It is not my goal to discuss the history of the Social Security Act. Social Security started out as a great idea in 1935 under the direction of President Franklin D. Roosevelt. Generations of people have received more from Social Security than they ever put into the system. It has saved millions of seniors from cruel poverty. During the '30s at least half of the seniors in this nation who retired, retired in poverty. The idea of Social Security made it possible for them to survive.
I believe we can keep Social Security solvent but we cannot continue business as usual. The money paid into Social Security must stay in the Social Security system. We cannot use the money for anything else and expect to have money to pay our retirees.
Imagine trying to save $10 every week to buy someone a Christmas present. You take the money instead and make a needed house repair. It would be understandable that you might have a house emergency but then the money for the Christmas present is gone. You have few options if you are now to buy the Christmas gift. You can borrow money on your credit card and spend the next year trying to pay it back. You might borrow it from a friend, which I never recommend. You can give a much less expensive Christmas gift. Or, you inform the intended recipient that you had to spend the Christmas money on a very important house issue and hope they will understand. In many cases the average person would understand if it were an emergency expenditure.
They might not be as understanding if you spent the money on golf clubs, pricey business lunches or a couple of dress suits.
Americans expecting to receive Social Security payments at retirement age will not understand, under any circumstances, if the money has been spent on something else regardless of the expense.
Can you imagine loading up a bus with seniors in Florida for a trip to California? They each pay $400 to cover the trip. When the bus gets to Las Vegas the driver stops at one of the casinos and gambles away all the money that was collected for the trip. The bus and the seniors are stuck in Vegas. They are broke and have nowhere to go. His one option might be to book another trip with some seniors in Vegas to take them somewhere and then he uses their money to go on to California and then return to Florida with his first group. He now has the problem of returning to Vegas to pick up the people waiting on their trip, but he has to come up with the money he already spent on the return trip to Florida. It becomes an ongoing cycle of madness.
Mismanagement of Social Security income will only further leave this nation of seniors broke with nowhere to go.
If through the years our country had collected the Social Security money from the people and wisely invested it, we would not have the troubles we have today with the system. The government has taken our money and used it for other ventures. Now we have to listen to the government's excuses. We hear that Social Security is broken. We hear there are too many people on the receiving end. We hear that there is not enough coming in and too much going out.
Currently there is still enough money to pay the massive number of people receiving Social Security. Actually, there is more than enough. Historically the excess Social Security receipts are not invested into the system, but go into the government's general fund and are spent on wars or any other projects the government deems necessary. Thus, we are living hand to mouth. Social Security recipients are dependent on the working people to pay the taxes so that the government can in turn pay out the benefits. As baby boomers retire, the population of retirement age individuals is much greater than those who are paying taxes. Therefore, we are in trouble.
Social Security can be saved if we put the money aside. We have to keep it away from Wall Street and big banks. They have proven to us how inept they are at managing money.
Our work force has declined. It takes working people to pay into the Social Security system. Even with the current employment force we are making the monthly Social Security payments. Can you imagine if we had an extra 25 million people in the United States employed and paying into the Social Security system?
We cannot pay Social Security/ Medicare benefits to those who have not paid into the system. If people moving into our country elect out of the Social Security system they should do so within 12 months of becoming eligible to hold employment in the United States. Citizens of the United States who choose to remove themselves from the Social Security system should declare by age 25 that they are not going to participate. People should be required to participate in the Social Security system for at least 10 years if they are going to be recipients of Social Security benefits. This of course excludes those who become disabled and are entitled to receive disability benefits.
We can continue on our current course but it's a highway to pain. We have to think about our children and grandchildren. Do we want them to have Social Security? On this path they will not enjoy the benefits we enjoy today. Some possibilities for saving the Social Security system so that our children and grandchildren might have something are as follows:
- Make 66 the magic normal retirement age and eliminate the early retirement benefit at 62. This sounds outrageous to people counting on Social Security at age 62. If we do not make some changes, the age of receiving maximum Social Security benefits will be pushed up to age 70 if not higher. Benefits received at age 62 will be pushed up to 64 or 65. If we will forgo the early Social Security benefit at age 62 we can preserve retirement at age 66. This would keep people working four more years, however, it would mean a stronger benefit at age 66. This would also pump more dollars into the Social Security system. The Social Security benefit doesn't pay enough when taken at age 62. However, if people will wait the additional four years it will keep our Social Security system solvent. There will be more people receiving Social Security than will be paying into the system by 2036 making the program lopsided. A person would receive full benefits at age 66. This would keep people in the workforce a little longer. However, allow those who have paid into Social Security for at least 30 years to be exempt from FICA (Federal Insurance Contributions Act) and federal income tax while they are ages 64-65. This would be like getting a nice pay raise during these years of employment and would be a gift from the government for working a little longer. The government is not receiving the FICA and federal taxes from this group but by the same token is not paying it out to them in Social Security until age 66. It's a win for the citizens and the country. Also, at 66 when individuals begin receiving their full Social Security they should not have to pay tax on their Social Security income since they have already paid on it in prior years.
- Stop nation building around the world. The money that is paid for nation building in places like Iraq, Afghanistan, Pakistan, Syria and so forth costs us billions and billions of dollars. This money comes out of the treasury that makes the Social Security payments. If we were not trying to be the savior of the world we would have more money to take care of our seniors.
- Stop unnecessary wars. Billions of dollars have been spent on wasteful wars. If we need to go to war then we should go and end it as quickly as possible instead of spending years and billions of dollars.
