Healthcare Beats S.S. as Biggest Government Handout

I knew the swelling cost of healthcare programs – including the Affordable Care Act – had a huge impact on the national budget. But when I took a gander at the latest stats, I almost fell out of my chair. For example …

Last year – and for the first time – spending on federal healthcare programs outpaced spending on Social Security.

In fact, the government spent $936 billion on health programs, including Medicare, Medicaid and subsidies related to the Affordable Care Act, better known as ObamaCare.

That’s a massive 13 percent jump from 2014, according to the Congressional Budget Office (CBO).

In contrast, spending on Social Security totaled $882 billion!

The U.S. government now spends more on healthcare programs than Social Security.
The U.S. government now spends more on healthcare programs than Social Security.

As I have been warning for years, we are now in the early stages of a sovereign debt crisis. And this kind of healthcare spending is just making matters worse.

With 80% of ObamaCare participants getting some form of government handout and with monthly premiums expected to rise by an average of 25% – even more in some areas of the country – the government may be on the hook for even more than expected.

I don’t see how this can possibly continue in its current form. And that’s the plain and simple truth.

So, who’s paying for all this?

You are! Consider …

The U.S. is already saddled with $19.8 trillion in debt. And in the latest fiscal year ending on September 30, it ran a deficit of $587 billion – a jump of 34% from the previous fiscal year.

Causes: A slowdown in the growth of federal revenues, as well as rising government spending. That pushed the U.S. deficit up for the first time since 2011, reversing the trend of falling deficits as the economy recovered in recent years.

And don’t forget: Despite these healthcare costs, the U.S. healthcare system is one of the most inefficient in the world.

Despite these healthcare costs, the U.S. healthcare system is one of the most inefficient in the world.

In fact, we spend twice as much per person on healthcare as other advanced countries. We spend more on healthcare than any country on the planet. Yet we rank 26th in average lifespan at just over 78 years.

Something needs to change and soon. Like our national debts that are now approaching nearly $200 trillion — when all official and unofficial IOUs are accounted for — the current healthcare model is simply not sustainable.

Best wishes,

Larry

 

Larry Edelson, one of the world’s foremost experts on gold and precious metals, is the editor of Real Wealth Report and Supercycle Trader. Larry has called the ups and downs in the gold market time and again. As a result, he is often called upon by the media for his investing views. Larry has been featured on Bloomberg, Reuters and CNBC as well as The New York Times and New York Sun.

Comments 48

Russ November 7, 2016

Larry is right to sound the alarm. Bear in mind where all the money goes. Hospitals have never been more profitable and charity writeoffs are at record lows. We are paying the medical and mental care industry for more service at sharply higher prices. They have us over a barrel. Larry questions the health benefits to society in exchange for such enormous cost. The money actually paid comes from the productive capacity of the economic engine. As a country do we need to pour this much (nearly 20% of GDP) into medical/mental care? Where is the limit or are there no limits? How about 45% of GDP?

Sam November 7, 2016

And when the BIt&$h gets in, it will be worse!

Brian Smith November 7, 2016

Larry, Upwards of 10% of our government spend is for healthcare fraud- this is a national disgrace. If you add the state share of Medicaid, you get well over $1.1 Billion in healthcare spend. Additionally add the VA, Indian Health Services, Correctional medical services, and state public employee retirement systems, municipal governments and the public sector including the Federal Health Benefits program you begin to realize that well over 50% of US Healthcare spend is paid by our tax dollars and if democrats prevail, we are marching to a US based "single payer" system. Oh yes, $800 Billion is wasted and abusive medical services. Add that all up and you get to the heart of the US Healthcare crisis.

Carol November 7, 2016

I'm curious where you get the idea that the Social Security payments we get each month is a government hand out? We worked for that money. It was taken out of our check every payday along with the amount that went to help pay for medicare. That was money I WORKED FOR AND DESERVE RETURNED TO LIVE ON. True the amount that is paid for medicare may or maynot pay for some of the heathcare that is received, however it WAS WORKED FOR AND SHOULD NOT BE CONSIDERED A "GOVERNMENT HAND OUT". You obviously don't live on S.S. and maybe don't have it taken out of your check, but it was taken out of mine. thank you very much.

