Fortitudine et Prudentia

Posts Tagged ‘Medicare’

The Real Empty Chair: Mitt Romney

In News and Opinion on September 11, 2012 at 1:38 pm

A new series of polling data from last week shows President Obama has significantly increased his lead over his republican challenger, Mitt Romney. The common analysis of The President’s significant five point bump in the polls is that it is a positive effect in wake of the successful DNC convention in Charlotte but many people are missing the negative effect the RNC Convention in Tampa had on Mitt Romney.

The conventions in Tampa and Charlotte were showcases of the political parties’ platforms, assessments of the present policies and their ideas for the future. The Democrats showcased their ideas well but really showed nothing new from the path for the future the President has been on: Education and job training, saving the auto industry, a more focused and strategic foreign policy, women’s rights, etc. The Republicans on the other hand showcased their party’s lack of ideas that has become indicative of the Romney campaign.

In the first night of the Democratic Convention President Obama’s name was mentioned 250 times compared to Mitt Romney’s name that was mentioned 213 times in all three nights of the Republican convention combined. The idea circulated that the Republican Party was disjointed during its convention because they are not totally united behind Romney, and that may be true, but another reason may be that they had no ideas and specifics to grab on to of Romney’s to promote and educate America on.

Romney went into the convention suffering from lack of specifics and left more exposed as an incompetent policy maker. Mr. Romney’s plans for America have not been properly thought out. Take for instance his stance on Medicare, he would like to keep it the way it is for seniors age 55 and older, and then change the program to a premium support voucher. But in conjunction with his stand on repealing “Obamacare” Mr. Romney’s plans for Senior’s healthcare turns disastrous in the very near future.

By repealing “Obamacare” and the $716 billion dollars in savings in the plan Mr. Romney shortens Medicare’s solvency by eight years. So if Mr. Romney gets his way Medicare will be bankrupt by 2016 meaning there is no possible way he can keep Medicare the way it is for seniors age 55 and older, he comes up six years short.

Another area Romney and his campaign failed to think through is his tax proposal. Romney would like to lower tax rates across the board for all tax payers and pay for it by eliminating “loopholes” in the tax code. The problem with this poorly thought out proposal is “loopholes” are deductions and credits many middle class Americans use to lower their tax burden.

This weekend conservative stalwart, George Will, echoed what democrats have been saying about Mitt Romney’s tax proposal. On This Week with George Stephanopoulos, of Romney’s tax plans Mr. Will said,   “There is uncertainty surrounding the Romney-Ryan tax cut plan, because they have not specified the deductions that will be closed. And we know where the big money is: mortgage interest deductions, charitable deductions, taxing that’s compensation, which it is, employee-provided health insurance, and state and local taxes. All of those, you either hit only the rich, in which case you don’t get much money, or you hit the middle class.”

This was a damning critique of the Romney tax plan because the two possible scenarios under Romney’s thinking would either cause America’s total debt to grow by almost $3 trillion needlessly or raise taxes on middle class while cutting taxes for the wealthy.

Moving from Romney’s vapidly inconsiderate plans for the future of America another area he came up empty on was the war in Afghanistan and the troops. Completely failing to mention Afghanistan or the troops in his acceptance speech during the Republican Convention begs the question, does Romney fully understand the job of President of the United States?

Romney is slumping in the polls after the conventions but not because of anything the democrats did, it’s because Romney and his team haven’t been thinking through their policy proposals. They unwittingly have been promoting ideas that are detrimental to the middle class and the nation as a whole. The reason why Romney’s support in the polls has waned after the conventions is because his flawed ideas reached a larger audience.

Perhaps calling Romney an empty chair isn’t fair, after all he does have plans, but the unfortunate thing is they are as poorly thought out as Clint Eastwood’s RNC speech.


Medicare – Ryan’s Vouchercare & Why You Should Care

In News and Opinion on August 16, 2012 at 12:09 am

If you’re an American and you’re planning on living until you’re 65 then this election is very important to you.

For the eternal optimists among us retirement is something far off into the future that we don’t consider daily but as sure as birthdays add up retirement is coming and with retirement comes healthcare needs. Coverage for doctor visits, hospital stays, prescription drugs, medical devices, and therapy is not cheap. In 2010 The Center for Medicare and Medicaid Services estimated it costs the government $11,743 per enrollee for annual coverage in Medicare. That covers Jazzy scooters, home health aides, and enough prescription drugs to fill a fisherman’s tackle box for all of America’s retired population.

Currently Medicare is funded by the tax payers who aren’t retired yet. Tax payers pay into the system until they retire then when they retire the younger tax payers pay for the Senior’s coverage. Taxpayers pay a whopping 1.45% of their income toward Medicare that their employers match dollar for dollar. That should be spelled out to dispel any notion of a typo – Medicare is taxed at one point four five percent of income.

For retirees Medicare is not a free ride. Currently there are monthly premiums for Doctor and prescription drug coverage but overall retired citizens are very happy with their Medicare and the system as whole. As a matter of fact they are happier with their healthcare coverage than people with employer based insurance.

It’s a good deal. Pay a measly 1.45% of your income during your working years and retire secure with great insurance you are most definitely going to need.

But there’s an onion – Medicare is going broke.

But Medicare has always been going broke. According to Patricia A Davis of the prestigious Congressional Research Service the current solvency projection of Medicare extends until 2024 which is in line with the average insolvency projections of 11.8 years historically.

