Issue Position: Medicare

Issue Position

DALE BLANCHARD TOTALLY OPPOSES THE PAUL RYAN BUDGET BECAUSE FOR MANY REASONS BUT THE NUMBER ONE REASON IS THAT IT ENDS MEDICARE AS WE KNOW IT FOR ALL AMERICAN BORN AFTER 1956.

PAUL RYAN'S BUDGET REPLACES MEDICARE WITH A VOUCHER PLAN AND TELLS FUTURE SENIORS TO TAKE $6,000 TO $7,000 PER YEAR AND GO OUT INTO THE PRIVATE HEALTH INSURANCE MARKET AN PURCHASE A HEALTH INSURANCE POLICY.

NOW WHAT KIND OF INSURANCE POLICY CAN A 65 YEAR OLD PURCHASE WITH JUST $6,000 OR $7,000?

NOW WHAT KIND OF INSURANCE POLICY CAN A 65 YEAR OLD PURCHASE WITH JUST $6,000 OR $7,000 10 YEARS FROM NOW IN 2022?

NOW WHAT KIND OF INSURANCE POLICY CAN A 75 YEAR OLD PURCHASE WITH JUST $6,000 OR $7,000 20 YEARS FROM NOW IN 2032?

FINALLY, WHAT KIND OF INSURANCE POLICY CAN A 85 YEAR OLD PURCHASE WITH JUST $6,000 OR $7,000 30 YEARS FROM NOW IN 2042?

THE ANSWERS ARE, NOT VERY MUCH.

UNDER THE PAUL RYAN BUDGET 85% OF ALL PEOPLE BORN IN 1957 AND EVERY YEAR AFTER WILL BE IN POVERTY BY THE TIME THEY REACH AGE 75 DUE TO THERE ENORMOUS OUT OF POCKET COST OF MEDICAL INSURANCE.

DALE BLANCHARD'S POSITION ON MEDICARE:

Dale Blanchard is totally dedicated to implementing policies that will maintain the Medicare program in its Current form for current recipients, Baby Boomers and Future Generations.

Long Term Deficits are those Deficits covering periods in the future, 10 years out and further. These Deficits are rooted in Age Demographics related to our nation's Baby-Boomer Generation reaching retirement age. Beginning in 2011 the oldest of the Baby Boomers turned 65 and are now eligible for Medicare. Next year they will reach the age where they will be eligible for full Social Security Benefits. Ten years from now, in 2022 the majority of the Baby Boomers will reach the point where they will be eligible for Medicare and full Social Security Benefits. In addition, the oldest of the Baby Boomers will reach age 76, the earliest of the high cost medical years. From there on Entitlement Cost will begin to explode.

It is these long term projected Federal Budget Deficits that present the greatest threat to the American Economy and our long term high standard of living. If not properly addressed these long term projected deficits will either threaten the vitality of the Social Security and Medicare Benefits of Baby Boomers and younger generations or cause our economy to collapse under the weight of unsustainable Federal Borrowing.

What to do about it. Republicans want to allow younger citizens to opt out of Social Security which will leave the system with even fewer resources to fund these programs. They also want to turn Medicare into a voucher program for people born after 1956 by giving these people a $7,000 voucher to use to go out and purchase a health insurance plan in the private sector. Now exactly what kind of Health Insurance Policy can a 65 year old person purchase with just $7,000? What kind of Health Insurance Policy can a 65 year old person purchase with just $7,000 ten years from now? What do you think that person can purchase with $7,000 when they turn 75 twenty years from now? How about when that person turns 85 years old 30 years from now? On the other hand many of my fellow Democrats want to only increase taxes on the top 2% of Income earning Americans. Though the top 2% of American Income Earners make a lot of money, when you do the math you are not going to raise enough money to properly fund these entitlement programs by just taxing the rich without charging them a top marginal rate that would significantly impede economic growth.

What is needed is a broad based increase in the FICA Taxes that fund Medicare and Social Security.

Medicare: In my plan, the Medicare portion of the FICA Tax is going to have to be slowly increased over 16 years from the current combined rate of 2.9% [1.45% on the employees and 1.45% on employers] to a new combined rate of 4.5% [2.25% on the employees and 2.25% on employers]. This represents a 55% increase in the Medicare Tax rate which no one will like but it is necessary because the ratio of retires to every worker is going to increase by 55% from the current ratio of 1 retiree for every 3.3 workers to 1 retiree for every 2.3 workers. Those are just the demographics. Those are the facts. I didn't make them up. And as much as we want to wish them away, it's not going to happen.

The reason why I say increase the rate slowly is that if you increase the rate slowly, by a combined rate of .1% [.05% on the employees and 0.05% on employers], it will barely be noticed in the economy. The medium salary or wage for a full time worker is about $50,000 per year and that worker will receive a $1,500 per year raise on average over each of the next 16 years in 2012 dollars. The annual increase in his or her Medicare FICA Tax will be only $25 per years. [To be economically honest, the increase would be $50 when you include the employer's share because essentially employers will pay employees less when their share of employee related taxes increase.] Any resulting decrease to aggregate consumer demand would easily be replaced by the Federal Reserve slightly lowering the interest rates that it charges member banks which will increase the American Money Supply.

In this way the Medicare will raise a sufficient amount of revenues to maintain the program in its Current form for current recipients, Baby Boomers and Future Generations.

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