Wintery Knight

…integrating Christian faith and knowledge in the public square

Is Medicare in a debt crisis? Does Medicare need to be reformed?

Medicare is a social program that pays for the health care and prescription drugs of seniors. Forbes magazine explains the basic facts of the Medicare funding situation.

First, the facts:

Often lost in the campaign rhetoric and obscured by the opinionated news dominating the television and print media are the following background facts about Medicare, America’s most burdensome entitlement program given both the demographics and the growth expected in health care costs:

• Medicare is a taxpayer funded, government-run insurance program that is financially unsustainable in its current form. By all estimates, Medicare is spiraling into bankruptcy, with an unfunded liability of almost $38 trillion and a hospital insurance trust fund that will become insolvent in 2024, according to the 2012 Medicare Trustees Report.

• Medicare was already the single insurance program most likely to reject a claim, compared to all of the eight comparable private insurance plans studied in the AMA 2008 National Health Insurance Report Card. This rejection rate was double that of the private insurers’ average – those very same insurance companies vilified by President Obama as denying coverage to Americans.

• An increasing proportion of doctors are already not accepting Medicare patients. A 2008 report by the Medicare Payment Advisory Commission, an independent federal panel, said that 29 percent of its beneficiaries who were looking for a primary care doctor had a problem finding one. A 2008 survey by the Texas Medical Association that found that only 58 percent of the state’s doctors accepted new Medicare patients, and only 38 percent of primary care doctors did, a number shrinking due to government- decreed payment that is lower than cost. In the 2008 HSC national tracking survey, more than 20 percent of primary care doctors accepted no new Medicare patients (only 4.5 percent accepted no new privately insured patients) and about 40 percent of primary care doctors and 20 percent of specialists refused most new Medicare patients.

The rest of the article compares the Obama and Ryan plans for reforming Medicare.

Here’s a snippet:

President Obama’s plan for Medicare will not simply reduce access to doctors. According to the Medicare Trustees, Medicare payment reductions under the new law will cause hospitals, nursing facilities, and home health agencies to operate at a loss – 15 percent lose money by 2019, 25 percent by 2030, and 40 percent by 2050. The Trustees Report concluded the obvious – health care providers “would have to withdraw from serving Medicare beneficiaries, or shift substantial portions of Medicare costs to their non-Medicare, non-Medicaid payers.” Can American families with private insurance who already pay almost $1,800 per year – extra – for the underpayment by Medicare and Medicaid, subsidizing public insurance by more than $88 billion dollars per year, afford to add even more because of the president’s law?

Signed into law by President Obama is another nefarious method of reducing Medicare payments. A wholly unaccountable, government appointed 15-member Independent Payment Advisory Board, the IPAB, does not just “recommend” changes to reimbursements. It has unprecedented power to reduce (but not to increase) payments to doctors that the Secretary of Health and Human Services is required to implement. To be sure, the IPAB acts independently of the people, immune from Congressional oversight, and even beyond control of the judiciary – ensured in language within the law that isolates it from repeal.

The Paul Ryan plan changes nothing about Medicare for Americans 55 and older. Those who are younger than 55 will be given the option of choosing a private plan and then paying for it with a voucher provided by the government.

Filed under: News, , , , , , , , , , , , , ,

Paul Ryan teams up with Democrat Ron Wyden to push Medicare reform plan

Rep. Paul Ryan

Rep. Paul Ryan

From Investors Business Daily.

Excerpt:

Pity the poor Democrats. Here they were counting on scaring seniors about GOP plans to “destroy” Medicare when Rep. Paul Ryan teams up with a prominent Senate Democrat to offer a compromise reform.

From the White House on down, Democrats were wringing their hands this week about the bi-partisan Medicare reform plan offered up by Ryan and Sen. Ron Wyden, D-Ore.

Their plan would shift Medicare from an open-ended health benefit to one in which the government provides a set amount of money for insurance. Seniors could choose from a variety of private, approved plans, as well as the traditional government-run Medicare.

The subsidy would be based on the second cheapest plan in an area, and if seniors wanted more expansive coverage, they’d have to pay the difference out of their own pockets. The reform would also cap the growth in Medicare.

[...]As one Democratic congressional aide told the New York Times, “this plan gives bipartisan political cover to Ryan and other Republicans against whom we have been waging a very successful political offensive.”

