Ready For O’Ryancare?

Ready For O’Ryancare?

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This is how sexy the chatter gets over cocktails at health policy wonk-ins in Washington. This is how sexy the chatter gets over cocktails at health policy wonk-ins in Washington.

“No pre-ex’s, community rating, guaranteed issue.”

“No, that’s Obamacare stuff,” I said to my colleague, as she read a summary of Congressman Paul Ryan’s House Republican budget plan released on Tuesday. “Everyone in Medicare already has those. You must have the wrong memo.”

She scrolled to the top of her iPhone and pointed at the screen. “Summary of the Ryan Budget Plan – Medicare.”

“Maybe just a gimme for popular support?” I speculated, knowing from headline coverage earlier in the day that the Ryan plan sought to repeal Obamacare, not strengthen its most popular consumer protections. “Guaranteed issue but no mandate — that would sure hang the insurers out to dry. But why would you put that in a budget?”

“Here’s why,” she read. “‘Seniors buy coverage through new Medicare Exchange.'”

“Oh.”

Consumers need protections only when they are turned into consumers. And that is what Congressman Paul Ryan’s budget seeks to do for — or do to, depending on your feelings about medical capitalism — future Medicare beneficiaries.

The latest version of the Ryan budget — really his old budget, for three years running now – came out this week. The document generated near universal dismissal by the mainstream media as an act of pointless political grandstanding – to the Right, a courageous statement of fiscal responsibility, to the Left, a defiant display of Randian cruelty.

And so the budget will go nowhere politically, except onto the bonfire raging in Washington where there used to be discourse.

But the actual details of Ryan’s controversial proposal to remake Medicare – into what he and conservative economists call a “premium support” plan, and what defenders of the Medicare status quo deride as the program’s “voucherization” – are oddly familiar in non-partisan health policy circles, and not for reasons the Congressman will appreciate.

Sure, the document excoriates the President’s health reform law, as one might expect. The Ryan budget curtails Obamacare’s funding and calls for its outright repeal – while preserving its cuts to Medicare, retaining its tax increases, and re-architecting the future of Medicare along nearly its exact same design principles. Really.

Under the Ryan plan: Medicare recipients would choose from among competing private health insurance plans on a new government-run health insurance exchange. Insurers would offer plans at emerging market prices and seniors would be covered at the level of the second cheapest. Well-off seniors who want richer plans pay more, and the government subsidizes those less-well-off. Private insurers would not be able to discriminate against seniors for their pre-existing medical conditions and would have to charge all seniors the same premiums for the same plans.

Under Obamacare, Americans will choose from among competing private health insurance plans on new government-run health insurance exchanges. Insurers will offer plans at emerging market prices. Well-off Americans who want richer plans will choose the platinum or gold plans — versus the silver or bronze versions — and the government will subsidize those less-well-off. Insurers will not be able to discriminate against anyone for their pre-existing medical condition and will have to charge all people in the same broad age groups the same premiums for the same plans.

Premium support, voucherization, to-ma-to, to-mah-to, whatever. Let’s just call it what it is: Oryancare — Obamacare for Seniors.

The Ryan plan pushes Medicare from a dysfunctional program — where everything is always sort of paid for — into a transparent, competitive marketplace, using premium vouchers and co-payments. The health reform law pushes individuals, small businesses and the uninsured from a dysfunctional non-system — where too many are priced or kicked out and no one is ever sure what will be paid for — into a transparent, competitive marketplace, using premium subsidies and co-payments.

If only because it really is an act of political grandstanding, the same budget creating an Obamacare-like apparatus for seniors also calls for the repeal of Obamacare. The document reminds us one more time that Obamacare is a “government takeover” of health care (page 40) and repeats the bogus assertion that the law is 2,700 pages long (page 54) – even though the consensus erroneous figure is that the law is 2,400 pages. (The actual law as legislated – not originally drafted – is 955 pages.)

