Tag Archives: Medicare

The Facts On Medicare: Obama Vs. Ryan

With Mitt Romney’s selection of Paul Ryan as his choice for Vice President, it is likely that the election for President in 2012 will come down to public perception of who really does stand for Medicare. More importantly, it will come down to voter’s perception of who really does stand with senior citizens, now and into the future. The politicking has been intense, and there is an emerging sense of confusion about what each side really does (or would do) with Medicare.

What then, are the unbiased facts? President Obama and the liberals approach the issue as one of ensuring that healthcare is a near-universal provision for Americans. To them, the government of the people can, through taxation and administrative regulation, provide for a health care safety net that works with the free market for younger Americans, and supplants it for our nation’s retirees. For Paul Ryan, Mitt Romney, and the conservatives, the issue is providing for the health care needs of seniors within a predefined budget framework. This notion is built on the idea that a free market will see to the needs of the public, and that money not spent by the government is money saved by the economy.

This blog spends considerable space on the issue of free markets and the fantastic reports of their miraculous powers, so this post will focus on the specifics of the plans themselves, and keep commentary to a minimum. What is clear is that both President Obama and conservatives recognize the need to take action against the cost explosion that is threatening the Medicare program. While the actions differ (in some cases), the initial cuts in spending are similar. It is the long-term effect of the actions that show the greatest variance.

The greatest difficulty in analyzing the positions comes from the volume of activity that Representative Ryan has focused on Medicare, and the vague ambivalence of Mr. Romney on the same topic. Where Paul Ryan has co-authored three different plans (House Concurrent Budget Resolution 34, The Rivlin/Ryan Plan, and the Roadmap For America’s Future), Mr. Romney has abandoned many of the positions he held as recently as 2008, and has been both vague and shifty on his current intentions. President Obama’s intentions and actions are far more clear, as the Affordable Care Act of 2010 is established law, and his further intentions on Medicare have been released by the Office of Management and Budget.

What follows is a simple table describing the general differences between the two competing ideologies on Medicare.

Area of Action

President Obama

Romney/Ryan
Medicare Advantage Makes subsidies for this privatized version of Medicare contingent on income. No specific mention.
Medicare Parts A and B Coverage and Eligibility No changes to coverage or eligibility. Some conservative proposals to raise eligibility age, but none in a Ryan-specific plan. Medicare Part A and B turned from guaranteed coverage to vouchers indexed to inflation. Vouchers, which would go into effect in 2021 are built around the Medicare cost of delivery in 2012. Medicare’s cost of delivery is currently lower than the private market for insurance.
Payments To Providers Payments lowered to facilities with higher than normal rates of readmission. Coverage of unpaid premiums and copayments capped at 25% (currently they are 70%). Payments would no longer be made directly to providers; vouchers be provided to beneficiaries directly for their use in the private insurance market.
Growth In Aggregate Cost The Medicare Payment Advisory Commission, which has recommended billions in cuts over the years that were ignored by Congress, was replaced by the Independent Payment Advisory Board that is tasked with limiting cost growth in Medicare Spending to a fixed percentage of GDP. The IPAB cannot be overruled by Congress without a super-majority vote. Growth in aggregate cost is not addressed, the focus of these plans simply being growth in government cost.

The approach taken by President Obama and the liberals cuts payments to providers, and places limits on the flexibility of insurance companies. It does not cut benefits or coverage to individuals. The approach taken by Mr. Ryan and, presumably, the Romney/Ryan ticket, places total dollar limits on future enrollees based on 2012 dollars, and places its full faith in the ability of the marketplace to cover the retired on the basis of those vouchers.

This post links above to Representative Ryan’s page on his Roadmap, the pdf of the House Concurrent Resolution 34, the CBO’s response to the Rivlin/Ryan plan, and the Office of Management and Budget’s pdf on the deficit and spending resolutions. Citizens can also find easily available information on Medicare, health care spending, and a variety of proposals, compared side by side, at the Kaiser Family Foundation. That site also has an interactive timeline for the implementation of the various facets of the Act known as ObamaCare.

Comment here or on Facebook, and tell The Rational Middle what you think about the competing plans, and how they would affect our nation.

 

The Rational Middle is listening…

What Entitlements?

For the past few years, a common refrain among conservatives (and to be fair, many other Americans concerned about their government), is the notion that we live in an “entitlement society”. Large programs like Social Security and Medicare have been known as entitlements because of the founding belief of those two programs; that all Americans are entitled to a secure future. In the first decade of this century, however, the term entitlement has become a pejorative; much like the word “liberal”, entitlement is being hurled around the universe of politicians and pundits like a curse word.

The Rational Middle would like to know why.

Social Security and Medicare guarantee both a modest income as well as health care for American seniors. Setting aside the moral foundations for these programs, the two constructs reduce the pool of working Americans by tens of millions, reducing pressure on the job markets. And then there is the way that these programs are paid for:

Everybody whose employer practices withholding, pays for Social Security and Medicare. That includes, by the way, illegal aliens working on stolen s.s.n. numbers who will never collect a retirement check.

Furthermore, the tax that supports Social Security and Medicare is a flat tax…almost. That is to say, it is a flat tax for the Working Class, because if you made more than $110,100 in 2012, you and your employer paid less than the rest of us. This year, employers paid 6.2% of an employees wages up to $110,100, and employees paid 4.2% up to the same threshold. Medicare does not have an income threshold, meaning the “evil program” that Reagan likened to Soviet Communism is the only federal program paid for via a truly flat tax.