[...]While we prefer Ryan’s original proposal to his current one, it’s to his credit that he realized the political need to produce a bi-partisan compromise. Wyden, too, deserves credit for his willingness to buck his party and sacrifice short-term political gain for much needed long-term reforms.

I took a look at Wyden’s ACU ratings, and he has a 9.23 out 100. I have no idea how Ryan got this guy on board. It’s magic.

Filed under: News, , , , , , , , , , , , , ,

Entitlements programs are going bankrupt: how can we fix them?

From the American Enterprise Institute, a post that explains in brief how to reform each of the three largest entitlement programs so that they will not go bankrupt by the time today’s younger workers need them.

Here are the programs:

  1. Social Security (a social program to redistribute wealth from current workers to current retirees)
  2. Medicaid (a social program to provide health care to low income/low wealth Americans)
  3. Medicare (a social program to provide health care and prescription drugs to older Americans)

And here’s one of the solutions (for Social Security):

Social Security is the easiest entitlement program to reform and can be done without raising taxes.

  • The age should be gradually raised to 70 by 2065.
  • Benefits should be indexed to price inflation, not wage inflation, as the program’s purpose is to keep the elderly out of poverty.
  • Benefits should gradually be reduced for earners with high incomes. The system should be a way to keep individuals out of poverty, not create a dependent upper- and middle-class.

Together these three reforms would ensure Social Security stays solvent. The entire system, however, could be easily replaced with a new program designed to keep seniors out of poverty and empower them throughout their retirement. People should be given the incentive to work longer by eliminating the Social Security payroll tax for individuals over 62, and a basic income supplement should be provided to impoverished senior citizens. Workers should then be given ownership of their retirement savings by enrolling all workers 55 and younger into a retirement savings account funded by 5 percent of the worker’s earnings (2.5 percent from the individual and 2.5 percent from the employer). These simple reforms would create a system that  actually provides a safety net for needy citizens — all for 60 percent of what the U.S. currently spends on Social Security.

Click through for the other two problems and solutions.

Filed under: Commentary, , , , , , , ,

Paul Ryan questions Chief Actuaries of Medicare, Medicaid and Social Security

I found all of this stuff on the House Budget Committee web site.

Medicare and Medicaid

Paul Ryan interviews Richard Foster, Chief Actuary of the Centers for Medicare and Medicaid Services.

Excerpt of transcript:

HBC CHAIRMAN RYAN: As you may know, I’ve been working across the aisle with a member of the Oregon delegation from the Senate on a premium support plan that uses competitive bidding to help determine the contribution. Competitive bidding we’ve seen has worked well in Medicare Part D and Medicare Advantage.  I’d like to get your thoughts on choice and competition as it relates to these previous successful reform plans. Given what we’ve seen in these aspects of Medicare, do you believe that competitive bidding is a process that can be successfully applied Medicare-wide?

CMS CHIEF ACTUARY FOSTER: Yes, I think it can. Obviously, it would represent a large change from the status quo, but I think it could work. We’ve seen the signs of this – you mentioned the Part D prescription drug program, for example, where the different drug plans compete against each other on the quality of their benefit package and the premium level. And we’ve seen – every year since Part D started – a migration of beneficiaries to more efficient plans with lower premiums. So that can help. We’ve also seen for durable medical equipment that competitive bidding, in this particular area of Fee-For-Service Medicare, reduced prices that we had to pay by 40 percent.

RYAN: By forty percent?

FOSTER: Forty percent, that’s right.

RYAN: Those are the kinds of cost savings we’re going to have to achieve if want to make good on the promise of the Medicare guarantee.  This should not be a partisan issue. Competitive bidding is something Alice Rivlin has been a champion of, Ron Wyden has been talking about, the Bipartisan Policy Center, and more. There is a lot of data out there that competitive bidding when applied Medicare-wide can achieve the benefit of keeping these benefits going while attacking the root cause of cost growth.

It sounds to me like there is a real crisis, that Ryan has a plan to solve it, and that the person who is the most aware of the finances of these two entitlements agrees with Ryan.

Social Security

Paul Ryan interviews Stephen Goss, Chief Actuary of the Social Security Administration.

Excerpt of transcript:

HBC CHAIRMAN RYAN:  If we do [nothing], then we have an across-the-board cut of about 23 percent that occurs in benefits. Is that correct?