Because Congressman Ryan apparently thinks people will take his budget seriously, he makes provisions for the possibility that President Obama might not sign a bill overturning his signature domestic achievement, a law now bearing his name if only, at first, for the purpose of ridicule. Hedging against a scenario where no such repeal is forthcoming, the Ryan budget simultaneously starves Obamacare out of existence in two ways: by defunding its expansion of Medicaid — always help the neediest first! — and by defunding those overwrought bureaucratic contraptions needed for the implementation of the Obamacare, namely, government-run health insurance exchanges.

What remains from Obamacare in the Ryan budget, down to the dollar, are its cuts to Medicare — $716 billion to be precise. Yes, these are the very same cuts trotted out by Governor Romney and Congressman Ryan in their criticism of President Obama on the campaign trail, when the audience was sufficiently senior. With the new Ryan budget in hand, spotting such er – inconsistencies – does not require time-lapse photography: the budget retains many of the taxes included in Obamacare — as reported by even the Wall Street Journal — as the document itself criticizes those very same taxes.

Finally, the Ryan budget repeals the Independent Payment Advisory Board, or IPAB, the provision included in Obamacare to — guess what — control Medicare spending growth. As discussed here in January, IPAB is a black box, not a blueprint. No one is sure exactly what it will do or how, one of the more legitimate reasons it has become the biggest punching bag in Obamacare. All we know about IPAB is its goal: gather evidence for what Medicare should and should not be paying for, and use this to eliminate payment for medical treatment that is not only wasteful and unnecessary, but potentially dangerous.

The Ryan plan repeals IPAB and instead lets the market decide what medical treatments Medicare should and should not pay for. Because that works so well today. Medicare reform indeed.

But forget sore thumbs like IPAB. At their cores, the functional similarities between Oryancare and Obamacare are not all that different — once you power-wash the political rhetoric off both and recognize that both are voucher-like programs, with the same consumer protections and with the well-off subsidizing the not-so-well-off.

How is that possible? Because the two plans are actually adjacent to each other along the broad spectrum of health reform models developed and debated since the 1980s, which I discusesd here a few weeks ago. Premium support and voucher plans, as formulated by conservative economists, fit into the second box from the right.

Back at the health policy wonk-in, the talk all turns, inevitably, away from policy and back to politics.

“Charm offensive? Grand bargain? The President should call Ryan’s bluff on Medicare!”

Indeed, the President should call Ryan’s bluff on Medicare.

As they work on their “grand bargain,” President Obama should encourage Congressman Ryan and his fellow House Republicans to lay out and pitch their plan for reforming Medicare to those whom it will affect, even if the “reform” part of the plan cleverly does not affect them at all, but the next generation of Medicare beneficiaries.

During the summer recess, while talking up their fervor to “cut entitlement spending” at any political cost, they should explain at town hall meetings across the country how the plan will actually work. Especially the $716 billion in cuts that were so potentially dangerous a year ago, when they were included in Obamacare.

In between screams from those in attendance who love Medicare, hate government, and resent moochers, they should describe how Oryancare will let future seniors shop on a new government-run exchange for coverage from competing health plans, without worrying about medical or economic discrimination.

A few months later, those implementing Obamacare will also be rolling out new government-run health insurance exchanges – which will allow small businesses and individuals to shop for coverage from competing health plans, without worrying about medical or economic discrimination.

No doubt they will appreciate having the ground ready.

J.D. Kleinke is a pioneering health care information entrepreneur, medical economist, author, policy expert, and business strategist.

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77 Comments on "Ready For O’Ryancare?"


Guest
Apr 29, 2013

Has anyone discussed the principle that there should be differential treatment for those who choose to be high risk for health problems ie smokers / overweight.

An emotive debate!

Guest
Mar 25, 2013

Peter1

FYI, somewhere way above in this thread you referred me to an Urban Institute report that purported to estimate lifetime tax contributions to SS and Medicare vs lifetime benefits paid by those programs to people turning 65 in certain years at various wage levels and couples/singles status. When you made that reference, I pointed out some of the known issues with the Urban Institute’s methodology (e.g., did not do analysis from the point of view year people were born, used very low rate of return, etc.).