Stop the foreign aid. I'm in favor of helping anybody who needs real help. However, we are giving money we don't have. In many cases we are giving money to people who hate us. We should not have to give money to buy friends. We can continue to enjoy Social Security for years to come if we cut out all the money we give away to overseas dictators and nations who already hate us. Giving them money does not make them love us anymore.
Abolishing the Social Security system would financially destroy this nation since most retirees now depend on Social Security to survive. Therefore it is imperative that we make it better and more sustainable.
My first wife, Karen was on Medicare and for two brief periods she was a Medicaid recipient. It's strange how things in life turn out. Lyndon Johnson, The President who brought Medicare and Medicaid into existence is the one I waved to on the streets of Inez when I was about nine years old.
After fighting multiple sclerosis for about three years she knew her school teaching days were over. She applied for disabled Social Security benefits. The application and wait time for approval was about 18 months. Her monthly check from Social Security was $550. She also received her Medicare card. Previously she had lost her medical coverage. After she left her teaching position we bought into COBRA for several months but lost that because the insurance company was going through bankruptcy. The company folded and reorganized under a new name. In the process they dropped people like Karen who were going to be expensive to cover.
Losing health care insurance on the one person in the family who needed it was painful. My two sons and I could scrape the money together to buy health care insurance, but no insurance company would cover Karen due to her debilitating multiple sclerosis.
In many ways, Medicare was a lifesaver but most of the MS drugs weren't covered. In 1994 one of her drugs cost us over $1,000 a month. Another drug cost over $1,200 a month. At the time my total salary as a pastor was about $36,000 a year. This included all benefits and perks. Saying we were stretched financially would be an understatement.
After battling the progressive disease for eight years Karen's health had deteriorated to the point where she could not do anything. She could not feed herself. Her hands and head became very shaky. She could not walk. She couldn't do anything. After a brief hospital stay she ended up in a nursing home for six months. That was six tough months as written about in my book, Nursing Home Nightmares, America's Disgrace.
Medicare only covers a limited number of days in a nursing home. At the outset we did not know how long she would be in the nursing home. We applied for Medicaid. I didn't know anything about it but I was encouraged by the nursing home staff to get Medicaid. I went to our local county social services office. This was the same office where people applied for food stamps and other forms of public assistance. Sitting in that office waiting my turn was not a great feeling. I had never asked for anything like this from the government before. The woman who worked with me was very helpful. Basically Karen would be the one going on Medicaid. We were paying on a house and making a car payment. We didn't have any money stashed away, but we had lots of debt and now a $4,500 a month nursing home bill. This made us approvable for Medicaid.
After finally getting out of the nursing home, Karen went off Medicaid since we were no longer entitled to it. About 14 months later she would have to go back into a different nursing home for about the last 10 weeks of her life. I would once again go through the same paperwork application and interviews once again because Medicaid was our only hope of paying for her nursing home bills.
It was such a painful time for my sons and for me. However, millions of Americans have been there and done that or are doing it now.
The numbers are always changing but currently there are 44 million people on Medicare and another 40 million on Medicaid.
Medicaid is for the down and out. People on Medicaid are the disabled or the very financially poor of society. I don't think the majority of Medicaid recipients are pleased with their situations in life. I believe they want to get off Medicaid if they can. In cases of disabling illness they cannot get by without Medicaid and our society should help them. There are situations where people become dependent on the system and will not try to improve their lives to move beyond the system. This latter group represents millions. The drain on the federal budget is in the billions.
Too many doctors are extremely lenient in signing the papers needed to achieve disability status. Too many people have become accustomed to poverty and surviving on very little. If you are financially needy enough, as determined by state guidelines, then you can qualify for Medicaid.
Local offices are overworked and understaffed and so it's difficult in most cases for any recipients to have anyone working to help them get off Medicaid.
I am in favor of Medicare and Medicaid.
We have to repair the system or there will be nothing for our children and their children.
I don't think anyone should be forced to use Medicare. If someone wants to opt out of Medicare at a younger age then I believe that should be his or her prerogative. The reality is that most people at retirement age need Medicare. Health care insurance has become unaffordable for the average person and the premiums are climbing every year. The co-pay insurance plans that people are buying now to supplement their Medicare is becoming unaffordable for many.
One of the biggest problems with Medicare is the medical cost. Recently, a doctor was going to perform a medical procedure on me. He informed me he would have to submit a bill to my insurance company three times the amount he really needed in order to get what he wanted for the procedure. That's crazy and is part of the big problem. Not all but certainly some doctors and hospitals are grossly abusing the system.
I heard about one nursing home owner who went to prison because his nursing home unjustifiably billed Medicare and Medicaid for hundreds of thousands of dollars. He was billing for services that were never rendered.
If we can eliminate the fraud and the abuse by the medical society we would save billions of dollars each year.
Long-term health care insurance must be made competitive across the country. Insurance companies should be able to sell from state to state. Citizens should be able to buy from any state in the country. Competition would be great for the business, the people and the economy.
Second, insurance companies must develop term health care insurance much like term life insurance. Someone buys a 20-year term policy and it covers your health care insurance for a cheaper rate because you've bought it for 20 years. Someone could buy a policy at 50 designed to provide coverage to age 70. If we could get people off Medicare until they are 70 it would save the nation billions. Many seniors are living very productive lives well into their 70s. If a senior could buy a term health care plan that would cover him or her to 70 before switching to Medicare that would be huge in solving part of the system's crisis.
Glenn Mollette is the author of American Issues: Every American Has An Opinion and nine other books. He grew up in Martin County, Kentucky and in 1964 was a child when President Lyndon B. Johnson visited the county seat of Inez to begin his campaign on poverty.
You can hear him each Sunday night on XM Radio on channel 131 8 EST.
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