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Posts Tagged ‘Medicare

Mea Culpa

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Dear Readers,

For the last couple of weeks, I’ve not posted anything to my blog. Not even about those little known stories the mainstream media tends to ignore…and I love. It’s not that those stories don’t exist. Heck, plenty of them exist everywhere; just look at any issue of Wired Magazine’s Wired Science blog. I’ve just been occupied elsewhere.

I admit to having “liked” Bruce Bartlett’s facebook page which supplies me with endless conversations (and articles) on economics and politics as well as the absurd. Of course, I still read the news every morning in the Washington Post (especially Wonkblog) as well as The Atlantic, The New Republic, The American Conservative, Bloomberg, and a few others like the Financial Times and the Economist.

But over the course of the last year I’ve become more involved in volunteering my expertise to community non-profit groups. My little, rural town in the Sierra Nevada foothills can’t afford paid services for the help it needs. We’re still suffering from the severe recession.

Wages are below median average for California, and industry, as we generally think of it, is practically unknown here. For years, Colfax, where I live, was ruled by a “no expansion” crowd that hamstrung local businesses and the community at large. Finally, that hold is breaking as a result of the Great Recession. Businesses, hard hit by lack of customer revenues, are finally speaking up and demanding revenue growth in order to stay in business and to fill the empty storefronts. Residents are seeing the need to build sustainable businesses that can help support necessary, and even desired, community services.

I’ve spent most of my adult years in large towns where governmental actions made a huge difference in both the local economy and in people’s lives. When governments partner with the business community, local service non-profits, and residents great accomplishments occur that better the lives of everyone in the community. The current Tea Party inspired, Ayn Rand anti-government fad fails to acknowledge the many benefits government provides communities via increased demand revenues and stabilizing taxes.

For me, when my local community chose to develop an Art Walk which promoted both local artists and main street businesses, expand the reach and profitability of our annual July 3rd Independence Day Celebration (yeah, I know it’s a day ahead of the real thing), and develop a community-wide business plan to promote our city, I volunteered. Unlike the Ayn Randers out there, there’s more to a good life than just me…and the financial perks I personally am getting. I saw these non-profit activities as a chance to rebuild and renew our business community.

Certainly, Social Security and Medicare made it economically possible for me to spend my time on efforts to help my community develop and become more profitable. Without those earned insurance benefits, as they currently exist, I’d be bankrupt…and be left wondering what to do to survive. It’s not that I didn’t save in retirement accounts throughout my 40-some working years. I had. I invested the maximum amount the federal government allows each working year. Regardless, between 2001 and 2009, following the great crash, I lost nearly 2/3s of my retirement savings. Over that decade, I continually bought more shares via my retirement accounts, but the values (profits) decreased. The end result became my need for these two primary insurance benefits into which I paid for over 40 years.

Nevertheless, those insurance benefits now afford me the ability to spend many hours each week voluntarily working for my cash-strapped community, rather than solely worrying about how I’m going to pay the bills or how to survive another month. I’m not forced to go begging for state or federal assistance. Or made to feel like I’m the lowest of the low for needing help. I still have my dignity and the knowledge that I’m taking financial care of myself.

But I’m no hero, by any means. Those earned insurance programs now have just provided me the means to the end of helping my community at large.

Strikingly, my community volunteering increased my skills far beyond what I learned during my career…and I really enjoy all I’m learning in the process of doing. Sure as heck beats vegetating and waiting to die!

But I guess, for me anyway, I feel valuable again. I feel like I really can make a contribution to my community and my fellow citizens…and that makes me feel important and good about myself.

I understand my senior’s path isn’t the same for everyone. But it’s working for me and adding to the renewal efforts of my community while not increasing costs. Most of all, though, I’m getting far more personal satisfaction out my volunteer activities than I’m putting in terms of time and my increased skills.


