Rightfully yours » donut hole

Medicare and the GOP

BobG — Wed, 25 May 2011 03:36:55 +0000

Tuesday, May 24, 2011: Kathy Hochul won the special election in New York’s 26th Congressional District. She defeated Republican State Assemblywoman Jane Corwin with 47 percent of the vote for the seat.

The special election became a referendum on Medicare as the district’s seniors balked at the GOP plan to cut Medicare. The district has been a Republican stronghold for years, but Corwin saw her early lead dissolve when she came out in favor of House Budget Chairman Rep. Paul Ryan’s (R-Wis) Republican budget plan that would cut billions from Medicare.

Hochul cast herself as the protector of Medicare for her district with a large population over 55. She said, “We cannot balance our budget on the backs of our seniors.”

“How about ending big handouts for Big Oil?” she said. “How about making millionaires and billionaires pay their fair share? We can do all that and not decimate Medicare.”

Hochul’s victory is a sign of tough times to come for Republicans. Forty percent of Tea Party supporters are 55 or older. These are the fiscally responsible voters who see the ends of their careers approaching, when their income will be only Social Security, pensions and any money they have saved. These are the voters who want to continue to live and are afraid that Medicare benefit cutbacks will cut off medical support and leave them to die.

Ryan’s Medicare budget proposal changes include: offering senior citizens federal assistance to purchase private health insurance instead of Medicare; allotting money to seniors based on income; and increasing the age of eligibility for Medicare by two months per year until it hits 67 in 2033. These changes would take effect in 2022 (impacting anyone currently 55 years of age or younger.)

Ryan is 41 (born January 29, 1970), many years from the changes he is proposing for others. Would his stance be different if he were 25 years older and Medicare was his best medical insurance option? I’ll bet it would.

What Ryan has missed is that Medicare is a single-payer system like any other health plan where seniors pay a premium each month for coverage supplemented by what they paid into the system their entire working lives and with copays like any other health plan. It is not an Entitlement program. It is not automatic coverage just for signing up.

Eligibility for Medicare includes being 65 years or older and U.S. citizens or have been permanent legal residents for 5 continuous years, and they or their spouse has paid Medicare taxes for at least 10 years.

The allotment proposal would work only if the senior remained in general good health. The average cost for health care expense for seniors (over 65) is more than three times that for younger people. Large cost medical solutions like heart disease, organ replacement, cancer would easily exceed the senior’s allotment to buy health insurance. And vouchers may not keep pace with the increasing costs of health care and insurance.

The U.S. budget contains $732 billion per year for Medicare, Medicaid and Children’s Health Insurance Plan (CHIP). That is 21 percent of the whole budget. $452 billion goes to Medicare (13 percent).

There are 39.5 million over 65 (12.8 percent of population) and 74.4 million over 55 (24.2 percent of population).

Under the plan that was actually dreamed up by insurance companies, seniors will be paying far more out of their pockets than now. Preventive care will go away as well as closing the donut hole on drug costs. Medicaid would be turned over to the states with funding by lump payments and denied to low-incomers. Voucher amounts would be tied to the Consumer Price Index (CPI) rather than the real inflation rate of health care costs and private insurance rates. Over time, the vouchers will cover less and less, but the insurance companies will benefit.

Private health companies will reserve the right to deny coverage to “unprofitable” applicants, leaving those people with valueless vouchers. And when those seniors are abandoned by the medical profession and allowed to die from neglect, overall health insurance costs will become hugely profitable for the insurance companies. We will become a nation of young, healthy people without unhealthy seniors being a drag on the budget.

Personally I don’t want to live in a country that thins its population that way.

The Ryan plan is the privatization of health care given to companies that have proven they cannot control health care costs. And since this is a dream plan for insurance companies who will be able to pick who they insure and charge pretty much what they want, we can be sure they will be supplying major funding to advertising the ‘nightmare to seniors plan’ while glossing over the negative points.