But your reference to it prompted me to go back and look at it again and I also noted an even more glaring error in its methodology. On the contribution side, the Urban Institute counts our B and D premiums (which go into the B/D trust fund) and our lifetime Medicare payroll tax contribution (which feeds into the A trust fund) but the Urban Institute does not count the percentage of our lifetime of income taxes that feeds the Part B/D trust fund. The Urban Institute has confirmed for me that it leaves out this contribution, probably the largest contribution we make.

As a result if it not correct for Urban Institute to say that all Medicare/SS beneficiaries get much more out of the programs than they put in. That is very likely the case for those over 75 or so (because they did not have to pay Medicare most of their working lives, the income on which they paid Medicare tax on was capped, they got to retire earlier at “full SS pay,” etc.). But it is not the case for those of us born between 1940 and 1960 (we probably break even, particularly those born in the 1940s). And as I said, those born after 1960 get screwed — even if the programs still exist — unless the programs are reformed.

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Peter1
Mar 25, 2013

“But it is not the case for those of us born between 1940 and 1960 (we probably break even, particularly those born in the 1940s).”

Then why is Medicare in trouble?

Guest
Mar 23, 2013

If Peter is right, and I think he is, then Houston we have a big problem.

A large bloc of people are alive at age 55 or 60 that used to be dead from heart disease or lung cancer or kidney failure.

These peiople have been working in low wage jobs largely since they were 20 years old.

35 or 40 years is enough!

We have never (god forbid!) forced restaurants or janitorial services to fund pension plans. The very few union plans like for bakers have been savaged.

The labor markets as a whole do not want these workers.

The answer is what James Galbraith proposed– increae Social Security benefits and let them reitre! Raise social security taxes on those who make over $113,000 to pay for this.

Longer life spans are going to cost America a lot of money. Get over it.

Bob Hertz, The Health Care Crusade

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Peter1
Mar 24, 2013

“If Peter is right, and I think he is, then Houston we have a big problem.”

Bob, and everyone, you need to see this!

http://apps.npr.org/unfit-for-work/

Guest
Aquifer
Mar 23, 2013

i agree – we need to fortify both SS and Medicare benefits. At this point we have the lowest level of corporate tax and the least progressive income tax in decades. This nonsense about the need to “balance the budget” on the backs of SS and Medicare recipients is one of the most cynical political ploys I have seen in a very long time. The deficit was caused by unfunded wars, Bush/Obama tax cuts, and bank bailouts – the rich are indeed getting richer, and the poor poorer. And there is nothing ‘inevitable” or “necessary” about that – it is the result of political decisions as to whom this economy “should” work for. We can and need to make different political decisions ASAP – that is up to us ..

Guest
Mar 23, 2013

To Aquifer:

No matter how much we lower average costs, as you imply, at least 20 million more persons will come onto Medicare in the next 10 years.

This is a combination of those turning 65, plus disability beneficiiaries, less deaths.

Too many reformers underestimate pure demographics,

Ask me for more detaisl!

Guest
Aquifer
Mar 23, 2013

Well, bob, if i had my way 300 million more would come into Medicare in the next few years ,,,

Guest
Peter1
Mar 23, 2013

“plus disability beneficiiaries”

The big medical scam. People move from unemployment to disability. States move people from welfare (state paid) to disability (fed paid).

Guest
Mar 23, 2013

Just to clarify my last statistic………

Medicare will absorb about 30% of federal revenues.

Mediare in 2021 will cost close to $1 trillion a year, assuming the existing demographics and annual medical inflation of 3%.

Federal revenues in 2010 were $2.1 trillkon. Revenues are growing now but may not exceed $3 trillion a year in 2021

Guest
Aquifer
Mar 23, 2013

bob –

As you say, those numbers assume that costs will rise at their current rate – an assumption that seems to me unwarranted if one introduces the cost control mechanisms that SP makes possible …

Guest
Mar 23, 2013

I am afraid I am on Dennis’s side in not blaming insurance companies.