Clip From ‘Brave, Honest Conservatives’ and Social Insurance

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Mark Thoma: Social Insurance: “Socialism is a low mean, low variance economic system…. Worker income, though low, is not subject to substantial variation over time. Other economic risks, such as access to housing and risks related to healthcare are also very low…. Under capitalism the average level of income is much higher, but economic risk is higher as well…. A worker who has shown up to work every day and worked hard to support a family can be suddenly unemployed for reasons unrelated to anything connected to his or her own behavior…. In an agrarian economy, economic security is provided by extended family relationships coupled with the largely self-sufficient nature of farms…. For a worker dependent solely upon wage income, the consequences of a recession are much more severe…. 1920 marks a benchmark year where, for the first time, more than half of the population lived in cities. When the Great Depression hit around a decade later, the social changes the U.S. was experiencing and the need for new ideas regarding the government’s responsibility for the economic security of its citizens became clear. The Great Depression made it evident that in a capitalist system, where the whimsies of the marketplace can wreak havoc on people’s lives, the government has an obligation to provide economic security. It was also evident that the private sector did not provide the needed level of insurance and that government intervention was required to overcome this problem (due to both moral hazard and asymmetric information problems in the private insurance market).”

The entire post by Thoma (an economist) is well worth the time spent reading it.

Written by Valerie Curl

January 26, 2013 at 4:11 PM

About That $716 Billion From Medicare….

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2012 Romney-Ryan Republican Candidates

Everyone, not just today’s seniors, need to understand that Obama, through the Affordable Care Act, did not rob Medicare of $716 billion.

First of all, most of that money came from ending a very lucrative subsidy to Medicare Advantage insurance companies.

Here is what happened.

When Medicare Advantage was set up, insurance companies were lured into the program with a guaranteed no-loss, tax-free subsidy. What that meant was that if an insurance provider lost money, the government would pick up the loss and that tax-payer money was given to them tax-free to cover that loss. In other words, these insurance companies could reduce their tax bill by writing off the loss and receive a tax-free handout to cover that loss. A no-loss situation for health insurance companies…and it made them lots and lots of money. It was a pretty good deal: Medicare Advantage insurance companies got to write off any loss and have the government pay for the loss tax-free too.

Think of it this way. Say you make an investment, but it loses money. Naturally, you write off the loss on your taxes which reduces your Adjusted Gross Income and, thus, your tax bill. But then on top of having your tax bill reduced, the government turns around and hands you free of charge whatever amount your investment lost.

Well, that’s exactly the deal Congress made with health insurance companies. It was an absolutely great deal for health care insurance companies but not so much for taxpayers.

I don’t know about anyone else, but I find that deal a waste of taxpayer funds that should have ended. Obama and the Democrats were absolutely correct in ending it. Anyone who supports putting that free subsidy back in place is no fiscal conservative.

Yet, that’s what Romney is now saying should occur. Wrong, wrong, wrong.

Every taxpayer should be incensed by that guaranteed give-away of taxpayer dollars. If taxpayers were incensed by the possibility of helping underwater homeowners – as the original Tea Party was – they should be even more incensed over the deal the Republican held Congress made with insurance companies on Medicare Advantage.

No longer paying for waste, fraud and abuse

The rest of the money comes from tightening up on Medicare fraud enforcement as well as changing how hospitals are paid.

Prior to ACA, hospitals were paid for every readmission, regardless of how poorly those hospitals did their job. ACA now requires hospitals to do a better job of caring for their patients by stopping payments for re-admissions that should not have occurred. Since the Hospital Association agreed with this action, why do so many Republicans now want to continue to pay for poor care and waste? That’s not fiscally conservative, in my view.

At the same time, ACA strengthened the benefit side of Medicare by closing the costly doughnut hole and providing for annual check-ups. Essentially seniors, and all Americans, got a better deal for $716 billion less. That’s fiscally conservative!

So what are Romney and Ryan really saying?

That they want to return to the waste, fraud and abuse in the Medicare system prior to ACA?