Roy Lee November 7, 2016

How can anyone say that S S is a hand out when you pay into S S with every paycheck ??? I know that the baby boomers are all retiring now or have already retired. Also you will have a hard time proving that the illiegles are not getting some if not a big chunk of what is being paid out and they are not paying into S S. Now prove it to me Thanks Roy Lee

Peter W November 9, 2016

Well then a quick path to making the UnDocumented to legal status would add possibly millions of people to the legitimate tax rolls...now if you get the "$3 TRILLION" held overseas by our patriotic corporations, individuals, etc. Back into the USA. That would help. If the 6,000 Businesses in America that hire Undocumented people would step up to help...maybe the President-Elect would do the right thing...oh wait sorry I was in my alternative universe...let me come back to our sad reality where facts are stupid & fearmongering reigns!

F151 November 7, 2016

Obamacare is the WORST legislative disaster to hit our country in 100 years. It is absolutely terrible. My family's healthcare costs are up more than 300% in 7 years and the "coverage" now provided for that HUGE cost.....is virtually nothing.

William Cummins November 7, 2016

I agree on your take on Obamacare and the healthcare system but when you call SS a handout, I get very upset! I paid into SS for 30+ years and could have made more money by investing than I will ever receive from SS. It is not a "handout" like many off our government welfare programs and Obamacare only demonstrates how incompetent the government is in running and managing anything'

Peter W November 9, 2016

Really ANYTHING! We will let you manage or maybe we should just abolish government. Now just wait until Trump takes over...you will see UNPRECEDENTED INCOMPETENCE. But you wanted him & now we are stuck with this fascist demagogue. Get ready for some real screw-ups and political repression. You will be saying in 12-24 months....WHERE'S OBAMA?

Alex November 7, 2016

It seems you've left out the handouts for the defense industry, which make healthcare subsidies and social security look like chump change. People can be outraged about "wealth redistribution," but the reality is, even according to Martin Weiss' recent email/newsletter, there has been a massive wealth redistribution going on in the US since the 70's -- and Weiss correctly points out that it's going to the top .1%. In all honesty, I'm glad to pay more taxes for healthcare -- but am sternly against subsidizing the defense industry and all of the profiteers in the Pentagon and our government. I would love to see your write up on military spending handouts.

Ed November 7, 2016

Larry, It is well to criticize and explain the facts that are before you, but solutions I am not hearing. There must be some benefits to the populace that previously to "Obamacare" was not receiving medical support. Can the system as employed not be tailored to give support to those who need even on a reduced margin?

Tim November 13, 2016

I'm not real sure here, but it almost sounds like there may be a hint, from the Elites'(known more prevalently as "Eliteism'")... ya think'..?.!! The tone', even the thought of, any'acceptability of tip toeing around a stinch'filled air, of an Expendable' mentality'.! Oh' Really '! Does some people think like that '.? Nah' •Well 'yes it has & doess mostly by the Rich & Greedy'in ref to;the Poor,'Indigent & Needy..!

Joseph Bigio November 7, 2016

Who you voted for or who you are going to vote for tomorrow, including senators, representatives, and governors, will determine if we stay on this slippery slope of increasing debt or we give our so called surrogates in government the opportunity to reverse the theft of our aggregate wealth by health care for profit corporations. Choose wisely.

James November 7, 2016

Do these stats take into account the Soc security taxes most working people pay? The same question applies to Medicare. Wor king people pay taxes and people on Medicare pay a monthly premium. And nobody ever says anything about the money that the government owes th SS Trust Fund.

Carla November 7, 2016

There has been such an outcry on the rate increases through the affordable health care act, but truly it is symptomatic of an underlying problem and is not the problem itself. I do not purchase healthcare through that system but, because I am a solo self employed individual, purchase my individual plan through Kaiser Permanente. w/ no subsidies. For many years my annual rate increases are regularly 10-25%... until this past year. In 2016, I pay $717.00 per month and in 2017 that increases to $1576.00, more than a 100% increase. Everyone's been so focused on making "Obamacare" wrong, they are missing the bigger picture of the real culprit, the healthcare industry and corporate greed.

Bob November 7, 2016

What do we do Larry?

Georgene DeWald November 9, 2016

Exactly. What is the solution? Where are the experts on this hiding? I feel like a sheep in a sheep pen, pleating and worrying how to get out of this pen(health care) and run free.