SSA CHIEF ACTUARY GOSS: Exactly… The Commissioner standing at that time would simply have 77 cents available for every dollar of scheduled benefits, and would not be permitted to spend more than that. We do not have borrowing authority. So a decision would have to be made about who would get the money. We could have an across-the-board 23% cut immediately, or a Commissioner could say, ‘Well we’re not going to pay the March benefits in March. We’ll wait until April – wait until more revenues come in to allow full payment a month late.’ After a few months we would perhaps then have to start paying benefits twomonths late. So this would be a way that it could be handled. Of course, if people have to pay rent on time, that would be a difficulty. There’s no easy way out on this… We hope and pray that Congress would indeed act well before we ever hit the Trust Fund reserve exhaustion.

RYAN: Given that we have this abrupt 23% cut that occurs in law – current law – is it not wise so start reforming now, sooner, so that the distribution of the change is spread more broadly and evenly across income cohorts? Let me ask it this way: does that abrupt 23% cut hit current senior cohorts? A person who is turning 62, or 65 today – that affects them as well, correct?

GOSS: It certainly would. They would be at an older age at that time but clearly it would affect them. That is assuming that we wait and do absolutely nothing until that point.

RYAN: So if one provides reforms soon, could you not prevent these kinds of effects from hitting those current cohorts? Could you not phase reforms in gradually that prevent that 23% cut from happening so it doesn’t affect people who are currently in or near retirement? Could you structure reforms that prevent that from happening if you act sooner?

GOSS: Absolutely. We have a number of proposals – including yours Chairman Ryan – and many other proposals that would take exactly that approach. Our trustees and everybody who speaks on this has opined extensively about the value of acting sooner rather than later, so that we can have gradual changes phased in and we have more options if we act relatively soon.

In 2006, Nancy Pelosi was asked when she would be willing to fix these entitlement programs. Her reply? “Never. Is never good enough for you?“. Democrats hate children – they want to pile debt upon debt onto future generations, who will not even have mothers and fathers to take care of them. First they smash the family with no-fault divorce and same-sex marriage. Then they run up trillions and trillions of dollars in debt handing out bailouts and green energy grants to their election fundraisers. It’s sick.

Filed under: News, , , , , , , , , , , , , ,

Newt Gingrich: is he liberal or conservative?

Newt Gingrich on health care

From the Wall Street Journal. (H/T Reason to Stand)

Excerpt:

White House hopeful Newt Gingrich called the House Republican plan for Medicare “right-wing social engineering,” injecting a discordant GOP voice into the party’s efforts to reshape both entitlements and the broader budget debate.

In the same interview on Sunday, Mr. Gingrich backed a requirement that all Americans buy health insurance, complicating a Republican line of attack on President Barack Obama’s health law.

The former House speaker’s decision to stick with his previous support for an individual mandate comes days after former Massachusetts Gov. Mitt Romney defended the health revamp he championed as governor, which includes a mandate.

The moves suggest the Republican primary contest, which will include both men, could feature a robust debate on health care, with GOP candidates challenging the Democratic law while defending their own variations.

Newt Gingrich opposes Paul Ryan’s reforms

Consider this article from National Review.

Excerpt:

Newt Gingrich’s appearance on “Meet the Press” today could leave some wondering which party’s nomination he is running for. The former speaker had some harsh words for Paul Ryan’s (and by extension, nearly every House Republican’s) plan to reform Medicare, calling it “radical.”

“I don’t think right-wing social engineering is any more desirable than left-wing social engineering,” he said when asked about Ryan’s plan to transition to a “premium support” model for Medicare. “I don’t think imposing radical change from the right or the left is a very good way for a free society to operate.”

As far as an alternative, Gingrich trotted out the same appeal employed by Obama/Reid/Pelosi — for a “national conversation” on how to “improve” Medicare, and promised to eliminate ‘waste, fraud and abuse,’ etc.

Newt Gingrich on Hillary Clinton

More from the leftist New York Times.

Excerpt:

For Ms. Clinton, standing side by side with her husband’s onetime nemesis gives her the chance to burnish her credentials among the moderates she has been courting during her time in the Senate.

But in comments this week, she portrayed the rapprochement as one born of shared policy interests, not calculated politics.

“I know it’s a bit of an odd-fellow, or odd-woman, mix,” she said. “But the speaker and I have been talking about health care and national security now for several years, and I find that he and I have a lot in common in the way we see the problem.”

