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Twenty years ago I would not have written this, but I have grown less naive.
Consider human nature…when thinking about paying for healthcare and generating retirement income
We have tried countless schemes to manage health care costs, and expand coverage. Similarly we provide incentives to get people to save for their retirement. The evidence shows only modest progress, but nothing has really solved the basic problems.
We humans are just short-term thinkers.
Over 20 million Americans still have no health insurance. In October of 2024, there were 72.1 million people enrolled in Medicaid, and 7.2 million people enrolled in CHIP – all subsidized by taxpayers.
So, isn’t it time to accept that we are not planners, that we have difficulty with money and implement a universal health care system – no, not socialized medicine – and greatly enhanced Social Security – and pay for both?
Higher taxes? Absolutely, but that does not mean higher individual spending. What do people spend now on health care? What do taxpayers spend on things like Medicaid and CHIPS and various health related subsidies? All that is replaced, not added to.
How many Americans are adequately saving for their retirement? How many will rely mostly on Social Security? How many seniors receive taxpayer funded assistance of various types at both the state and federal level because they don’t have adequate income?
A 2024 study by AARP found that 20% of Americans over the age of 50 have no retirement savings at all. Information from USA facts states that in 2022, 54% of families had a retirement account, this means that potentially 46% of families did not. Isn’t it clear that incentives to save, even avoid taxes are not enough? Now the initiative seems to be auto enrollment, that is grasping at straws.
Sure, in theory we are adults, we should be able to handle our finances, act prudently, plan for the future, take responsibility for our lives. It’s a nice theory and many people do just that, but many more do not and many can’t because of what life has thrown at them.
Simply saying we don’t want higher taxes, we don’t want more government is a red herring- between Medicare, Medicaid, CHIPS and the VA over 40% of Americans are already covered by a government health plan.
Looking the other way doesn’t mean we don’t eventually pay for the significant gaps in our social structure.
Human nature is our greatest challenge and we are not going to overcome that one person at a time.
Alternative practical ideas are welcome.
Might I suggest that anyone who thinks the US medical “system” is fine read this?
There are several different, functional, systems in use in other countries, some with more government involvement and some with less. The problems with changing the US system are political dysfunction and the money spent on lobbying on the on hand, and people and companies benefiting from the excess costs on the other.
I managed the IT dept for a large local govt. Our agency began matching 401k contributions up to 5%. I mentioned this in a staff meeting, telling people this was like a free lunch. A number of staff said they could not afford it. BS! We had a lot of highly paid techs who could afford it. Many were not that far from retirement.
A classic case of short term thinking.
Today’s headline on the main page of HumbleDollar.
“You could fail to contribute to your 401(k) with the employer match—or you could refuse your year-end bonus. Same thing.”
I will definitely be using that comparison with my coworkers. That gets the point across perfectly!