medicare

If you thought penis pumps were novelty items found only on the shelf of sex shops, think again. Under Medicare, the federal government’s health insurance program for seniors, penis pumps are covered for beneficiaries whose erectile dysfunction can’t be treated by conventional drugs like Viagra. Yes, Medicare won’t cover dentures or hearing aids, but it will pay for penis pumps. According to a report by the inspector general for the Department of Health and Human Services, between 2006 and 2011, Medicare spent over $172 million on penis pumps for the elderly. Officially referred to on the books as “vacuum erection systems,” the government paid $360 apiece for the scurrilous devices, twice the competitive retail market price.

The story sheds light on the unmitigated largesse of the federal Medicare system. Over the last few decades, Medicare’s original intentions have been grossly distorted to justify its reckless expansion. When President Lyndon B. Johnson signed Medicare into law in 1965, he based the program’s passage on the benign principle that in the United States, no one should go broke because of illness or old age. At the law’s signing ceremony, he summarized, “No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime … No longer will young families see their own incomes … eaten away simply because they are carrying out their deep moral obligations to their parents … And no longer will this nation refuse the hand of justice to those who have given a lifetime of service … to the progress of this progressive country.”

Medicare was meant to be a sensible health insurance scheme for the elderly, a security against financial ruin by illness or old age. But now, it has swollen into an entitlement trap that is unfairly robbing our generation. Its finances have simply become unsustainable. Programs like Medicare are only self-sustaining if cash outflows can be matched by monetary inflows. As more and more beneficiaries are added and as less and less people are able to pay into the system, demand outstrips supply; the liabilities exceed the assets. Medicare will soon become an inverted pyramid scheme. In 1965, when the program was first created, there were six working people for every retired senior. Today, there are only four working people for every retired senior, and the ratio will soon be even lower. Every day, 10,000 seniors are added into Medicare’s payroll. The looming retirement of millions of Baby Boomers will only put further stress on Medicare’s creaking finances.

The confusing fact about Medicare is that different parts of Medicare are going broke at different times, which is part of the reason why the debate over the program has been so complex and polarized. Medicare is made up of four separate parts. Medicare Part A covers hospital insurance; Part B covers medical insurance for physician’s fees, medical devices and the like; Part C includes Medicare Advantage, which includes private insurance plans, and Part D covers prescription drug plans. Of these, Part A is most at risk of bankruptcy. By 2026, the trust fund for hospital care will go broke, and not long after, the other three will follow as Medicare funds become depleted. The devils are in the details, but the unmistakable take away is that, if current projections continue, Medicare will not be there for those Americans currently in their 20s and 30s.

There are over $34 trillion of unfunded Medicare liabilities. That is the equivalent of 40 Iraq wars! For the government to meet this guarantee, it will need to either tax the next generation into oblivion or face the sort of austerity seen in Greece, with steep and sudden slash in government spending that will instantaneously spike unemployment and trigger a major recession. Political hard-liners who protect Medicare’s status quo argue that current seniors have paid into the Medicare system all their lives and that what they are collecting now is simply their due, but the truth is that the average Medicare beneficiary now collects $3 to $4 dollars for every one dollar he or she has paid into it.

The difference has been made up by borrowing money from foreign countries and Generations Y and Z who will need to pay dramatically higher taxes. Not only is our current system of health care entitlements unaffordable, but they hurt the very individuals who are taking the first steps into adult life. It is generational wealth redistribution, taking away from the young and unborn to gratify the old and aging. The writing on the wall is clear: to save Medicare for all, we must reform it. There are no pain-free remedies. Benefits will need to be dialed down, and the retirement age will need to be raised, but the faster we implement change, the more gradual and less painful the reforms will be.

Vice President Hubert Humphrey once said, “the moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life; the sick, the needy and the handicapped.” I, like most people, believe that we have a duty to our seniors as well as our children. I believe that the end of our life is just as important and deserving of dignity and happiness as the beginning of life.

To live up to that promise, America must embrace the sober reality that if left unchecked, Medicare will not only bankrupt itself, but a whole generation of Americans. Congress and the President must act now. If there is a time when political courage needed to trump political careerism, it is now and it is with Medicare.

– By Doo Lee