Medicare Called the Real Ponzi Scheme

Rick Perry made headlines when he said Social Security was a “Ponzi scheme,” but Medicare is even more of a Ponzi scheme for most Americans, according to new research.

And Obamacare will raise the Medicare payroll tax only for those Americans who actually do pay their own way by contributing as much in Medicare taxes as they receive in benefits.

“Even though much vitriol of late has been directed at Social Security, Medicare is arguably far more of a Ponzi scheme than Social Security ever was,” said Christopher J. Conover, a research scholar at Duke University’s Center for Health Policy and Inequalities Research and an adjunct scholar at the American Enterprise Institute.

Writing in The American, the Journal of the American Enterprise Institute, Conover says his research shows that over a lifetime, Medicare beneficiaries typically receive from two to six dollars in benefits — depending on their marital status and other factors — for every dollar they paid in Medicare payroll taxes.

In contrast, beneficiaries who turned 65 in 2010 paid between 89 cents and $1.51 in Social Security taxes during their working years for every dollar received in Social Security benefits.

“The visceral feeling many retires or near-retirees have about Social Security — that they have ‘paid’ for those benefits through their lifetime payroll tax contributions — is much closer to being true for Social Security than it is for Medicare,” Conover observes.

Workers currently pay a 2.9 percent Medicare payroll tax. But under the healthcare reform legislation engineered by President Obama and the Democrats, beginning in 2013 the rate will rise to 3.8 percent on income above $200,000 for individuals and $250,000 for couples filing jointly.

“Ironically, only those who were already paying their own way will see their payroll tax contributions increased by one-third under [healthcare reform]. Unless we address Medicare head-on, everyone else will continue to enjoy benefits that greatly exceed their payroll tax contributions.”

Posted via email from Global Politics