Republicans have made the Ryan plan their Republican Manifesto and forced a test vote to restructure Medicare according to the Republican Manifesto. The test vote failed 40-57. All but five Republicans voted yes; nay votes included Senator Rand Paul (R-Ky) who thought the plan didn’t go far enough. Other dissenters were the independent Republicans who think for themselves; Senators Scott Brown (R-MA), Lisa Murkowski (R-AK), and the Maine Senators Susan Collins and Olympia Snow (R-ME).

In that session, the Senate rejected President Obama’s budget as well, 0-97.

On September 20, 2010, at a town hall discussion sponsored by CNBC, President Obama said healthy skepticism about government and spending was good, but it was not enough to just say “Get control of spending,” and he challenged the Tea Party movement to get specific about how they would cut government debt and new spending.

“And so the challenge I think,” he said, “for the Tea Party movement is to identify specifically what would you do. It’s not enough just to say, get control of spending. I think it’s important for you to say, I’m willing to cut veterans’ benefits, or I’m willing to cut Medicare or Social Security benefits, or I’m willing to see these taxes go up. What you can’t do — which is what I’ve been hearing a lot from the other side — is say we’re going to control government spending, we’re going to propose $4 trillion of additional tax cuts, and that magically somehow things are going to work.”

Republicans have stated through Senate Minority Leader Mitch McConnell that they will not allow the nation’s debt ceiling to be raised if Medicare does not have substantial cuts, even if billions are cut elsewhere. Very shortsighted. Keeping the debt level may cause the nation to default on some of its debts. The same thing happens as with a personal default. Our credit rating plummets, and our children will be paying off the debt at probably twice the interest rate. But by then, McConnell will have retired wealthy and won’t care.

What would happen if the U.S. defaulted on its debt obligations? The dollar would be worthless and banks would close, causing businesses large and small to cease operations and lay everyone off, causing the stock market to crash with massive depression all over the world. Americans would have no jobs and their savings would be worthless.

It probably won’t happen. The U.S. pays out $196 billion per year in interest alone, and like any of us with our backs against the wall, will pay interest only until better times.

It is no secret that our government process is broken. To paraphrase a newly elected Tea Partyer, each legislator is 1 / (435 congressmen + 100 senators + 1 president + 9 supreme court judges) or 1 / 545 of the legislative process.

Almost no matter what, each side comes up with a position on each issue and tries to get it passed. If a Democratic solution comes to a vote in the House, it is defeated by lock-step voting ordered by the central Republican caucus. If a Republican solution comes to a vote in the Senate, it is defeated by lock-step voting dictated by the Democratic caucus. It does not matter to the legislators whether there is a good solution for the American people, it only matters that the other side not get any credit.

A perfect example is Senate Minority Leader Mitch McConnell’s narrow focus as he has said that ensuring Obama is a one-term president is his “top political priority.”

The focus is never on the benefit to the American people except to win their votes with promises that will not be kept in order to gain control of the government. And the newly elected Tea Party candidates are falling right into line.

It would be interesting to abolish all parties and outlaw all caucuses and allow candidates to run on their reputation and govern transparently on a bill’s own merits.

What health reform will change

BobG — Tue, 23 Mar 2010 19:44:05 +0000

On Sunday, March 21, 2010, the U.S. Congress passed the landmark healthcare bill. It was not passed in the customary manner, where the House passes a version and the Senate passes their own version, then the two are merged with compromises before it is voted on again by both houses, then sent to the president for his signature and becomes law.

It is a well-known fact that the Republicans have been receiving their instructions from the health insurance companies, who heavily fund their re-election campaigns and who do not want a health bill at all. Revision means forcing them to insure millions of marginally healthy people as well as those with bad health records (pre-existing conditions).

This time, the House passed the Senate bill without any changes. Healthcare became law when the president signed it on Tuesday, March 23.

To fulfill promises made to House lawmakers, reconciliation to the main healthcare bill was passed first by the Senate, then the House. Republicans offered 40 amendments to the bill, in a final desperate attempt to change the bill enough to force the House to vote again, but Democrats steadily rejected each amendment.