This isn’t Medicare’s first rodeo with solvency. Just like any other health insurance coverage, public or private, if changes aren’t made the solvency outlook deteriorates. Healthcare companies raise premiums and change copayments as needed to stay solvent but not Medicare. Medicare slogs along like a dinosaur and this static notion of Medicare as not being adaptable leaves it open to the unfounded hysteria of inevitable extinction. Medicare is perceived as a lumbering dinosaur slogging its way off of a cliff because our government mismanages it.

Paul Ryan, now the Republican Vice Presidential nominee, is the latest opportunist to pull the proverbial fire alarm. Mr. Ryan came up with a plan to “fix” Medicare in 2010 as part of his budget entitled The Path to Prosperity. Nice name. Ryan didn’t want to fix Medicare like they do in the private sector or like as was done under Ronald Reagan’s Presidency; Ryan decided the best course of action is to hand over – the most popular and successful government program ever – to the private sector. His current boss, Mitt Romney, said he would sign Ryan’s plan into law if he became the President.

The Path to Prosperity has already passed through The House of Representatives and would surely be passed through budget reconciliation if Republicans get the majority after this election then it would be on Mr. Romney’s desk for his guaranteed signature by Spring 2013.

For a man who claims to be an “actuary wonk”, Ryan’s numbers get scary – very scary – if you plan on retiring. Under Ryan’s Plan ten years from now Medicare turns into “Vouchercare”, a system that issues American retirees coupons they can use toward the purchase of health coverage that’s similar to employer based coverage. The out of pocket costs for senior citizens would sky rocket according to the Congressional Budget Office. In 2012 the current out of pocket expense for seniors is 25% with traditional Medicare under Ryan’s “Vouchercare” the cost for seniors would rise to 68% or roughly $6,200 per year. That should be spelled out – six thousand two hundred dollars per year senior citizens would have to pay out of pocket under Ryan’s plan.

Ryan’s Medicare plan puts an unconscionable extra $400 per month expense on all retried American citizens – If you’re under the age of 55 today that means YOU and if you’re over the age of 55 today that means your children and grandchildren.

And there are unknowns with Ryan’s plan too. It’s not clear what happens to the Seniors who will not be able to afford the extra premium. Do the indigent seniors get dropped from their coverage or do they get forced into bankruptcy, nobody knows. Then there’s the question of what will be the minimum standard of coverage if Medicare gets handed over the insurance companies? What will be covered and what won’t be covered? What about Doctor and Hospital choice? Currently Medicare is accepted by most Doctors and Hospitals. Can a 93 year old navigate an HMO effectively?

There are many things that can be done rather than handing over Medicare to the insurance industry. Taxes can be raised 0.5%, the retirement age can be increased, coinsurances and deductibles can be raised, fraud, waste and abuse can be cracked down on. The practical options are almost endless. What shouldn’t be an option is giving seniors a voucher and wishing them good luck during what should be their best years of life.

-Ray Reilly

Romney/Ryan and the Road Map to Ruin

In News and Opinion on August 11, 2012 at 7:58 am

According to The Associated Press Mitt Romney is ready to roll the dice and name Paul Ryan has his VP pick today at 9am in Norfolk, Virginia. Ryan is a 42 year old career congressman who has represented Wisconsin’s first district for 6 terms and is currently considered the conservative fiscal whiz kid. Ryan, a republican, chairs the House Budget Committee and also sits on the ways and means committee. As far as money men go, Paul Ryan is it.

The pick of Ryan is a considerably bold choice by Romney because of his unconventional budget entitled, “The Path to Prosperity.” Romney has fully embraced the Ryan budget that Newt Gingrich famously called, “Right-wing social engineering.” This budget is rife with policies that go well beyond the normal bean counting people associate with budgets as it seeks to make fundamental changes in the so-called social contract of America.

At the center of the Ryan Budget are the usual suspects, healthcare and taxes. Guaranteed to  rile democrats at their core and rally the republican base this budget is the republican equivalent of “ObamaCare.”

The first cries from the left will undoubtedly be about the changes Ryan wishes to make to the government health insurance for retired Americans known as Medicare. Ryan has claimed that his budget doesn’t seek end Medicare as we know it but the changes are undeniable. Under the new guidelines of the Ryan Budget Medicare will still cover healthcare services for American Senior Citizens but with a few catches. Ryan envisions the government issuing coupons that Seniors will use toward the purchase of their health coverage and any additional costs for coverage will come out of pocket for senior citizens. In a complicated twist to this years version of the Ryan Plan a Senior Citizen can keep traditional medicare but any additional cost over 0.5% of the plan would have to be paid for by the subscriber. Bottom line – Out of Pocket expenses for Seniors will become more expensive.

Then there’s the Ryan Budget’s promise of broadening the tax base to reduce tax rates. Broadening the tax base is a simple idea, get more people to pay taxes and lower the rates. But like with the  proposed medicare changes there’s some catches. When the bipartisan Tax Policy Center looked at Ryan’s Budget they found it came up $4.6 trillion short of the current Bush tax rates over ten years. Unless Ryan addresses eliminating or reducing many deductions and credits within the tax code many middle class tax payers enjoy like the child tax credit and mortgage interest deduction the plan comes up about $6.2 trillion short of the 18% revenue of GDP the government has traditionally raised. The Ryan Tax Plan leaves a big hole and if the base isn’t broadened it will be an even larger hole.

The Path to Prosperity will be as front and center as Romney and Ryan will be from now until November. It carries with it a serious choice for the American voter and the contrast now between Mitt Romney and Barack Obama has never been more stark. To embrace the Romney/Ryan ticket is to embrace the Ryan Budget and its fundamental changes in much of the American social contract. Each voter now has a choice of whether the Romney/Ryan ticket will be a path to Prosperity or a Road Map to Ruin.