW2 war vets outnumbered old people, and baby boomers outnumbered WW2 vets). Once a generation came along that was less than 4 times the size of the previous generation, the pyramid scheme was going to collapse no matter what.

        Trying to keep an artificially low retirement age just made things worse. Lying to people that their money was in a trust fund was an extra fraud on top of another fraud. These crimes were committed by Congress — and they get a separate (and much better) pension, also paid for by us.

        Baby boomers are responsible for the national savings rate from 1980 to present — which was less than 2% even during the biggest economic boom period of history. This compares with 7-8% in your parents generation. The sub 2% savings rate is 100% the baby boomer’s fault, like it or not.

        And that sir, is what your generation gets to retire on. Less than a quarter of what your parents got. Its your own fault.

        • PS — while FDR created the biggest Madoff / ponzi scheme in history, he was right about something else.

          FDR (a big labor union supporter) said that public employees should never be allowed to form a union, as it would threaten the existence of the republic. It would essentially be a coup. Unfortunately, that advice was not heeded.

          Today, public unions collect 2-3 times in pay what the private sector gets. Our taxes, utility costs, etc are all bloated so they can overpay themselves AND ALSO get a pension.

          And like it or not, those empty promises are going to make people reconsider all the unfunded promises of baby boomer’s great economic debt bubble.

        • I’ll tell you this – if I was in the age group that was bankrupting this country, I’d hand someone the shotgun right around the time I got to 70-75 and I’d just have them put and end to me. Its either them, or the politicians that have mismanaged their “entitlements” over all these years. As a twentysomething who “gets it”, you have no idea how quickly I am growing to HATE old people.

          No one has any responsibility for their actions anymore. You trusted the government to manage your retirement? Your dumbass fault, not mine. I pay more and get less benefits? You old fossils can just go extinct for all I care. I can say without any doubt that if it was me in your shoes, I’d just stop sucking off the government dime and accept responsibility for my actions. You boomers seem to have forgotten what responsibility is.

        • Bubba, you’re still a dick. I have paid over $140,000 in SS taxes as well as matching employers so put it at $280,000. I have also put in over $100,000 in medicare taxes. So, I have paid in $380,000 into the system and you still think I am a freeloader. Get real. I also sit on over $900K in my traditional IRA and $120K in my Roth so I think I have done well to prepare for my retirement. I do not have a pension from my previous employer or a 401K. My house is paid for as well as my two cars that I put maybe 5000 miles on a year combined. I am a veteran of the US Air Force and I do not draw benefits from that. I also waited until 68 to retire not 65. Piss off.

          • @anon — if what you say is true (the internet sometimes lies) … then you are the exception. The average baby boomer does not have $900K in a retirement account, never mind the other stuff. Try $35K for the average boomer. You are “rich” (according to the crooks in Congress) and you will be penalized for being fiscally prudent. You will face means testing and you will still get a better deal than younger generations.

            Younger generations are forced to contribute to the SS pyramid scheme, and we will get zero back. We are forced to pay into medicare even though it is scheduled to go cashflow bankrupt even before SS pyramid scheme. Boo hoo to your whining. You will get pennies on the dollar back from both scams — younger generations get zero. If this crime was being done to your whiny generation, you would be screaming about age discrimination, because that is what it is.

            You skipped over the part where your parents left your generation with minimal taxpayer debt — your deadbeat group is leaving us with $17 trillion worth of on-balance sheet debt and another $65 trillion (and counting) in off balance sheet debts — for the fraud you call an “entitlement” even though younger generations are not entitled to anything but a huge bill.

            Your parents generation averaged 7% or 8% in national savings rate — which allowed them to retire at 65, with an average life expectancy of 68 (three years of golf). Sure, half lived a lot longer, but half died a lot sooner. On average they got three years.

