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When it comes to Social Security we hear:
Congress stole the trust fund and never paid it back
I paid taxes and thus paid for my own benefits
If we didn’t pay benefits to people not eligible, there would not be a problem.
Social Security is a scam, a Ponzi scheme.
Why doesn’t the trust earn interest?
Health insurance misinformation is even worse:
I feel like health insurance should be free, like it is in other places.
CEO pay and insurance company profits are driving premium increases.
Insurance companies deny my care just to make money.
Why should I pay for insurance when I’m healthy?
Nobody should question the care my doctor orders.
If my deductible is lower, why are premiums higher?
Why do I have to pay anything for my care when I have insurance?
I just wrote a blog post on the need for a universal risk pool, you might want to take a look. I’m guessing some of our over the pond friends can relate to all this.
Is it possible to educate people so they at least act prudently in their own interest and collectively support policies in everyones best financial interest. There are not many issues that affect nearly everyone as do SS and paying for healthcare.
Regarding retirement income and healthcare, it is interesting to view the US from an Australian viewpoint.
We have Medicare, a publicly-funded (i.e taxpayer funded) universal health insurance scheme. This has been running since the 1970s. Other than medical procedures that are deemed “elective”, any Australian can get medical care at no or low cost. Many Australians also choose to take private health insurance. This can assist with things like reduced wait times for non-critical care, choice of hospital and/or doctor etc. We also have the NDIS (National Disability Insurance Scheme) to support people with a disability.
I think in many ways we don’t appreciate how lucky we are to have Medicare and NDIS in place.
With regards retirement income, I’ve written before about our compulsory retirement savings scheme. This means that all working people are just saving for retirement (at 12% of their income) without thinking about it. If retirement savings fall short, there is a government funded aged pension “safety net”. Over time, there will be less reliance on the aged pension due to the compulsory saving scheme.
The outcome is that healthcare costs and retirement savings are not at the front of mind for most people.
I think the big thing to understand is that Australians are a very compliant lot. I can certainly see that the schemes described above are a good match for Australia, but would not necessarily translate smoothly to other nations.
You mention choice of hospital/doctor. Does that mean there is no choice in the public plan!
I thought the employer contributed 12% of pay to the retirement fund. Is that actually a deduction from the workers pay?
Thanks Dick.
With regards Medicare, the details are too complex for me to understand them all, but generally with the public system (Medicare), there will be far less choice than with private health insurance. With Medicare there may be choice in certain circumstances, but certainly not always.
With regards the 12% payment to superannuation (compulsory retirement savings), there doesn’t tend to be discussion about whether it is considered a deduction. A job might be advertised as “$100,000 + super”. So the employee gets $100,000 less income tax, and the employer pays $12,000 into the employees super. So the costs of employing people are effectively 12% more than what they are paid. This might sound like a big burden, but this percentage has been gradually ramped up over time and businesses have adjusted to this total cost of employment.