Gregory Hardison November 7, 2016

So give me one good reason Americans' health care should NOT be the Government's largest expenditure? Is this not a more justified expense than, say, paying for Trump & Hillary to fly around the country spreading their crap to a sensory-dulled populace? Or paying similar expenses for any of our esteemed "lawmakers"? What about lining the pockets of our favorite Defense contractors, as they fantasize about yet-another-latest-Tank designs--or the next great Aircraft Carrier, perhaps? What about those who on their own simply cannot afford to pay exorbitant health care costs? Is it their patriotic duty to just die, and get out of the way--as many Republicans no doubt believe? It always seemed somewhat predatory, at best, to me, that an individual's health care in this nation was subject to the whims of the marketplace, just as buying a new car or a fur coat would (and should) be. However, if that is indeed the case, then we should at least be honest enough to inform these hapless folks that their lot is to merely die and get it over with, so that the marketplace-blessed "healthy" can get on with their lives in unencumbered fashion.

Bill November 7, 2016

We have finally gotten healthcare to SOME of the many who can benefit from Obamacare (ACA). Now we have to figure out how to pay for it. I have an idea - - how about we start by allowing Medicare to negotiate drug prices? Jeez, thats brilliant! Here's another - - how about we stop paying medicare for people who make over $1,000,000 a year?

books November 7, 2016

Our people need medical care. We must figure out a way.

Mike November 7, 2016

You lost me by referring to Social Security as a handout. My check stubs over the past 51 years say otherwise. Your observation that our for profit health care system is over priced and inefficient is closer to the mark.

Richard November 7, 2016

$200 Trillion in debt?

Wayne B November 7, 2016

While I agree healthcare costs are totally out of control lets place blame where it belongs! Examine the total healthcare supply industry, pharma, hospitals and their equipment suppliers, large doctor groups, insurance organizations, etc and it becomes quickly clear that the greatest share of costs and increases lie with these folks. Medicare is burdened by not being permitted to negotiate with pjharma and other providers as other governments around the world do, the outrageous prices charged by big pharma is criminal, equipment providers are stealing from us all, insurance companies are out of control with coverage (or lack of it) and prices. Take a look at who is building the large medical complexes and towering structures and it becomes clear who is benefitting from all this overcharging. One of the largest problems with the system is the publicly held companies in this field are concerned primarily with shareholders equity (I am one of them) which itself contributes mightily to the pricing structure. This is wrong, the system should be concerned with profits, of course, but the shareholders should simply go along for the ride without being the primary concern of management. If you don't make money as a shareholder, sell your stock and move on. Healthcare should be the primary concern, shareholders the least concern. If something is not done to curtail costs, it will be nothing like what you suggest. It will be limited healthcare or a nationalized healthcare system. Leave SS out of it, it could be a self sustaining system with a little tweaking. It should never be lumped in with a healthcare conversation, per se, as you have done. Shame on you.

Graeff November 7, 2016

Yes indeed, the national debt is out of control - and beyond reality. Bad, bad management for too long a time. It will never be repaid. Never. However, the unreal derivatives piled up by extreme dishonesty,I believe are just as threatening and are not payable.

Philip Williams November 7, 2016

Social security is not a hand out. I paid into the system.

Howard November 7, 2016

Hi Larry The affordable care act was too big to read as a piece of legislation, with the view that it could be adjusted at the edges later on. My understanding is that it was put in place to cover between 18 to 30 million citizens who had no health cover at all. It's a nice idea if it works, but who pays for it? We are now seeing who is going to pay for it. The ACA needs to be rewritten to make it competitive and workable for all. You can't insure those at the bottom by making it unaffordable for those in the middle classes.

Terry November 7, 2016

Why don't you suck some money out of your bloated Pentagon budget and spend it on the people who contribute to the tax base. It is that simple. Your Offense budget is out of control, as is the Pentagon. Fix it.