The worst insurance rates I ever saw were from a co-op non-profit insurance federation that was set up for school districts.

The rates were high because many years of seniority rights had produced a very old work force. There were no commissions, no CEO’s , and certainly no profits.

Insurane in an expensive pool will be expensive. Insurance for a pool of younger men will be cheap.

On a purely actuarial basis, insurance rates for someone over 60 would be 6 times as large as for someone age 30.

And yet persons age 60 do not have six times the income of those aged 30. In fact statistics say that inomes on average start falling at about age 55.

For this reason, a free market in health insurance would leave about 80% of old people uninsured. Hospitals would go broke in short order.

This is why we need some type of public program funded by taxes.
Medicare is indeed clumsy but it will have to be refined, not replaced.

As Joseph White and George Halvorson have pointed out, the problem with Medicare is that the government does not own the hospitals. There is a permanent adversarial relationship of private institutions looking for any way they can to extract more and more federal dollars.

Medicare is the constant and dumb victim of upcoding.

The classic texts of the single payer movement (by Bodenheim, Himmelstein, McCanne, and others) all say that hospitals will be put on global budgets.

No one in HHS today is going to tell Mayo Clinic what to spend. As we speak, Mayo Clinic is telling the city of Rochester MN what to spend on roads and parking ramps for its pending expansion.

Medicare for All is ethically right, but could lead to an incredible looting of the federal budget. Even the existing Medicare will absorb 30% of the federal budget by 2021.

Guest
Aquifer
Mar 23, 2013

bob –
As you point out, your example argues for a single payer solution – the larger the pool the more spread out the risk and the lower the cost per person. But the other really important aspect, dealing with total cost, is the ability of the insurer to “bargain” (or “price fix” as Dennis would say) with providers – the larger the insurer the more leverage it has.

As for “blaming insurance companies”, perhaps it would be more accurate to lay blame on a system that uses private insurers – that, no matter their “intent”, ipso facto, introduce unnecessary costs, confusion and complexity into the system ….

As for the mayo Clinic – fine, if it wants to be a non participant, so be it … If it is telling Rochester what to do, i suspect it has more to do with its financial clout and “influence” with politicians than with its stance on healthcare ..

And as for “looting the budget” methinks that will solely depend on the extent to which Medicare uses its clout as a cost controller AND to the extent to which the gov’t starts dealing with major aspects of the cause of disease – via the “food chain” and pollutants. Methinks it is a mistake to focus only on what is traditionally encompassed by the term “healthcare system” when trying to figure out how to deal with the cost of healthcare.

But that, ISTM, is the problem when one focuses primarily on the cost of a system instead of its purpose – Once you focus on the purpose of a “healthcare system” instead of its cost, it quickly becomes obvious that you must deal with the things that get in the way of “health” and when you do that well and honestly, you wind up reducing the cost as an “added benefit” ….

Or we could continue to argue about the “political in-feasibility” of dealing with the elements of society that put profit over people – if we do that all this charming discussion is nothing more than hot air, and the planet has quite enough of that already …

Guest
Mar 22, 2013

that should say “$85,000 a year” up there somewhere, not month

Guest
Mar 22, 2013

I don’t think I ever used the word “failure” but maybe I did? What you describe is Original 1965 uncoordinated-care Fee for Service Medicare.

Its Part A is not “free.” Depending on how old you are, you paid payroll taxes for 45-50 years (and may still be paying them if you did not retire at 65) for your “free” Part A. Part A actually costs about $400 a month, which is being taken from the Trust Fund where your Medicare payroll taxes went. If you are in your mid-60s, you are part of the first age cohort to have paid Medicare payroll taxes your whole working life and will be the first not to get the truly “free” Part A insurance that your older brothers and sisters and parents got (as fully discussed by and intended by the 1965 Congress). You (if self employed) and your employer probably paid in over $60,000 in these payroll taxes if you were an average wage earner. At $400 a month — and making no adjustment for what you could have earned had you saved and invested that money yourself and making no adjustment for the pooling effects of those that paid in but died before reaching average life expectancy — you will have to live to near 80 to break even.

