Free money includes Medicare, Medicaid, SNAP, Social Security, and more, discussed below.
Some may object to the term “free money” but the definition of Personal Current Transfer Receipts (PCTR) is “Payments to individuals for which no current services are performed, representing a component of personal income.”
I don’t want to get into a debate over “free” based on “current services”. Instead, let’s focus on the sustainability of the current path.
Personal Current Transfer Receipts Billions of Dollars Detail
PCTR as Percent of Personal Income
PCTR as a percent of PI is now 19.29 percent and rising.
Q: What if we adjust for inflation?
A: The numbers in billions change, but the percentages don’t. They are nearly identical.
Real vs Nominal Explanation
Medicare is indexed for inflation in several ways. The income thresholds for income-related monthly adjusted amounts (IRMAA) surcharges for Parts B and D premiums are adjusted annually for inflation. Additionally, certain payment rates for providers and other aspects of Medicare, such as Part D out-of-pocket caps, are also indexed for inflation.
Social Security benefits are indexed for inflation through a process called a Cost-of-Living Adjustment (COLA). This adjustment ensures that benefits keep pace with the rising cost of living.
Medicaid is indexed for inflation to a degree. Specifically, certain aspects of Medicaid, like the federal poverty level (FPL) used to determine eligibility, are updated annually for inflation. Additionally, the Affordable Care Act (ACA) expanded Medicaid eligibility to non-elderly adults with incomes up to 138% FPL, and the federal government provides 90% financing for this expansion.
Since benefits are indexed to inflation, there is no difference in the nominal vs real percentage numbers.
It’s not free money when you contributed for 40 years, it’s called recouping
If medicare is free money , what happens to the medicare deduction from my social security check that I paid into for 50 years ??? The article author is drinking too much “cool aid”.
Great point 2:29
I wouldn;t call social security and medicare free government money after a person works their ass off all their life and pays into it.