Of course not. They don’t believe what they’re currently saying. It’s all campaign spin and garbage. They’d take that same money out of the system but use it differently…to help lower tax rates for the most wealthy. Furthermore, by overturning ACA, they would return the wasteful subsidies to insurance companies as well as end the provision that makes hospitals more accountable for outcomes. Ryan’s plan, which Romney said he would sign into law, makes that absolutely clear.

The next time you hear a Republican, or Romney and Ryan, expound on that $716 Billion, remember you’re being conned.

Written by Valerie Curl

August 23, 2012 at 9:17 AM

Seniors Prefer Ryan’s Medicare Plan?

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The new Washington Post-ABC News Poll show 50% of seniors view Paul Ryan’s Medicare plan favorably.

I’m not sure if they really understand what he proposes or if they just don’t care about making sure their kids and grandkids have the same benefits they have. Are they ignorant of what he really proposes, and which both Romney and House Republicans approved, or are they just selfish? I don’t know.

Paul Ryan's Path to Prosperity What I do know is that Ryan’s plan has been analyzed by dozens of non-partisan groups. All of them say the same thing. Under Ryan’s plan, people now 55 and under will be given a voucher – a premium support payment – based on nominal GDP growth plus .5% pegged to regular inflation. As we all know, health care inflation has been nearly 4 times higher than regular inflation. What that means is that health care delivery costs will rise faster than the value of the voucher. That’s where that $6,0000 number that’s been thrown around comes from. This number may not seem like much, but it gets worse when you look more closely at it. The Center for Economic and Policy Research/ (CEPR) summarized a CBO analysis, saying

In 2022, the projected cost of purchasing a Medicare equivalent plan is equal to 35 percent of the median 65-year-old’s income. By 2050 the cost is projected to rise to 68 percent of the median 65-year-old’s income…[The projected payment to buy a Medicare equivalent policy] would be equal to 200 percent of the income of the median 85-year-old.

What Ryan does is sift the costs for seniors’ health care expenses from the government to seniors. Yes, it will reduce the budget deficit because health care spending is huge, but his Medicare plan does not save any money in the health care delivery system, i.e. health care providers and suppliers. It does nothing to bend the cost curve, apart from expecting seniors to become more rational buyers of health care.

In other words, he’s telling future seniors to shop around more, or to tell doctors they won’t get that test the doctor wants done, or to question their doctor’s judgement. Good luck with that!

But that is not all. Ryan also sets up Medicare exchanges – exactly the same type of exchanges that the GOP rails against as part of the Affordable Care Act – from which seniors can review and pick their private insurance. Overall, that’s fine. Having been a shopper of private health insurance, I approve of exchanges where people can review different plans (apples to apples comparisons) and choose one that best suits their needs; but as we know, seniors oftentimes don’t choose the best plan for themselves, and evidence suggests from recent studies that some seniors are often misled on costs and benefits so that they ending up paying far more than they would under traditional Medicare.

As we all know, too, a private insurance market currently exists under the Medicare umbrella. It’s called Medicare Advantage. However, what too many don’t know is that Medicare Advantage costs the Medicare program 14% more than traditional Medicare for a variety of reasons. One of the biggest reasons for this differential is because of traditional Medicare’ size: the program’s size enables it to use its massive buying power to lower costs far more than a variety of private insurance companies can. In addition, Medicare’s administration costs are much lower, around 3% compared to 20% to 30% for Medicare Advantage.

So, here’s the point: health care, especially for seniors, costs all of us far too much. We all agree on that point. Currently, the U.S. spends 17% of GDP on health care while other developed countries spend between 3% to 11%. So, I’m not saying Medicare should not be reformed, but I believe any reforms must be targeted at reducing the overall costs inherent in the delivery system rather than just shifting ever increasing costs to seniors.