Part A is especially bad insurance in that it does not do what insurance usually does: protect you from financial disaster in the worst case situation. There are lifetime limits on how much Part A will pay out. (This is not changed by Obamacare, which prohibits such lifetime limits in insurance for those under 65.) And you should mention that that $1300 deductible is per admitted hospitalization, not per year (there is no annual cap but effectively the annual cap is around $8000). There are also per-incident limits on SNF admissions which are much more lengthy than admitted hospitalizations (but be careful: you have to have an admitted hospitalization of 3 or more days before Medicare Part A will pay for a SNF admission.). Part A does not cover custodial nursing care or hospitalizations — even emergency hospitalizations — outside the U.S.

As you say, Original Medicare’s Part B has a $104 monthly premium unless you make more than $85,000 a month or less than about $14,000 (depending on where you live). It is optional. Part B also costs about $400 a month so you get $300 a month in Part B premium support (you may prefer to call it a voucher) from general tax revenues (to which you also contributed of course for 40-50 years and are most likely still contributing). It’s kind of hard to figure what percentage of your income taxes over the years should be attributed to your Part B needs. I would say at least the same amount as your Part A contributions so at $400 a month — and making no adjustment for what you could have earned had you saved and invested that money yourself and making no adjustment for the pooling effects of those that paid in but died before reaching average life expectancy — you will also have to live to near 80 to break even on Part B should you choose it. (And if you don’t opt for Part B…. thanks from the rest of us for contributing to the Part B pool with your income tax dollars!!!)

Part B is not terrible insurance like Part A. It is just bad insurance because of its high co-insurance rate, which you mention, and because there are many important healthcare services not covered. Part B does cover observed hospital visits (which therefore — with 20% coinsurance — often end up costing a lot more than admitted hospitalizations), outpatient visits and procedures, ER visits in the U.S., visits to some but not all types of doctors, a few free preventive tests and procedures, some durable medical equipment and drugs that have to be administered in a hospital or hospital-like setting. Part B does not cover annual physicals, self administered drugs, ER visits outside the U.S., dentists, audiologists, optometrists, acupuncture and other such stuff some government bureaucrat has decided is not health related.

No matter what I think, Original 1965 Fee for Service Medicare was considered a failure by both seniors and almost every politician and policy wonk — both Democrats and Republicans — from almost the minute it was enacted. A large unregulated market for supplemental insurance grew up around it and the wonks offered all kinds of plans to fix it between 1965 and 1995 (especially see the debate over catastrophic coverage during the 1980s, a still needed reform that was scuttled by the Democrats who didn’t want Reagan to look good). Sometime in the early 90s, the private market that had grown around it – called Medigap – was reformed by Federal law. Finally using a blueprint fashioned by two Democrats in 1995, reform of the public portion of Medicare was enacted in 1997 and signed by President Clinton. Further major and minor reforms happened in 2000, 2003, 2008 and 2010. It’s a real mismash today of some uncoordinated care and some accountable care, some capitation (now called global payment) and some fee for service, and some private and some public supplemental options. It is all administered by over 40 insurance companies with overlapping geographic and functional jurisdictions. Some FFS care is covered in some jurisdictions and not in others. Some competitive bidding has helped lower costs and some has raised costs. Original Medicare “offers” providers very low fixed prices which an increasing number are refusing to accept. Recent CMS Director Berwick estimated that the Original FFS Medicare part of Medicare is wasting 20% to 30% of its multi-hundred-billion-dollar budget

But I don’t think I called it a failure. Maybe I said work in progress.