So, the programs are as universally popular as any in history, and are paid for by taxes that are flat to regressive. Even better, Social Security was designed to save money while the Baby Boomers were working in order to have the money available once they retired. Which is why the deficit in Social Security is being paid for out of the Trust Fund…as it was designed to do.

Universally popular program, necessary program, program paid for by a flat tax (actually, a regressive tax), program built to save during flush times in preparation for lean times. You would think that Medicare and Social Security would be two programs that Mitt and Paul would want to leave alone. You would be wrong.

Paul Ryan cosponsored legislation with John Sununu in 2004 that would privatize Social Security; diverting its annual receipts into Wall Street hands (yes, the very same hands on the rudder of the housing market). You can read about the plan here. Wall Street made billions in commissions and fees after needing the Bush TARP to cover their poor performances, what do you suppose they would make on $10 trillion (the amount Social Security will collect in the next decade)?

Of course Mr. Ryan is more famous for the Medicare “plan” he proposed in his far less intelligent than reviewed budget proposals. Democrats have said that he plans to eliminate Medicare. Republicans have said that is a lie. What is true is that Ryan did more with Medicare than he and his party have proposed doing with health care in general. But his method would clearly, and without dispute, eliminate the guarantee that seniors have with health care right now. The Ryan Plan would also, by extension, eliminate a major source of hospital and clinic revenue  for the foreseeable future.

I don’t know what Romney thinks about Ryan’s plans for Social Security and Medicare, but he did pick the guy for the V.P. job, and Ryan’s resume is thin where everything else is concerned. Does Ryan want to destroy Medicare and Social Security…no, I don’t think so. Would his plans destroy the two programs for millions of Americans who have paid their fair share for a lifetime?

Absolutely.

 

The Rational Middle is listening…

 

Hey Seniors, This Is Obamacare

Obamacare…the most effective political boogieman since Julius Caesar, has overtaken our nation. Senior citizens it seems have been the first to experience it’s horrors. While the conservative mainstream media focuses on the nearly irrelevant question of whether the individual mandate is constitutional, Obamacare has been hard at work changing the lives of Americans in their golden years. But what actually has happened; what is the terrible cost of this program?

Politics

Obamacare is the direct cause of at least 80 layoffs in Congress, although it is difficult to feel pity for former House Democrats (and a handful of Senators) who were too cowardly to run for reelection on the merits of a bill they voted on.
Obamacare is an underlying cause in President Obama’s fall from political grace to political reality. A significant fraction of liberals continue to insist that the President pushed a bill on the public that was too conservative. A significant fraction of independents believe that the President pushed a bill on the public that was too liberal. Finally, a significant fraction of conservatives believe the President pushed a bill on the public that was too Sharia.

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Conservatives And Original Thinking

Then First Lady Hillary Clinton chaired the group that, in 1993, proposed the last major attempt at health reform before the Affordable Care Act of 2010. The plan was widely panned, and politicians and pundits of every stripe (including Congressional Democrats) rushed to form alternatives. The conservative Heritage Foundation proposed an innovative idea built around insurance exchanges and an individual mandate to carry health insurance. The plan was built in recognition of costs that were inflating rapidly due to a lack of real competition.

It was an interesting idea in 1993; so interesting that when President Obama and others went looking for a politically realistic alternative to single-payer health care, they adopted the concept of exchanges (and the mandate) as the core of their plan. As Mitt Romney had already passed a version of the Heritage Plan in Massachusetts, it seemed like a good idea. The problem, of course, is that it isn’t 1993 anymore; politics isn’t about problem-solving anymore, it is about winning. To make matters worse, it appears that conservatives have abandoned any pretense of creativity or reason in their approach to leadership. Reminiscent of Henry Ford’s position on customer choice (you can have the Model-T in any color you want, as long as its black), conservatives are willing to use any means to solve national problems, as long as the solution is a tax cut.

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Twisting The Medicare Debate

Paul Ryan and the Republicans are upset. They are fighting mad that Democrats have framed his budget blueprint as the destruction of Medicare, and even more furious that the public is buying the argument. The problem, for Republicans, is that the basic points being hammered on by the Democrats are exactly correct; the Ryan Plan does destroy Medicare as we know it, it does raise costs of delivery to seniors after implementation, and it will result in millions of uninsured or underinsured seniors.

Here is the “but”; the core idea of the Ryan Plan would control costs within the federal budget. The keys to the previous statement are “core idea” and “federal budget”. If you believe a problem only exists if it is reflected in the federal budget, then fixed price vouchers, indexed to inflation, is a sound idea. But for a large majority of Americans, the basic idea of the Ryan Plan amounts to an individual mandate to sink or swim in our golden years. Maybe though, there is a compromise available. There is, just possibly, a solution that uses the Ryan Plan as its foundation.

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False Advertising

“Social Security broke earlier than expected.” “Nations retirement programs bankrupt by 2036.” “Social Security and Medicare to be out of money earlier than previously thought.”

For years now, Peterson’s deficit hawks have been on a mission to privatize the retirement security programs that a super-majority of Americans approve of and support. They have lied and misinformed, distorted and obfuscated, all with the intention of driving the $1 trillion per year collected by the FICA tax directly into Wall Street coffers. They have convinced a generation of headline writers to support their fight, and those writers went into overdrive last week.

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