Are the Elderly Committing Generational Theft?

la posada

At La Posada Retirement Community in Palm Beach Gardens, Fla., people live a pretty good life. With manicured grounds, an elegant swimming pool, a fine dining room, and beautiful lakeside property, La Posada made Forbes' list of "America's Top 10 Ritzy Retirement Communities."

"We have a wonderful life here," said resident Joy Turner.

And how much does it cost to buy in?

"Anywhere between $350,000 to half a million dollars," said another resident, Sam Bath.

Medicare for the Elderly
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And that's only the initial entrance fee! But even though these elderly people are doing quite well, they get a bonus: Thanks to Medicare, the taxpayer covers most of their health care costs.

"Medicare, I think it's the most wonderful thing," said resident Marilyn Herron.

Henry Becker, another La Posada resident, believes that Medicare is "one of the best things this country has ever done."

It's no surprise that these elderly residents like Medicare. Everyone likes getting things for free, and Medicare often makes going to the doctor just about free. With medical costs that cheap, some of these elderly residents go all the time.

John Stossel asks why the young have to pay medical costs of well-off elderly.
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"That's our social life," Herron joked.

But Regina Herzlinger, a professor at Harvard Business School, said Medicare cheats the young.

"What kind of legacy are we leaving for them?" she asked. "We're really stealing from them. It's not right."

"20/20" interviewed three high school students in Dayton, Ohio who said they are eager to help the needy -- in fact, they volunteer at their local food bank. But these teens are angry that Medicare forces them to pay for even wealthy seniors.

"How do they feel, morally, that they're living in these $300,000, $500,000 homes and they're still not paying for their own health care?" asked student Patti Arnold.

"This program is essentially ripping my generation off!" exclaimed student Zach Hardaway.

Medicare Causes 'Fiscal Tidal Wave'

Policy experts like Andrew Biggs of the American Enterprise Institute say these teenagers have a point.

"The government spends around $6 on seniors for every dollar it spends on children, and yet the poverty rate among children is far higher than it is among seniors," he said.

That's true -- the government takes from the young to give to the old, even though the elderly's median net worth is much higher.

It amounts to "helping people who don't need help and taking from those who need it," as student Nathan Constable described it.

So how do residents of La Posada respond to these teenagers essentially calling them greedy geezers?

"It's kids. I mean, they don't think. They don't think the problem through," said resident Walt McCarthy.

Many seniors believe that after having money deducted from every paycheck for years on end, they've paid their dues.

"I paid in for 40 years," said resident Henry Pearl.

"Our lifestyle now is our deserving," added Herron.

It's true they paid into the system for many years, but today the average Medicare beneficiary collects two to three times more than he paid in.

Retired investor and billionaire Pete Peterson argues that it is "not only unfair, it's downright immoral."

For Peterson it's not just about fairness -- it's about affordability. The Peter G. Peterson Foundation, a nonpartisan philanthropic organization advocating fiscal reform, has been vocal in sounding the alarms about Medicare's coming bankruptcy.

"Medicare is already a fiscal tidal wave," he says.

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