Guest
Peter1
Mar 23, 2013
Guest
Aquifer
Mar 22, 2013

Dennois – no matter how many times you say it – methinks a majority of folks don’t consider Medicare a “failure” …. needs improvement and expansion …

Guest
Aquifer
Mar 22, 2013

oops – “Dennois” – looks like i made you a Frenchman …

Guest
Mar 22, 2013

When health care and health insurance are paid for with private voluntary dollars, then wealthy persons will receive better health care on average, and poor people will depend mainly on the charity of doctors and hospitals (and of church hospitals).

That was roughly the situation of the elderly in America before 1965. (I was a teenage then, so my comment is from research.)

The achievement of Medicare has been to run elderly health care through the tax system, which makes things far more equal. As Dennis notes above, this is a value judgement the country has made and by and large does not regret.

The Affordable Care Act is a clumsy attempt to run health insurance through the tax system for persons under age 65. It is clumsy because the designers of the ACA are trying to limit tax support to the uninsured and self-employed, and still have full maintenance of effort by corporations.
This may prove a fatal flaw.

Finally, just a personal experience. At age 64 I had a stingy private health insurance policy that cost $5,000 a year and had a $5,000 deductible plus 20% coinsurance.

At age 65 I received Medicare Part A for free, with a $1300 deductible, and I pay $99 a month for Part B, with a $150 deductible and 20% coinsurance.

To me Medicare is heaven. Those who complain about Medicare must have come off of very generous corporate or union plan, as far as I can tell.

Guest
Peter1
Mar 22, 2013

“At age 65 I received Medicare Part A for free, with a $1300 deductible, and I pay $99 a month for Part B, with a $150 deductible and 20% coinsurance.”

Dennis would call that Medicare failure.

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Aquifer
Mar 22, 2013

I agree – my experience is similar, i have made a decision to get a supplemental policy – at $168/mo for payment of deductibles and co-pays, i figured it was worth it – between that and the SS deduction for part B – my insurance is considerably cheaper than before …

Guest
Mar 21, 2013

You ask:

“I wonder what you would consider making everyone a winner in Medicare would take? Pay more of your health costs while taking less tax?”

I don’t use this terminology. That is the implicit (maybe even explicit) terminology of the Urban Institute study you referenced. That’s why I put “winners” in quotes. And again it applies to all government programs, not just Medicare.

That being said, I’d say the guy in my example would be a “winner” in life (as opposed to Medicare). What could you add to my example other than that he died in his own bed at home in his 90s… with his 25-year-old mistress :)

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Peter1
Mar 21, 2013

“Pay the tax?”

I might. I won’t qualify for a subsidy and I don’t have any faith that the “exchanges” will offer less costly insurance. The individual pools will really determine the cost. With pre-exist not rated I think my pool will be unfairly loaded with high risk. Insurance and providers are not taking a shave in the ACA so guess who will – other than the taxpayer.

I could also sign on to my wife’s policy at work but up to now its been way too expensive even compared to individual policy. Here in NC we really only get one choice, BCBS, and that company has a terrible history of good customer service and keeping insurance costs low. It has a good history of giving it’s executives 50% pay increases while raising rates 5% -10% yearly.

I wonder what you would consider making everyone a winner in Medicare would take? Pay more of your health costs while taking less tax?

Guest
Peter1
Mar 19, 2013

“No one analyzes insurance that way.”

It sounds like you’re an insurance guy. For one I don’t agree that determining who gets health care and who doesn’t be based on an insurance mind set (pre-exist, max lifetime, affordability), although everything needs to be paid for. On that I’m a proud “lefty”, except for I guess the “paid for” part.

“The Urban Institute document to which you refer does not take that approach; it takes the weird approach of only talking about the “winners””

If by winners you mean those who got sick and needed Medicare against those losers who did not get sick – well that would be life. Insurance, even in the insurance world, has “winners”, those who get back at least their premiums by having an event(s), and those who don’t have an event. That’s the shared risk part.