Slammin Sam November 7, 2016

It's almost over. Whoever wins will have their hands full. Either way - our country is in big trouble. It's only a matter of time before the crap hits the fan. Every person I've asked - would you want to be Prez of the U.S. - said "no" - what else can I say. Good luck. The best thing we can do is pray for our Country.....we're gonna need it. Praise The Lord!

johnfromojai November 7, 2016

Social Security is NOT a handout! Shame on you for labeling it that way. It's self funding. We pay more for medical care because we give one out of every three dollars to insurance companies. Thanks to corrupt politicians we don't have single payer/universal care like EVERY other advanced country. The main reason for our debt is MILITARY, not health care. We pay 55% of our discretionary tax dollar to the military. If you include ALL of the military costs, like debt servicing, VA and sending $10 million a day to Israel, you will see where the deficit came from. The Iraq/Afghanistan fiasco will cost $5-6 trillion, approximately $50,000 per family. Most of that wasn't even part of the budget.

Mike November 7, 2016

I will bring up three reason why the US has so much debt and why it does not have enough money for social programs. You forgot to bring up many important facts as to why the US is in debt and about Obama Care. Pre Obama Care the US still spent more on their Medical system, more than another other country in the world. The US spends at least $4,000 more than the per-capita in expenditures compared to other countries in the world including Australia, Canada, France, Germany, Japan and the United Kingdom. Almost 18 percent of our GDP is consumed by health care expenses, compared to 9.1 percent in Australia, 10.9 percent in Canada, 11.7 percent in France, 11.3 percent in Germany, 10.1 percent in Japan and 9.4 percent in the U.K.. Forbs Magazine which is not exactly a far left magazine stated that US healthcare ranked dead last compared to10 other countries like the UK and Sweden even though it is the most expensive. Another fact that is not brought in another Forbs article is fraud in the medical system which cost the medical system a lot. Costs would be a lot lower for medical costs, but republicans fought tooth and nail not to make Obama Care a single payer. They also did not get rid of drug companies who charge ridiculous price for their drugs, and insurance companies who lobby republicans and gouge the medical system. Sixty percent of all bankruptcies in the US are because people cannot pay their medical bills. Per How much of the US is spend on military per year? Second point: The size of the US military has doubled since 2001. The US has the largest military in the world. Military Spending: Government accountability office says that in the last 20 years $8.5 trillion dollars has been misspent from the department of defense. Conservatives state that the US cannot afford Medicare, livable payouts for pensions, free college and other social programs. The US also spent $1.5 trillion on the F35 jet that’s does not work. Not to mention the total cost of the wars in Iraq, Afghanistan etc which have cost close to $4.4 trillion. According to the Office of Management and Budget (OMB) and National Priorities Project, 53.71 percent, or $598 billion, of the discretionary spending in 2015 was on the military, more than the combined spending on education, medical care and health, housing and community, energy and environment, transportation, science, food and agriculture, veterans' benefits and government. Republican and 4 star general President Dwight D Eisenhower’s warns the American public about a bloated military complex in his exit speech in 1961. He also taxed the super rich at 90% to help balance the budget. Third and final point: Is that the super rich and corporation pay little or no tax in the US, and Warren Buffet has stated this many times. You need income from taxes to pay for social programs. The US has the lowest corporate tax rate in the industrialized world and low tax rates for the very rich.

Peter W November 9, 2016

THANK YOU MIKE!!! Why aren't there more citizens like you? America is still the greatest experiment in a Capitalist Democracy as a form of governing ourselves...but also we are a republic of 50 states, each with 4 Levels of government...we need REFORM FROM THE BOTTOM UP!

Dan S November 7, 2016

Larry, I didn't even bother to read your article. The title "Healthcare Beats S.S. as Biggest Government Handout" royally peeved me off! Where the heck do you get off calling Social Security a f--king handout. People payed into a system as other countries do with the exception our government pulls the money out and replaces it with worthless I.O.U.'s. This system was meant as a retirement with the exception our government can't control it's greedy wasteful spending habits. If it would have been treated as a national retirement plan it would have easily functioned. I also believe "correct me if I'm wrong" a lot of government employees were not paying into the system until recently. If they were not in fact paying into Social Security, it must be a tax and they should be charged with tax evasion. Why don't you look up who holds our governments debt, I think you will find the Social Security Administration is holding more worthless U.S. Bonds than any foreign country. As soon as the Central Banks quit protecting the retirements in the stock market everybody will lose!!!!!!!!!

