The Confusion over Subsidies

So are the taxes going up in order to change Medicare or not; that is the burning question being asked in town hall meetings all across the United States.

One hand of the government says they are not going to raise taxes to fix Medicare. The other hand says the plan to reform Medicare will cost more because Medicare needs to change. So, which is the real story and what is the real definition of the word subsidy? Is it true that Medicare and Medicaid are the reasons the economy is so out of whack or is it the other way around?

Ostensibly a subsidy is a grant of public money that assists a private operator in serving the public or it is any financial assistance given by one person to another. The fact is that the government subsidizes Medicare and Medicaid, and what the government does not subsidize comes out of the pockets of seniors. Based on what many seniors hear in the nationwide town hall meetings, they feel that too much change will spell problems for them.

Seniors do not want “less” medical care and would be happy to keep what they have right now, and they most certainly do not want to pay more out-of-pocket for what they are currently getting. While it may all boil down to a matter of perception, the fact is that if changes are made to Medicare and Medicaid and Medicare supplements, it is virtually inevitable that costs will increase. It’s the nature of the beast.

Most frightening of all to seniors on limited budgets, even if they do have a comfortable income, is the fact that they feel the government is beginning to offload the increasing costs of Medicare and Medicare supplements to the one part of the population who can least afford it. Some have even been heard to say they feel they are being put out to pasture by the government’s rush to trim senior health care because their lives are shorter at that age.

Without going off the deep end on this subject, it would be best if seniors took the time to really make themselves familiar with the issues before making up their minds. Ask the tough questions, see what the answers are and then make an informed decision. There is no doubt that the cost of revamping Medicare is going to be tremendous and that it can’t be done until the economy is in better shape than it is right now.

There are still a number of unanswered questions relating to the high birth rate in the U.S. and how that impacts the health system, as well as questions about the immigrant population who moved here to take advantage of health care services. How will those costs be factored into a new health system without taking from Peter to care for Paul?

While things need to change in order to provide care for all, the question still remains: How will that be done and where will the money come from to accomplish it? In the meantime, don’t jump to conclusions until the whole picture becomes clear, as there may be more to understand before making up your mind that the government is out to “get” seniors. This may not be the case and like many items we have already heard about, it might only be “suggestions” to see the response.

Richard Cantu is with Medicare supplements resource, To learn more about MedicareMedicare supplements, or Medicare supplement insurance visit

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