In the end, Republicans voted unanimously against the reconciliation, threatening to take the issue to their election campaigns to win enough seats to repeal healthcare.

Every November, the entire House and one-third of the Senate are re-elected. Many of the Republican amendments were specifically aimed for votes that could be made to sound embarrassing for Democratic lawmakers running for re-election.

The main points of the healthcare legislation include:

New consumer protections for denial of coverage based on pre-existing conditions (effective for adults in 2014, but children in 2010). Adults currently with pre-existing conditions uninsured for a minimum six months can enroll in a temporary high-risk pool with subsidized premiums (effective June 2010).
Lifetime coverage limits—eliminated (effective 2010).
Coverage dropped after a sickness—prohibited.
Waiting period for coverage limited to 90 days.
Child coverage under parents plan—extended to age 26 (effective September 2010).
Individuals under age 30 without insurance can purchase catastrophic coverage on the new health insurance exchanges.
Coverage will be portable for employees that leave a job.
Health insurance exchanges (effective 2014) will be created with minimum standards and competing plans available to pool risks for small businesses and uninsured individuals.
New policies issued after September 2010 will fully cover preventive care visits and screenings. Doctors will get paid for seeing uninsured patients they are now treating for free.
Businesses with fewer than 25 employees will be eligible for tax credits for up to 35 percent of health insurance premiums paid. Pooling risks with other small businesses will stabilize costs.
Employers will disclose the cost of workers health insurance on their W-2 (starting 2011)
Medicare beneficiaries with the Part D drug benefit who fall into the coverage gap (“donut hole”) will receive a $250 rebate in 2010. Starting 2011, they will receive a 50% discount on brand-name drugs, with the gap closing by 2020.
Medicare members will not pay more than three times the average premium paid by a healthy younger person, even though middle-aged Americans use more than five times the amount of health services.
Medicare Advantage plan reimbursements will be cut back from benefits currently offered, which give members more choices than standard Medicare plans and cost about 15 percent more than the average Medicare plan. Some of these cuts would be offset by a new deal with drug companies to sell medications not covered by Medicare at half price.
Medicaid will be expanded, making it available to an estimated 16 million more people with incomes up to one-third above the poverty income line, including adults without dependent children. Community health centers will receive enhanced funding.
Subsidies provided over the next 10 years for low to moderate-income people without employer health benefits will enable about 32 million uninsured to buy plans on health-insurance exchanges.
Medical expense tax deduction threshold will be raised to 10% of adjusted gross income (effective 2013). Seniors (age 65 and older) would be able to claim an itemized deduction at the current standard of 7.5% (through 2016).
Flexible spending health account rules remain the same for three years. A $2,500 cap on contributions (with cost-of-living adjustments) appears likely to go into effect in 2013.
Health savings account penalty for withdrawing funds for nonqualified medical expenses increases to 20% (effective 2011).
All citizens and legal residents will be required to have health insurance. Subsidies will be on an income sliding scale up to 4 times the poverty line.
Fines will be imposed on those who decline health insurance (starting 2014); the higher of $95 or 1% of income, growing to $695 or 2.5% of income (2016).
For individuals with earnings greater than $200,000 and married couples earning more than $250,000 the Medicare payroll tax will rise in the next two years to 2.35%. A new 3.8% Medicare tax will be applied to investment income (including interest, dividends and capital gains) that exceed those thresholds.
For job-based “Cadillac” plans (annual premiums exceeding $10,200 for individuals or $27,500 for families), plan administrators will be taxed 40 percent (effective in the next few years). Limits are higher for certain high-risk jobs and retirees.
Fees will be imposed on insurance and pharmaceutical companies and medical device manufacturers (starting 2014).
Health plans will be required to report the proportion of premium dollars spent on clinical services, quality, and other costs and provide rebates to consumers.
A new federal body will be created that would have power to block insurers from raising rates.
Higher taxes will reduce the federal deficit by nearly $140 billion over 10 years.

It does not include a public option to compete with private insurers.

Read the bill at The Health Care and Education Affordability Reconciliation Act of 2010