            You deadbeat boomers had an average national savings rate below 2% — which you arrogantly assume will allow you to retire at 65 with an average life expectancy of 82??? Are you all senile? You save a quarter as much, and expect to play golf for an additional 15 years? Get a clue morons. You didn’t save enough to enjoy anything like the retirement your parents got — you saved a quarter as much and you will have to make that 25% stretch an extra 15 years. Good luck with that and enjoy elderly public housing if your are lucky

            If you need us, we will be working three jobs to pay student debts so that asshole Prof Krugman can enjoy his Princeton pension retirement writing about how we should be taking on more and more debt for his failed economics experiment. After we pay for that asshole’s retirement, we can dream about saving for a house (not the McMansions you lived in, a much smaller house). Saving for our own retirement is a fantasy — so fuck you if you think we should help pay for baby boomers retirement.

            Your generation will get the retirement you didn’t saved for

  2. If the “death panel” says no knees or hips after age 85, people will precautionarily have them replaced at age 84, including some people that ultimately wouldn’t have needed the surgery. Such an age restriction could very well end up increasing the number of hip/knee replacement surgeries.

  3. “Forcing younger generations to work extra years and extra hours…”

    What a strange perception of “work.” I’m working more at age 67 than I ever did before I was 60, and it’s generally pleasurable. It also provides financial security, which reduces anxiety. And I think the mental exercise may be a hedge against Alzheimer’s.

    The concept of “retirement” originated in a very different era, when most people were either dead or in poor shape by the age of 65.

    My father was quite depressed when he was forced by corporate rules to retire at 65. He perked up a lot when he got a consultancy job in India, a year later.

    Work is not necessarily a punishment.

    • Truth

    • You are right charles. We are made to work until we cant work any more. Why in the world would anyone think we are not?
      Ok, i’ll answer the question i just asked. Because of unions. To them, it’s all about getting paid for not working, even while they supposedly have a job.

      Work until you die. Nobody owes anybody else a living to sit around and play shuffleboard. It is a commie union concept to think otherwise.

    • @Charles — yes I said “work extra years and extra hours” and that is what I meant.

      I don’t know what crazy assumptions you jumped to, but here are the simple facts: younger generations do not get any pension at all. Our pensions were canceled for us (by management / older generations) without our input much less permission. 401K contributions (if we get one) have to be made for ourselves — and even then we face strict limits enforced by a corrupt state. There is no way to save for a $50K pension (never mind the gravy train that public employees get) when you are limited to $17K per year contributions. Even though we are required to contribute to the ponzi scheme known as social security, the crooks in government say it will run out of cash long before we reach 60 much less whatever age you are whining on about.

      In short, we will have to work until we are dead. That is already baked into the cake no matter what empty promises the politicians make.

      The EXTRA YEARS and EXTRA HOURS is what would be needed to allow you spendthrifts to retire at 65 instead of 67. Social security and medicare are not victimless crimes — someone has to pay for your early retirement, there is no free lunch. Where does your senile brain think the money comes from?

      If I work overtime, it is to give my kids a better life — not to pay for a generation that wants to retire like its 1930 and play golf while younger generations work off $80 trillion of some old guys empty promises.

      Retirement age for selfish baby boomers should be 80 — or whenever you can afford to pay for it yourself. even 67 is a huge gift, paid for by younger generations (on top of your debts that you are sticking us with)

      Get back to work and pay your own debts. Pay for all the public union pensions that YOU PROMISED and did not fund. Pay for your own retirement costs. Pay for the massive public debts incurred on your watch. Fix the potholes and bridges that were roads when your parents retired. Stop expecting “free” entitlements –they are not free and never were. grow up and get a clue

      • Bubba Joe… well said. If they were gone, they wouldn’t be a drain on our economy though.

        • Bubba and Alex,

          Excuse me, but I and my employers have paid more into SS than I will ever get back after I retire. That’s a fact. I don’t blame you guys for being even more upset. It is the CURRENT retirees that are bankrupting the system. I hope you guys are bombarding your representatives with calls and e-mails. Medicare actually becomes really important because it is almost impossible to get decent private health insurance at any reasonable cost when you get moving into your sixties.

          • You paid “more” into SS than you will get out, which is a partial loss

            Younger generations are paying higher SS tax rates (and on larger sums) and we will get back zero.

            SS is a giant pyramid scheme, and as with all pyramid schemes, the last group to join loses everything. Just shut the scam down now before it creates even more animosity.