Dan S November 7, 2016

Larry, I did go back and read your article "after I had time to cool down" and you are absolutely right. This is a system on the verge of failure and very soon most probably. Could this be what our government wants to happen? It may be whats required to help fix and correct a corrupt system. Trumps plan is right: 1. Stop illegal immigration, nobody enters the country unless they are financially capable of taking care of themselves. 2. Get the insurance companies out of the health care system. They are an expensive middle man and only create huge pools of money for greedy lawyers and hospitals to rob. 3. If you are going to have insurance companies in health care, then a single payer plan should be required for everyone, no exceptions. (The insurance companies and their group plans pay less is just plain corrupt and wrong.) Insurance companies were at one time one of the largest profit making companies in the United States and may still be. They need to be treated as employees who lost the jobs to offshoring "you're no longer needed go train for another job". The whole medical system and U.S. Governments need a reset.

Frank November 7, 2016

The CAPITALIST U.S. healthcare system is the GREEDIEST in the world, along with the PREDATORY U.S. medical insurance industry. Profits before people. The Government needs to stop enabling the greed. That's what needs to change.

Frank November 7, 2016

Add the PREDATORY drug companies, too. There's your problem.

Frank November 8, 2016

Do you even bother to read this stuff? Maybe you're to busy falling out of your chair. Don't even try to blame the U.S. national debt on healthcare. 1. Bank bailouts: " The Special Inspector General for TARP summary of the bailout says that the total commitment of government is $16.8 trillion dollars with the $4.6 trillion already paid out. Yes, it was trillions not billions and the banks are now larger and still too big to fail." Citation: http://www.forbes.com/sites/mikecollins/2015/07/14/the-big-bank-bailout/#3825b5383723. 2. Defense spending just one year (2015): $599B Military (54% of $1.11T) vs $66B (% of $1.11T) Medicare and Health Citation: https://www.nationalpriorities.org/campaigns/military-spending-united-states/

gordon November 8, 2016

Well yesterday the Dow did a handstand not because of better financials but only on the hope that the presidential path for Hillary is open. Did these companies that jumped in price create more prosperity, jobs build new plants? hardly. It was a clearing of the path to the White House for Hillary plain and simple. I see the Asian markets are now hesitantly piggy backing onto the the climb in the market in America and I guess that markets in Europe will play follow the leader as well. They are not growth markets but daisy chain markets with the American markets being the Little Engine That Thought It Could.

gordon November 8, 2016

Something needs to change and soon. Like our national debts that are now approaching nearly $200 trillion — when all official and unofficial IOUs are accounted for — the current healthcare model is simply not sustainable. Best wishes, Larry PS Larry the stock market is unsustainable as well.

William November 8, 2016

Listen Larry, I like a lot of what you have to say but you make me angry calling Social Security a handout. I have worked hard my entire life and paid in plenty and am sure that I will not get what I deserve due to overspending by pathetic sellout politicians. I have no doubt that S.S.D. is being abused severely, but I watch my money go out to S.S. every paycheck so I do not consider it a handout. I am well aware of what Clinton wants to do to my future S.S. benefits. The Food and Drug Administration is bought and paid for by Monsanto, which feeds us poison that gives us cancer, heart disease, and many other fatal illnesses, directly attributing to the enormous cost of health care, and don't get me started on the Obamination of the Unaffordable Health Care Act! I am sick and tired of being lied to by the government that promotes itself as the guardians of freedom!

Victor November 8, 2016

Just to set things straight. The government "spending" on Social Security is returning money derived by a mandatory tax, 14% since 1982, paid back at a paltry return rate because it was used for the General Fund and replaced by I.O.U.s in the Social Security (DIS)Trust fund. The only relation it has to Obamacare is the $250 Billion that was taken from the Medicare fund that had accumulated due to a 2% contribution from the FICA tax. Just like all Ponzi scheme operators, the government lived high on the hog while using peoples money for other than intended purposes. Now SS is classed with "entitlements" that must be cut. Benefits, not the tax.

Joyce Wojtas November 8, 2016

I really find it offensive that you refer to Social Security as a "government handout". I am 74 years old and have been working since I was 14 years old and have been paying into the S.S. And Medicare systems all these years. What I receive in benefits should be considered a return on my investment and I bet if I had invested that money privately, rather than give it to government, I would probably be getting a much higher benefit. AND, I AM STILL WORKING. @&$x€¥{#.

