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“Move From Unemployment Insurance To Income Insurance”: Why The Sharing Economy Is Harming Workers And What Must Be Done

In this holiday season it’s especially appropriate to acknowledge how many Americans don’t have steady work.

The so-called “share economy” includes independent contractors, temporary workers, the self-employed, part-timers, freelancers, and free agents. Most file 1099s rather than W2s, for tax purposes.

It’s estimated that in five years over 40 percent of the American labor force will be in such uncertain work; in a decade, most of us.

Already two-thirds of American workers are living paycheck to paycheck.

This trend shifts all economic risks onto workers. A downturn in demand, or sudden change in consumer needs, or a personal injury or sickness, can make it impossible to pay the bills.

It eliminates labor protections such as the minimum wage, worker safety, family and medical leave, and overtime.

And it ends employer-financed insurance – Social Security, workers’ compensation, unemployment benefits, and employer-provided health insurance under the Affordable Care Act.

No wonder, according to polls, almost a quarter of American workers worry they won’t be earning enough in the future. That’s up from 15 percent a decade ago.

Such uncertainty can be hard on families, too. Children of parents working unpredictable schedules or outside standard daytime working hours are likely to have lower cognitive skills and more behavioral problems, according to new research.

What to do?

Courts are overflowing with lawsuits over whether companies have misclassified “employees” as “independent contractors,” resulting in a profusion of criteria and definitions.

We should aim instead for simplicity: Whoever pays more than half of someone’s income, or provides more than half their working hours should be responsible for all the labor protections and insurance an employee is entitled to.

In addition, to restore some certainty to people’s lives, we need to move away from unemployment insurance and toward income insurance.

Say, for example, your monthly income dips more than 50 percent below the average monthly income you’ve received from all the jobs you’ve taken over the preceding five years. With income insurance, you’d automatically receive half the difference for up to a year.

It’s possible to have a flexible economy and also provide workers some minimal level of security.

A decent society requires no less.

 

By: Robert Reich, The Robert Reich Blog, November 27, 2015

November 30, 2015 Posted by | Jobs, Shared Economy, Unemployment Benefits, Unemployment Insurance, Workers | , , , , , | 1 Comment

Is Paul Ryan’s Medicare A Voucher System Or Not: Who Is Demagoguing Who?

During the White House meeting this week between President Obama and the Republican leadership, Rep. Paul Ryan took the President to task for demagoguing Ryan’s proposed Medicare changes.

According to the Congressman, the insistence on the part of the President- and his brother and sister Democrats – that the program is a voucher system rather than the ‘premium support’ program Ryan steadfastly claims the idea to be, is grossly misleading Americans, all for the purpose of political gain.

While Ryan’s confrontation with Obama brought cheers from the GOP freshman class who fill the corridors of Congress these days, the question that needs to be asked is, ”Who is demagoguing who?”

In truth, the concepts behind premium support and voucher programs are fairly close, each with a similar objective – the government helping out the beneficiary by paying a portion of a benefit, in this case an insurance premium.

Rep. Ryan likes to point out that his proposed Medicare program is the same as that employed by the Federal Employees Benefits Program and the Medicare Part D benefit that helps seniors pay for their prescription drugs. Both these programs operate using government premium support, whereby the government contributes towards the payment of the premiums charged by the private insurance carrier to the beneficiary, but makes the government’s share of the premium payment directly to the insurance company issuing the policy.

This direct payment is what is often considered the point of distinction between a voucher and premium support. In a voucher program the government gives the financial support directly to the beneficiaries who are then on their own to do what they will with the money, so long as they don’t look to the government to do anything else for them.

Using this standard alone, Rep. Ryan would have a point.

Indeed, his plan proposes seniors going to private insurers for their health care coverage with the government contributing a share of the premium charges and making the payment directly to the insurance company. This is just as the federal government does in the cases of federal employee benefits and Medicare Part D.

However, there is a more important distinction between premium support plans and vouchers.

In the plan that provides heath care benefits for federal employees, on which Ryan relies to make his premium support case, if a government employee’s premium costs go up –and they always do – the government increases the premium support in lockstep with the increased premium.

Not so with RyanCare.

Ryan’s proposal, that would turn Medicare into a private insurance program with the government providing assistance to seniors on their premium payments, limits increases in that support to the cost of living index – an amount wholly insufficient to cover the extra costs as we know that rising costs of health care and premium charges always exceed annual cost of living increases. Thus, if premiums increase (and of course they will) the costs of these increases will be shifted to our senior citizens who, in most instances, would not appear to have the ability to take on these increased costs on their fixed retirement budgets.

This, by anyone’s definition, is a voucher program.

In a recent piece by Washington Post blogger Ezra Klein, Ezra interviewed Henry Aaron of the Brookings Institute and Bob Reischauer of the Urban Institute. Messrs. Aaron and Brookings are the two gentlemen who originally came up with the term “premium support” to describe their idea for a Medicare system where the program is opened up to competition by private insurers but has safeguards built in to protect Medicare beneficiaries from the very cost shifting program the Ryan plan proposes.

While Ryan has largely adopted this model – the two originators make clear that he has done so without the key cost shifting safeguards that they believe are so essential to it working.

According to Aaron-

If one does the arithmetic, income grows a few percentage points faster than prices. Health-care spending grows faster than income by a couple of percentage points. So we’re looking at linking to an index that grows less rapidly than health-care costs by three to four percentage points a year. Piled up over 10 years, and that’s a huge erosion of coverage. It’s vouchers, not premium support.