I’m uninsured (used to be insured) but now I contribute to my own health care through saving my own premiums. So far I’ve spent far less than I would have if I’d paid an insurance company. I guess I’m one of the winners for now. Maybe if more people had access to actuarial tables they’d make the same decision, seeing the odds are in their favor for not buying insurance.

Where all this guesstimating (winner/loser) gets flawed is how long you live and how healthy you stay and how long it takes for you to die while consuming health care dollars. If we separate those who get sick (winners) and those who don’t (losers) then it’s not any form of “social” insurance, it becomes only about “ME”, not the other guy in a shared world.

I think we spend far too many dollars on “soon to die” old people, so I don’t know where that puts me on your “lefty” scale.

Guest
Mar 21, 2013

No, I am not an “insurance guy.” I am just a senior citizen on Medicare who gets really PO’d when demagogues or goo goos like the author of this blog post (not sure which he is; he does not seem to know which he is) totally misrepresent Medicare. With their Medicare misinformation, people like the author of this post do a disservice to my fellow seniors (but most of us know Medicare is lousy and 95% of us make other arrangements) and he does an even bigger disservice to the public debate about the national debt because those not yet on Medicare think it’s good insurance, worth protecting at all costs no matter what it does to the nation in its current form.

Yes, that what I meant by “winners,” which is why I used quotes. But both my statistics and Urban Institute’s are broader than just healthcare “winners.” My statistics include both SS and Medicaid and the Urban Institute’s includes SS.

But you don’t have to become really sick to be a Medicare “winner.” Best case: you are relatively healthy given your age, you get free or low cost preventive tests and vaccines as needed, cataract surgery at 68, a knee replacement at 75, a pacemaker at 83, treatment for some serious but not life threatening if caught in time disease in your late 80s, very low cost drugs to lower blood pressure and chloresterol (sp.) and shrink your prostate all these years into your 90s, and die in your sleep in your own bed in your own home. A middle-income baby boomer that makes it that far will just about get back what he put in counting the payroll and income taxes paid for 50 years, plus the ongoing Medicare premiums and supplemental “private” insurance, and the OOP healthcare expenses and income taxes paid during retirement

Anyone older is way ahead of the game. Anyone younger is screwed unless some variation of the Aaron/Bowles/Dominici/Reischauer/Rivlin/Ryan/ Simpson/ Widen plan is passed. Which ain’t going to happen as long as people like this author call it the Ryan plan.

(Aside: Interesting that you self insure? What are you going to do next year when you are mandated to carry it? Pay the tax?)

Guest
Mar 19, 2013

By the way, I did not say those that “died” got screwed (they did but I would hope not to be that crass). I said middle income people born after 1960 get scrwed by Medicare under current law.

Guest
Mar 19, 2013

Peter

1. Your observation about house and car insurance is a very good point and you illustrate one of the two major faults with the Urban Institute research you reference (anything from Urban Institute has a total left-wng bias to the point of intellectual dishonesty). Notice in my wording, using the approach that any insurance — social or otherwise — analysis would take, that I said people “born between 1945 and 1960,” or “people born after 1960.” I took it from the point of who is in the insurance pool.

The Urban Institute document to which you refer does not take that approach; it takes the weird approach of only talking about the “winners” (that is, it just looks at the people who had a car accident, to relate it your observation, and sees how they did compared to what they paid in vs. what all car owners paid in whether or not they had an accident). The Urban Institute begins with people who lived to 65 and then only those that live to average life expectancy thereafter. No one analyzes insurance that way.

When I say middle income people born between 1945 an 1960 have paid their own way vis a vis Medicare (and way overpaid vis a vis SS, even according to Urban Institute), I am analyzing it the house/car insurance way. Urban Institute is not.

Of course that is not true of low income seniors of any age cohort. They get free Medicare healthcare insurance and free drugs and insurance. (But even that does not count what they put in as taxpayers.) I have no objection to that. That is a concious choice we have made as a country. But I go ballistic when I see misleading statistical statements from the left that say things like half of us poor seniors “only have an average income fo $22,000″ 90% of the time, or some such weasel wording (half of… average… 90% of the time) that totally misleads readers. It’s total deceit by the left.

