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Posts Tagged ‘senior citizens

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?

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Keep Your Hands Off My Social Security, Senator

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Thursday, Suzy Khimm of Mother Jones attended a little known and certainly not well publicized press conference of three Republican Senators. The reason: to announce changing Social Security.

Senator Lindsey Graham ( R-SC)

Not content with the GOP plan to upend Medicare and Medicaid, a trio of GOP senators have unveiled a proposal to go after Social Security as well. On Wednesday morning, Senators Lindsey Graham (R-SC.), Rand Paul (R-Ky.), and Mike Lee (R-Utah) presented their plan to slash an eye-popping $6.2 trillion from the debt by reforming Social Security—all without raising taxes. How will they pull this off? By hiking the Social Security retirement age to 70 years by 2032 and reducing benefits for those who earn more than an average of $43,000 over their lifetime. The Republicans’ plan also makes sure to exclude anyone bound to retire (and vote) any time soon, by exempting those currently older than 56 years from feeling the pain.

In unveiling the plan, Graham called any kind of tax increase to shore up Social Security a non-starter and economically catastrophic. “Don’t raise taxes unless you want to completely destroy America,” he said at the Wednesday morning press conference. “It’s much better to give up benefits on the end side than pay taxes now.”

Of course, according to the Congressional Budget Office, eliminating the cap on income subject to Social Security (now set at around $106,000) would all but eliminate any long-term solvency issues for Social Security.

Now, that these GOP Senators have jumped on the bandwagon to reduce social security benefits for most middle class, working people, several of the freshman, Tea Party elected House Republicans have jumped on the bandwagon and plan to introduce a similar bill in the House.

When asked whether the House GOP should be tackling Social Security, Rep. Austin Scott (R-Ga)—the elected president of the freshmen class—replied: “Absolutely. We have to put every issue on the table, and address all of them…. I don’t think we can afford to exclude anything right now, with the debt limit and the fiscal crisis we’re in.” Even freshman Rep. Allen West (R-Fla.), who represents a district with a significant elderly population, argued that raising the Social Security age would help address the deficit. “If you take it from 65 to 69, it does have a positive effect on bending down the deficit curve…back then, we were living to 59. Now we’re living to 78,” West told Mother Jones.

And a major Social Security debate in the House may already be on the horizon. Rep. Jason Chaffetz (R-Utah), also a tea party favorite, added that he planned to introduce his own Social Security reform bill in the upcoming weeks. He wouldn’t disclose any details of his plan, only to note that “lots of folks” in the House were involved—and that his plan would take major steps in overhauling the program. “Until we fully tackle entitlements, we can’t get on the trajectory that we need to,” Chaffetz said.

Learning from Charles Dickens….

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When Dickens wrote the Christmas Carol, Britain’s Parliament was dominated by faction that believed in an economic philosophy we now describe as “trickle down economics.” As far as I’ve been able to discern, the mid-1800s is the first time this economic philosophy was put into effect, more than a century before it was tried again during the Reagan administration.

It failed Britain’s working class as well as the many thousands of Irish who perished during the potato famine – just as it failed during Reagan and Bush 2.

Without a strong working class, the twin evils of ignorance and want are set loose upon the world, causing hunger, ignorance and want of basic necessities…and far too much misery for those who want to work and care for their families.

Most of us are far too young to remember conditions during and prior to the Great Depression. But the early scenes of Dickens “Christmas Carol” offer a brief glimpse into the conditions facing working class people, then and now. Do you remember poor houses? “Old folks homes” where seniors were warehoused and forgotten? Children removed from their poor families to be given away to families thousands of miles away, potentially as nothing more than indentured servants. Likely not. But conditions then were not pretty; they were far away from the United States we know today.

Is that the America to which we wish to return? An era of broken families, of hunger and want, of neglected and forgotten seniors?

Yet, much of the recent Tea Party/GOP rhetoric would have the U.S. return to that earlier, Dickens’ era.

Dickens was the probably the premier social commentator of his time, along with Jonathan Swift. However, this country appears to have forgotten the lessons of these early social commentators.

Earlier generations learned from their past: the Great Depression era programs saved many families – and seniors – from the prospects of workhouses, family destruction, and old folks warehouses.

I do not think the TEA/GOP know whereof they speak. And for that I am heartily ashamed.

Killing the Retirement Goose

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I admit to qualms over the 2% payroll tax reduction in the recently enacted tax package. I know that 2% will put extra monies right now into the hands of hardworking, financially strapped middle income Americans who really need all the extra money they can get, especially after losing so much during the 2008 financial crash, a decade of declining or flat incomes, and continued higher than inflation health care and education costs. I also know that President Obama promised that the Treasury would make up the missing funds. However, what they didn’t say – and maybe didn’t know – is that is illegal to for Treasury to make up the reduced funds.

By law, Social Security must be self-funded, meaning it cannot accept money from the Treasury or any other federal revenue source. The result of this new reduced payroll taxation will cause billions in lost revenue to Social Security for future generations.

In 1985, President Reagan signed a bill that allowed all the funds from Social Security to shifted from safe investments in Treasury bonds into the general Congressional budget fund, enabling Congress to spend Social Security funds as they chose. Over $2 trillion of Social Security funds have disappeared into the federal budget.

According to economics Professor Allen W. Smith, Eastern Illinois University (http://www.thebiglie.net), Congress essentially gives the Social Security Administration IOUs for the used funds, rather than those funds being invested into the safe Treasury Bonds that China buys or that Wall St currently purchases as safe repositories of excess funds. But the question remains: what happens if Congress cannot repay those IOUs?

What if the federal deficit hole is so huge, as it is now, that repaying those funds is impossible? (Again, the amount currently owed to Social Security by the Treasury – Congress – is $1.2 Trillion.)