Travis November 8, 2016

With almost 2 Trillion a year on S.Sec. & Medicare and Medicaid isn't "gold" the only game in town? If Hillary gets in, also, maybe the Market of inflationary stocks already blown out of the universe may be the place to be still? Please compare in your daily advisory. Thanks, Travis

Terry November 8, 2016

Take out the middleman insurance companies and you will have made great progress towards achieving a more sustainable health care system.

Mike Hunsaker November 8, 2016

The biggest factor in the Obamacare disaster is Hepatitis C. Most of the recipients as expected are the most sickly. Hepatitis C is an epidemic from the drug culture. About 2% of AIDS patients have Hepatitis C. But now it is curable through a variety of drug treatments - at huge expense and corporate profiteering. A drug regimen now costs almost $100,000 largely at taxpayer expense. When taxpayer money is involved and deficit spending as in Obamacare, the combination is lethal. Combined with that is the lack of preventative measures such as drug rehabilitation and the inherent inability of most addicts to control their addiction with no incentive to do so with "free" cures. With the government and big business acting together to profit, the shrinking taxpayer base is the immediate loser until the bills come due. As to the inefficiency, I once had stuck my finger on a nail while working on my house. My doctor was on vacation; so, I went to the emergency room. They took and X-ray and gave me some antibiotics, no stitches. If I had been able to see my doctor, the bill would have been Less than $300. As it was, Medicare was charged almost $2,900. Of course, I paid ?nothing". Yet my drug formulary is steadily shrinking and the co-pays are going up. Each prescription is limited to a one-month supply increasing the effect of the co-pay per prescription. I think the negative effects you are stating as bad as they are in general still greatly understates the extent of the financial disaster and inefficiency.

Como651 November 8, 2016

No one who does not eat healthy and does not workout at least 5 times a weak and maintains low body fat and healthy lifestyle has a right to complain about healthcare costs unless you have some predisposed genetic condition you have no control over. Watch an old episode of Leave it to Beaver and you will see people were fit and ate natural food in those days. Now walk into a Walmart and look at all the junk food and people buying it. It's no wonder healthcare costs are off the charts. No one wants to admit they are the biggest contributor to high costs. Get healthy people and the problem is solved. Average male body weight in the 1950s was under 160 lbs. now it's like 200lbs and it's not all muscle. It wasn't uncommon for a woman to weigh 115 lbs then and have a 26" waist. That's a super model nowadays. No body wants to face the truth that Americans are unhealthy and when someone does speak the truth they get attacked for it and fed a million excuses why someone can't control their health.

Jim Brouwer November 8, 2016

Wow!! You really know how to fire up folks. SS is not a handout!!!! I put my money into SS so that it would be a part of my retirement. I worked for that money. It is my money!!! I did not steal the money out of the SS system. Congress did. Thieves!!! You need to look up the definition of handout.

nevin carr November 9, 2016

Amen to Mr. Brouwer, above. That is OUR money: I will gladly do without SS if you refund what I have put in (and the employers portion, too, since that was part of my remuneration). As for Medicare, I seem to see something on my W2 about that, too. I made my first "contribution" to SS at Dodge Main in 1948 and I am still paying IN. Yeah: that's a lot of years. And I have read Dr Weiss since early 70s, although on-and-off.

Frances November 9, 2016

You can blame Obamacare if you want, but when that program ends, and premiums continue to go sky high for individual insurance, and more small businesses have to drop employee coverage due to high costs of providing it, and 10,000 people a day turn 65 and apply for Medicare- with 2,500 of those (daily) having pent up demand for medicine and procedures since they have had no insurance and no care.....well then, who ya gonna blame then?? Good luck, Mr. Trump. Your plan to make the entire USA one big risk pool sounds great and easy. It will be much harder to get insurance companies and PPO organizations to jump on that wagon. As so many others have pointed out, Social Security and Medicare Are not exactly "hand outs". But they do depend on full employment for current revenue. Here's a problem for you- my 100 year old Mom recently had an accident resulting in an $1800 ambulance ride to the ER, where among other things she had two CT scans billed at $5400 EACH! The total for checking her out and cleaning up her scratches was over $20,000. She was back at Assisted Living that night. No hospital. Something wrong here????? Of course, Medicare doesn't pay anything like that, but if you were 60 and without insurance???? Crazy.