If current seniors believe this is a good deal for their kids and grandkids, then I have to wonder what they’re thinking. As a senior myself, if his plan were put in place next year, I’d be flat broke in a decade or so, rather than lasting 20 some years. Every dime I saved for 30 years for my retirement would be gone, forcing me to move in with my kids. Is that the scenario 50% of seniors today want for their kids?

The Effects of Ryan’s Medicare and Medicaid Plan

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Wendell Potter, senior analyst for the Center for Public Integrity and former head of public relations at CIGNA, joined Eliot Spitzer to analyze Paul Ryan’s plan to restructure Medicare and to put states in charge of Medicaid.

GOP VP nominee Paul Ryan

“You almost would be taking us back to the days before we had Medicare to start with,” Potter says of Ryan’s plan to replace Medicare benefits with vouchers that are pegged to the rate of inflation. “Over the past 10 years, health insurance premiums for people in the private insurance market have increased 113 percent — this is by the Kaiser Family Foundation, which tracks this. And that’s far and away more than inflation.”

Watch the interview to hear what this former health insurance company executive has to say about Ryan’s (and now Romney’s) health care plan.

Where Does Romney Stand On Medicare?

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Mitt Romney Let’s talk about Mitt Romney’s Medicare Policy which, to be honest, is a mid-way policy plan between Medicare and the Ryan privatization plan.

What is the best, most cost effective policy available?

Unlike this other top tier GOP candidates, Romney has not fully embraced Wisconsin GOP Representative Paul Ryan’s plan to privatize Medicare. That’s the good news.

The bad news is that he advocates allowing people to choose private insurance over Medicare. Well, guess what Mr. Romney, people can already sign up for private insurance over Medicare. It’s called Medicare Advantage.

According to Medicare and the Kaiser Family Foundation, Medicare Advantage, which is a private insurance market in opposition to traditional Medicare, increases the cost of health care well beyond the costs of traditional Medicare. In other words, Medicare Advantage, which is a private insurance policy, is more expensive to the federal government than traditional Medicare. You can guess why.

For decades, the GOP has been trying, through one policy or another, to eliminate Medicare. Yet, in each case, the alternatives have been far more expensive to the government and to individuals than traditional Medicare.

According to HealthAffairs Blog:

Contrary to claims made by John Goodman and Thomas Saving in an earlier Health Affairs Blog post, non-partisan data from the Congressional Budget Office (CBO) and the Center for Medicare and Medicaid Services (CMS) demonstrate definitively that private insurance is increasingly less efficient than Medicare. The data show that Congress should examine and address the role that private insurance is playing in driving up overall health care costs.
Medicare Has Controlled Costs Better Than Private Insurance

• According to CMS, for common benefits, Medicare spending rose by an average of 4.3 percent each year between 1997 and 2009, while private insurance premiums grew at a rate of 6.5 percent per year. (See Table 13)

• According to a calculation by the National Academy for Social Insurance, if spending on Medicare rose at the same rate as private insurance premiums during that period, Medicare would have cost an additional $114 billion (or 31.7 percent).

• The CBO explicitly stated that its data on relative cost growth should not be used to make the argument that Goodman and Saving make, writing that the relatively low growth rate of all health care expenditures other than Medicare and Medicaid “should not be interpreted as meaning that Medicare or Medicaid is less able to control spending than private insurers.” Goodman and Saving mistakenly suggest that the growth rate of private insurance is the same as the growth rate of all health care expenditures other than Medicare and Medicaid; however, as CBO points out, the growth rate of all health care expenditures other than Medicare and Medicaid includes not just spending by private insurers, but also government programs and out-of-pocket costs paid by the uninsured.

• The CBO has predicted that the rising cost of private insurance will continue to outstrip Medicare for the next 30 years. The private insurance equivalent of Medicare would cost almost 40 percent more in 2022 for a typical 65-year old.

Medicare Has Lower Administrative Costs Than Private Plans.

• According to the Kaiser Family Foundation, administrative costs in Medicare are only about 2 percent of operating expenditures. Defenders of the insurance industry estimate administrative costs as 17 percent of revenue.