The simple answer to reduce that Congressional debt is to change the rules of the Social Security program. In other words, change how it works, from a self-funded, Treasury bond-invested defined benefit program, as originally created, into a “welfare” program.

That’s what I fear this so-called “temporary” reduction of payroll taxes will cause.

Does anyone believe that at the end of 2011 the GOP will allow the decrease to simply expire? Given that the Bush tax cuts were due to expire this year but were extended, does anyone believe the GOP won’t advocate for maintaining the lowered payroll taxes funding Social Security, saying the taxpayers should keep more of their money rather than giving it to the government, even though Social Security continually maintains far more efficient costs (Return on Expenses) in a total cost-benefit analysis than any current IRA or 401k?

A few months ago, a very tax-conservative politico admitted that making Social Security in a welfare program was a laudatory goal. He saw it as a preliminary step to ending Social Security as we know it: a defined benefit retirement program, paid for by workers and administered by the federal government. His ideology he admitted, as defined by his conservative principles, is that government should not be in the social welfare business. According to him and his ideological partners in the GOP, retirement programs should be strictly in the purview of Wall St and private enterprise.

As a result of his and the mainstream GOP ideology, in redefining Social Security as a “social welfare program,” Congress would be able to continually change the rules and who qualifies until they met their goal of legislating Social Security out of existence.

While this goal may seem ideologically appropriate to some “free marketers,” it could have devastating effects on middle and lower income workers. Depending upon the so-called “free market” carries risk – as recently revealed in the many well-documented books and editorial analyses of national and international Wall St financial scandals – which many people have neither the expertise to navigate nor the time to manage.

As a result, Social Security has been the safe and secure backstop, if not the primary source of income, to millions of Americans who’ve worked hard their entire lives and want to live independently, not putting an additional financial burden on their children.

They believed that Social Security would provide that backstop towards providing them with fiscal responsibility and security without burdening their children.

But just as the 2009 market crash saw the loss of 50 to 60% of private retirement incomes disappear, perhaps to never be recovered when needed for retirement, the non-existence of Social Security would have devastating effects on the economy.

How many families today or in twenty years from now are prepared to accept the financial responsibility for taking care of their parents? In other words, are you prepared to have your parents to move in with you as families were required to do a hundred years ago in order for elder parents to survive?

There’s nothing wrong with extended families – parents, children and grandparents all living in the same household – but are you willing to accept that change and the greater financial responsibility that change implies? Think about all the fiscal implications, from a larger home needed for the additional occupants to the decreased control – and negotiation – of your household.

Ideological policy changes – and financing of those policies – have long lasting consequences. What consequences are you, as average American workers, willing to accept, especially after forking over so many of your hard earned dollars into a retirement system that you thought safe from Congressional overspending while under generally under-taxing to pay for Congress’ gross expenditures? Are you wiling to balance the budget on the backs of future seniors who’ve paid into a retirement system they thought safe from Congressional exploitation in order to pay for a truly corrupt tax system?

Remember Congress owes the Social Security Administration over $1.2 trillion dollars for the monies used by Congress to finance a decade’s long 60% increase in defense programs – over 100% higher than during the Cold War expenditures of the Reagan Presidency – or $1 of every $5 collected by the Federal government. Many of those programs and projects currently budgeted, the DOD doesn’t want and has stated the country cannot afford in addition to the fact that the recent general tax cuts make those programs and projects no longer affordable.

Not only do those DOD expenses inflate an already gross federal deficit, but overall actual health care costs threaten to wreak havoc on an already trained budget.

Should the Social Security Trust Fund be changed now into a “welfare” program to be used and changed by a profligate Congress as result of excess spending to put its already spent (deficit) financial house in order?

Social Security is not a welfare program – nor was it meant to be. It was always meant to be a defined benefit plan, safe from the predations of Wall St., which we all pay into insure a meager retirement should all else fail.

The way to fix to Social Security funding is to eliminate the caps so that everyone who pays into it – including those who have comfortable office jobs and expect to live much longer lives – pays to the last dollar of income, regardless of income as well as to force Congress to repay the funds over time they’ve already used to fund other programs and expenditures. Finally, Congress should be forced to return Social Security to its original “lockbox” as advocated by Al Gore, and prior to Pres. Reagan’s signing off on using those funds for general budgetary expenditures.

As a nation, we need to get serious about our expenditures, but doing so should not be done at the expense of diverting paid Social Security funds from future seniors into a Congressionally defined “welfare” program, enabling Congress to eliminate the repayment of funds it owes to American citizens.

Written by Valerie Curl

December 20, 2010 at 8:19 AM

As long as I get mine, the heck with you….

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That seems to be the mantra of many seniors attending town hall meetings this summer. How many times have we seen images on TV of seniors carrying signs saying, “ No Socialized health care;” “No socialism;” “No government run health insurance;” and numerous other similar signs?

At the same time seniors are saying no to health care reform for everyone else in the country, they’re saying, “Don’t touch my Medicare.”

Whether you’re for or against health care reform, the image of senior citizens, all of whom are drawing Social Security and Medicare benefits, crying out against socialism when they are the biggest beneficiaries of socialized medicine and retirement benefits is beyond the pale.

Where do these people think the money, which pays their health care and retirement, comes from? That it just magically appears? It comes from the Federal Government, Seniors! Both Medicare and Social Security are two huge socialistic programs. And every taxpayer is paying for those benefits.

Is this attitude the height of hypocrisy or are these people just plain stupid? They seem to think it’s perfectly acceptable that they receive “socialized” assistance, but they want to deny reasonably priced medical care to everyone else.

If they’re so adamantly against socialism, then they should all resign from Medicare and Social Security.

Written by Valerie Curl

August 29, 2009 at 9:12 PM

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