The Motley Fool Discussion Boards

Previous Page

Retirement Discussions / Retire Early Liberal Edition

URL:  http://boards.fool.com/that-is-an-almost-nonsensical-way-to-look-at-it-30358579.aspx

Subject:  Re: Poll: Obamacare Effect Date:  11/3/2012  2:11 PM
Author:  tjscott0 Number:  46074 of 58805

That is an almost nonsensical way to look at it. A portion of Medicare is paid for by payroll taxes. But a portion (mostly Part D) is paid from the general fund by statute

The above statement is wrong.

The SMI trust fund has different revenue sources. There are no payroll taxes collected for this fund, and enrollment in Medicare Parts B and D is voluntary. Individuals enrolled in Parts B and D must pay premiums, which cover about 25% of program costs.3 The other 75% of revenues for the SMI trust fund primarily comes from general revenue transfers. Other sources of revenue include interest paid on the U.S. Treasury securities held in the fund and Part D state transfers for Medicare beneficiaries who are also eligible for Medicaid (dual-eligibles*

Thus roughly 50% of the medicare program comes from federal general revenues. As the number of beneficiaries surge due to baby boomers & rampant health care costs increases will result in an ever increasing portion of the federal revenues paying for the program reducing funding for other federal programs. Medicare is currently 15% of the federal budget. If no reform is enacted it is likely to double by 2030.**


*http://www.votefacts.org/medicaremedicaid/9/
**http://www.concernedactuaries.com/Text/facts_about_medicare....
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us