            And while we are at it — eliminate the pensions that public unions stole from us. Public unions are unethical and immoral (according to FDR — I think they are worse than he did). Voiding this theft will make most of the bankrupt states solvent again, allowing us to focus on fixing healthcare ***COSTS*** which would benefit the young and the old alike.

  4. Charles, good comments and I concur. I don’t know what to tell you except that there seems to be a crew of posters on this here fine blog who have total victim mentalities. Whiners who think the world owes them.

    Not denying that the Boomer generation created a mess but so has every generation prior. There’s nothing new about that. Similar comments made here about that the other day. But, in times past, people didn’t blame everyone else for their lot in life. They set about to change or improve it.

    I’m almost 55 and would be more than okay for the retirement age to be increased NOW. I’ll likely work til I’m 70 just because I want to…I like it. It is totally kick-ass finding something you really like doing, with customers who value what you’re offering and I get paid to boot. How good is that?

  5. Bruce, while you may be an early exiter, you are currently and assumed to be of a financial condition whereby you can afford the coverage that Medicare would otherwise provide during the ‘gap’ years. Others, perhaps not so much.

  6. The 800 pound Gorilla in the room is the discrepancy between what Americans pay for healthcare services and drugs as compared to other developed countries. The USA pays 2.5 times the OECD average.
    http://www.pbs.org/newshour/rundown/2012/10/health-costs-how-the-us-compares-with-other-countries.html
    This disgrace is caused by the “legal corruption” of the Drug Company, Lawyer, and Medical Society lobbyists!! A 30% reduction across the board is available the day we stand up to “K” street.
    Why does not one politician speak about this? Money talks and the people suffer! Disgusting! I advise all to search out your best Medical tourism options for the future. I now Live in Colombia where care is first class and prices are fair.

  7. Yes, and the 600 pound gorilla is how doctors have become hustlers in addition to medical providers. I made a comment on this blog sometime back describing how doctors try to sell me something additional just about everytime I go in (I’m healthy so I basically just have annuals).

    When I ask questions about these tests they want to do, I don’t like the answers. They’re weak and I’m evidencing no symptoms of anything. This has been driving me crazy for awhile because I don’t hear anyone else complaining about it. But, this is cleary a HUGE wasted cost for the patient and the insurance companies.

    FINALLY, some mainstream credibility has surfaced about this fraud. Just last weekend, 60 Minutes did a segment about it. They attribute 10% (could be low, IMO) of medical costs in the USA are just from medical professionals selling unnecessary stuff, for the benefit of themselves or their employer. The total of this is in the Billions of dollars. It’s a good watch and is the first segment:
    http://www.cbsnews.com/video/watch/?id=50136260n

    • Sometimes I think we should just self-insure. That’d end a lot of problems.

      In the end, what we pay in premiums and deductibles to insurance companies has to be less than what the insurance companies pay out plus the profit they earn. So there’s no free lunch for the insured, just the idea that you spread your potential costs out over the length of time you choose to be insured.

      And the medical profession certainly is complicit in the grab for insurance money. Doctors suggest bogus testing all the time. And hospitals have two fee schedules: what insurance companies pay once they negotiate the bill down, and what the uninsured pay without having the muscle of the insurance industry backing them up.

      Speaking from experience here, my wife’s gotten tested for bogus stuff three times this autumn, and my brother’s week long stays in the hospital for bone cancer would have cost him $100k ($100k for a week!) had the insurance company not “negotiated” the price down to $8k per week (the billing cycle for him was weekly; he was in the hospital for months on end).

      Something’s gotta give. It’d be nice not to have to move to New Zealand.

      Great post, Bruce. Keep the faith.

  8. Bruce,

    Recently you have clearly hit on some critical issues in the budget debate, especially the considerations on Medicare and SS. Nice job being at the forefront of deeper thinking on these issues.

  9. But What Do I Know? says:

    I like some of your “rationing” suggestions, Bruce, and they seem to make sense to me. On the other hand, raise the eligibility age to 67 to save $148 billion over ten years? Why bother?

    $14.8 billion per year doesn’t seem like much in exchange for basic health insurance for say, 10 million people–only $1480 annually. Try to buy health insurance for that on your own. . .