2. Urban Institute is also flawed in the linked report because it uses a 50% lower rate of retrun on the money people put in than most analysis like this, particularly 50% lower than what the CBO uses.

This information is buried in the footnotes of the Urban Institute report but you’ll never see it in the press releases or the fawining left-wing coverage of such things,

(By the way, I didn’t give any link so not sure what you are referring to. My sources are almost totally CBO, CRS and MedPAC. Everything else seems totally biased and even the government stuff has to be read with some understanding of what party was in power in the White House (MedPAC) or Congress (CRS and CBO) at the time it was written.)

Guest
Peter1
Mar 18, 2013

” No “taxpayer funded Medicare” pays for the private insurance that seniors use”

Dennis, my point was that without taxpayer funded Medicare there would not be enough senior income left to buy private for most seniors. Private insurance benefits from the supported income seniors receive from not paying the full cost of their senior health care through Medicare. Just as private insurers will profit from subsidies through Obamacare.

Guest
Mar 19, 2013

Peter

You seem to be a guy that likes to deal in facts rather than ideology.

Here are some facts:

— Not all seniors are the same when it comes to the question “Did you pay for your Medicare or did “the taxpayer?”
— For starters, you have to separate seniors as a group between those born before 1945 and those born in or after 1945.
— Then you have to divide them among low income, middle income and high income (which the law defines as making more tan $85,000 with no inflation adjustment; this will take in 20% of seniors by 2020)
— Those middle income seniors born before 1945 intentionally got a great deal from the 1965 Congress that created Medicare and Medicaid. Those middle income seniors and about to be seniors born between 1945 and 1960 basically pay their own way when it comes to Medicare (but not for long-term care which is not covered by Medicare). Those middle income taxpayers born after 1960 are pretty much screwed by current law.
— Low income seniors of all currently retired age cohorts get free Medicare healthcare insurance,almost free drugs (nominal co-pays) and totally free drug plan premiums and no exposure to the donut hole (the definition of low income differs slightly between the Medicare healthcare insurance and drug insurance programs), and the lowest of low income (those with very few assets) also get Medicaid (millions of low-middle-income/minimal-asset seniors — with the specific assistance of the Medicare/Medicaid bureaucracy — conciously “spend down” their assets by giving them to their spouses or children so that they qualify for Medicaid)
— High income seniors of all age cohorts considerably overcontribute to the Medicare trust fund as compared to what they get out of it (as — sadly — do people who die before reaching 65 of course); But who care’s; they’re rich
— Finally you have to factor in that most seniors were taxpayers for 45-50 years and are still taxpayers and that on average Medicare only pays 45% of our healthcare costs, including paying Medicare Part B, C and D premiums
— If you want to make the forced division between taxpayer and middle-income senior that the left likes to make (and pretend that seniors never paid taxes and don’t still pay taxes), the “taxpayer” pays 75% of Parts, B, C and D and 0% of A . Melded, “the taxpayer” pays about 60% of Medicare (and as noted above, Medicare in turn only pays of a senior’s total healthcare costs)

Guest
Peter1
Mar 19, 2013

Dennis, this seems to support the fact that we (all) get more than we put in, maybe other than “super rich”. I don’t think they’re suffering.

http://www.urban.org/UploadedPDF/412660-Social-Security-and-Medicare-Taxes-and-Benefits-Over-a-Lifetime.pdf

I don’t know how high in income you want to go to calculate when the “rich” get less than they pay, but if $85,000 is it the above chart does seem to support your contention. I’ll look at your link.

To say that those who die get screwed is to say that those who do not collect on house and car insurance also get screwed. These programs should be treated as social “insurance” not return of benefits, no matter what your income. The “rich” have also benefited from a 15% tax rate on investment income while this is not enjoyed by wage earners.

The trick to controlling contributions is to control costs, which this system is not doing.