• Insurance industry-funded studies exclude private plans’ marketing costs and profits from their calculation of administrative costs. Even so, Medicare’s overhead is dramatically lower.
• Medicare administrative cost figures include the collection of Medicare taxes, fraud and abuse controls, and building costs. So-called “competition” in the private health care market has driven costs up.

• In most local markets, providers have monopoly power. Consequently, private insurers lack the bargaining power to contain prices.

• In most areas, two or three dominant insurers dominate the regional market, limit competition and make it extremely difficult if not impossible for new insurers to enter the marketplace and stimulate price competition.

• Medicare Advantage, which enrolls seniors in private health plans, has failed to deliver care more efficiently than traditional fee-for-service Medicare. Both the CBO and the Medicare Payment Advisory Commission (MedPAC), the commission which advises congress on Medicare’s finances, have calculated that Medicare Advantage plans covering the same care as traditional Medicare cost 12 percent more.

• Karen Ignagni, who heads America’s Health Insurance Plans (AHIP), the insurance industry’s trade association, has admitted that private plans cannot bargain down provider costs and has asked Washington to intervene.
Medicare Is Publicly Accountable, Private Plans Are Not
When it comes to how much it costs private plans to deliver care, or individual insurer innovations that deliver value, the publicly available data are scarce. Goodman and Saving present only one study on the ways that insurers try to control costs, and this was published by AHIP. Because Medicare is publicly accountable, it allows us to study what works so that we can improve the health care system.

• The authors cite a number of innovations that could lower the cost of care, but all of them have been introduced by doctors and clinics, not insurers. Because insurance companies treat their claims data as trade secrets, we do not know if they have adopted such innovations.

• Even government-funded Medicare Advantage plans don’t release payment and coverage data.
A closer look at the data shows that, contrary to Goodman and Saving’s claims, Medicare delivers health care more efficiently than private insurers. Medicare’s public accountability and bargaining power give it the ability to drive system change and control skyrocketing health care costs, while profit-driven private insurers have offered no solution.

For anyone who labels him or herself as a fiscal conservative, costs inevitably have to be the main criteria. Not partisan dogma or wishful thinking or ideology. It’s a straight up numbers game: what is the most cost effective program, for government, families and seniors, to manage the actual costs of health care.

Obviously, Medicare beats the bunch when ideology is put aside…and the new ideas incorporated into ACA regarding Medicare are likely to reduce health care delivery costs even further while not increasing the costs to senior citizens and families which is what the GOP endorsed Ryan privatization plan absolutely would do.

So, is the Romney plan better for the American public? No. While he doesn’t go so far as to endorse entirely the Ryan privatization plan, he definitely leans in that direction. But are his ideas and that of Representative Ryan the best ideas for all American seniors and their families? The numbers say a resounding No!

Written by Valerie Curl

January 14, 2012 at 9:25 AM

Cantor Says Medicare Still on Chopping Block

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Look for Ryan’s Medicare privatization plan, devised by the Republican sponsored Heartland Institute, to appear again during the next several budget debates and during the discussions by special Congressional Supercommittee on the Budget.

Everyone agrees that the health care delivery system in this country is too expensive. The US overall spends 17% of GDP on health care. The average in industrialized countries is approximately 11% and their outcomes are better. But how will shifting these high costs to seniors reduce the underlying cost problem within the health care delivery system? That doesn’t make good economic sense and will cause more families to either abandon their elderly parents or cause them to finance part of the costs. Moreover, as future participants in Medicare phase out of the system, those who remain in it will either see higher costs or fewer benefits.

Again the problem that the country faces, including every business that offers health care, is that the overall health care system is too expensive and eats up too much in the way of company profits that could be passed along in higher wages and in national GDP. Instead of cutting people off, the GOP needs to attack the real problem. Shifting costs fails the reality test – and serves no one well.

Written by Valerie Curl

August 4, 2011 at 12:29 PM

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