The most persistent and reliable “bull market” of our time hasn’t been stocks or housing or even gold. It’s been healthcare costs, which balloon year after year at a rate that always manages to exceed inflation – at least as it’s calculated officially.
Obamacare’s new rules and mandates for insurance companies, especially the provision that requires insurers to cover high-risk persons who have pre-existing conditions, will drive up costs even more.
Underpinned by Cooked Books
Medicare costs are also spiraling dangerously out of control. Only 13% of the program’s costs are paid by premiums collected from beneficiaries. You might assume that the rest is funded by Medicare payroll taxes. In fact, they pay for only 37% of the program’s costs. Fully 43% of Medicare’s budget comes from “general revenues,” which don’t even exist per se – that is, until they are borrowed into existence.
Medicare won’t go broke in 10 or 20 years as some are projecting. It’s already broke!
Most Americans don’t know it because they are led to believe that a trust fund exists, which in reality is nothing but an IOU added to all the other trillions of dollars the government owes. Congress is (for now) able to borrow whatever it needs to cover revenue shortfalls and simultaneously disguise the true financial condition of Medicare and other programs through accounting methods that would be illegal if employed by private corporations.
The point here isn’t to make you panic if you’re on Medicare or soon will be. The point is to alert you to the need for some medical self-reliance so that you will be less dependent on Medicare (or insurance companies or the medical establishment in general) and less vulnerable to medical inflation.
We’ll keep you posted on strategies to cope with this gigantic area of costs for many of our readers.