For his part, Mr. Gingrich, who helped lead the impeachment fight against President Bill Clinton, called Mrs. Clinton “very practical” and “very smart and very hard working,” adding, “I have been very struck working with her.”

Newt Gingrich on global warming

Newt Gingrich on foreign policy

Newt Gingrich endorsed a pro-abortion, pro-same-marriage candidate

Remember when Newt Gingrich endorsed the RINO Dede Scozzafava in New York?

Excerpt:

In a major coup for her campaign, Republican Dede Scozzafava today will pick up the endorsement of Newt Gingrich, one of the nation’s leading conservative figures and the architect of the “Republican Revolution” in the mid-1990s.

“The special election for the 23rd Congressional District is an important test leading up to the mid-term 2010 elections,” Gingrich said in a statement to supporters. “Our best chance to put responsible and principled leaders in Washington starts here, with Dede Scozzafava.”

The endorsement is important for Scozzafava, a social moderate, as she attempts to hold onto a conservative base eroded by Doug Hoffman, the Conservative Party candidate in the thee-way 23rd District race.

[...]Hoffman has mounted a late surge in the special election with endorsements by prominent conservatives that include former Republican Sen. Fred Thompson; Campaign for Working Families founder Gary Bauer; and the conservative Club for Growth in Washington, D.C.

Scozzafava’s candidacy is also reported to have triggered a deep divide among House Republicans, with some of the most conservative members refusing to support her campaign.

But Gingrich, who served as Speaker of the House from 1995 to 1999, wants to unite the party. He sees Scozzafava and the Upstate special election – the only House race in the nation this fall — as the best hope for Republicans to start a comeback and regain control of Congress.

Gingrich is apparently willing to overlook Scozzafava’s support for same-sex marriage and abortion rights.

The conservative Club for Growth lists some of his fiscal blunders.

Excerpt:

The second large error in Gingrich’s entitlement record was equally troubling: the former Speaker played a high profile advocacy role on behalf of President George W. Bush’s Medicare prescription drug benefit bill in 2003.  Gingrich penned several op-eds supporting the general thrust and specific provisions of the bill, urging House Republicans to pass what was billed at the time to be a $400 billion expansion of the federal government.

[...]In the 2009 special election for Congress in New York’s 23rd district, Gingrich was outspoken in his support of liberal Republican nominee Dede Scozzafava, up to the moment she finally quit the race after center-right voters rallied behind Conservative Party nominee Doug Hoffman.  Long after most prominent conservatives had endorsed Hoffman, Gingrich held firm in his advocacy for a liberal candidate who supported Obama’s stimulus plan and the pro-union “card check” proposal, among other bad positions.

In 2010, Gingrich openly campaigned for embattled U.S. Senator Robert Bennett in Utah, whom Gingrich’s wrongly called “a true-blue conservative.”  In 2008,  Gingrich aggressively supported and campaigned for liberal Congressman Wayne Gilchrist (R-MD) when he faced a conservative challenge from now-Congressman Andy Harris.  In 2006, same thing, when Gingrich backed liberal Congressman Joe Schwarz (R-MI) when he was challenged by conservative now-Congressman Tim Walberg.

Unfortunately, the problems in Speaker Gingrich’s record are frequent enough and serious enough to give pause.  On two of the most important recent issues that confronted limited government conservatives (creating the new budget busting Medicare drug entitlement, and the Wall Street bailout), Gingrich was on the wrong side.  His advocacy of an individual health care mandate is problematic.  His penchant for tinkering with rewards for favored industries and outcomes shows a troubling willingness to use federal power to coerce taxpayers into his preferred direction.  And his occasional hostility toward conservatives who do not share his desire to support liberal Republicans or to compromise on matters of principle is worrisome.

The totality leads one to be rather unsure what kind of president Newt Gingrich would be.  Past is often prologue, and in Gingrich’s case there is an enormous volume of past on which to base a judgment.  One could reasonably expect a President Gingrich to lead America in a pro-growth and limited government direction generally, possibly with flashes of real brilliance and accomplishment, but also likely with some serious disappointments and unevenness.

Maybe he is actually running to win the Democrat nomination this time.

Filed under: News, , , , , , , , , , , , , , , , , , , , , , , , , , ,

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