Via Washington Post

Clearly, Ryan’s plan bears a far greater resemblance to a voucher program than the premium support programs he looks to as back up for what he is selling.

We can have a debate as to whether we would be better off turning Medicare over to the private markets. While I believe it is an idea fraught with dangerous consequences to our future seniors (those who are not yet 55 years of age), an honest debate to discuss these different ideas cannot hurt.

However, when Ryan and friends continue to play the political game of blaming the President for misleading the public when it is, in fact, Ryan who is attempting to mislead, there will be no honest debate.

It is not the President who is demagoguing on this one – it is Paul Ryan.

 

By: Rick Ungar, The Policy Page, Forbes, June 5, 2011

June 6, 2011 Posted by | Affordable Care Act, Budget, Congress, Conservatives, Consumers, GOP, Government, Health Care, Health Care Costs, Health Reform, Ideologues, Ideology, Lawmakers, Medicare, Politics, President Obama, Public Health, Rep Paul Ryan, Republicans, Right Wing, Seniors, Under Insured, Uninsured, Wealthy | , , , , , , , , , , , , , | Leave a comment

The Ryan Plan For Medicaid: Not Good For Low-Income Americans Or State Budgets

With Washington looking for ways to rein in costly entitlement programs and state governments struggling to balance budgets, conservatives have revived an old nostrum: turning Medicaid into a block grant program.

The desire for fiscal relief is understandable. Medicaid insures low-income people and in these tough economic times, enrollment and costs — for the federal government and state governments — have swelled.

Representative Paul Ryan, and the House Republicans, are now proposing to ease Washington’s strain by capping federal contributions. Like his proposal for Medicare, that would only shift the burden — this time onto both state governments and beneficiaries.

Still, some governors may be tempted. His plan promises them greater flexibility to manage their programs — and achieve greater efficiency and save money. That may sound good, but the truth is, no foreseeable efficiencies will compensate for the big loss of federal contribution.

Mr. Ryan also wants to repeal the health care reform law and its requirement that states expand their Medicaid rolls starting in 2014. Once again Washington would pay the vast bulk of the added cost, so states would be turning down a very good deal to save a lesser amount of money.

Here’s how Medicaid currently works: Washington sets minimum requirements for who can enroll and what services must be covered, and pays half of the bill in the richest states and three-quarters of the bill in the poorest state. If people are poor enough to qualify and a medical service recommended by their doctors is covered, the state and federal governments will pick up the tab, with minimal co-payments by the beneficiaries. That is a big plus for enrollees’ health, and a healthy population is good for everyone. But the costs are undeniably high.

Enter the House Republicans’ budget proposal. Instead of a commitment to insure as many people as meet the criteria, it would substitute a set amount per state. Starting in 2013, the grant would probably equal what the state would have received anyway through federal matching funds, although that is not spelled out. After that, the block grant would rise each year only at the national rate of inflation, with adjustments for population growth.

There are several problems with that, starting with that inflation-pegged rate of growth, which could not possibly keep pace with the rising cost of medical care. The Congressional Budget Office estimates that federal payments would be 35 percent lower in 2022 than currently projected and 49 percent lower in 2030.

To make up the difference, states would probably have to cut payments to doctors, hospitals or nursing homes; curtail eligibility; reduce benefits; or increase their own payments for Medicaid. The problems do not end there. If a bad economy led to a sharp jump in unemployment, a state’s grant would remain the same. Nor would the block grant grow fast enough to accommodate expensive advances in medicine, rising demand for long-term care, or unexpected health care needs in the wake of epidemics or natural disasters. This would put an ever-tightening squeeze on states, forcing them to drop enrollees, cut services or pump up their own contributions.

This is not the way to go. The real problem is not Medicaid. Contrary to most perceptions, it is a relatively efficient program — with low administrative costs, a high reliance on managed care and much lower payments to providers than other public and private insurance.

The real problem is soaring medical costs. The Ryan plan does little to address that. The health care law, which Republicans have vowed to repeal, seeks to reform the entire system to deliver quality care at lower cost.

To encourage that process, President Obama recently proposed a simplified matching rate for Medicaid, which would reward states for efficiencies and automatically increase federal payments if a recession drives up enrollments and state costs. The president’s approach is better for low-income Americans and for state budgets as well.

By: The New York Times, Editorial, April 30, 2011

April 30, 2011 Posted by | Affordable Care Act, Budget, Deficits, GOP, Government, Governors, Health Care, Health Care Costs, Health Reform, Jobs, Lawmakers, Medicaid, Medicare, Politics, President Obama, Rep Paul Ryan, Republicans, States | , , , , , , , , | Leave a comment

Congressional Budget Office Looks At “RyanCare” Rationing And It Ain’t Pretty

The Congressional Budget Office has released its preliminary analysis (PDF) of House Budget Committee Chairman Paul Ryan’s budget, and I wouldn’t say it’s pretty. According to the CBO, Medicare beneficiaries will be left paying more for less. The CBO goes about this in a bit of a confusing way, setting a “benchmark” that corresponds to the cost of purchasing a private plan equivalent to Medicare, and then seeing how much more that plan would cost than Medicare under two different scenarios. Compared with either scenario, RyanCare costs a lot more than Medicare:

Under the proposal, most elderly people would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, the CBO estimated the beneficiary’s spending on premiums and out-of-pocket expenditures as a share of a benchmark: what total health-care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary’s spending would be 68 percent of that benchmark under the proposal, 25 percent under the extended-baseline scenario, and 30 percent under the alternative fiscal scenario.

If Medicare’s beneficiaries are getting less for more, Medicaid’s are simply getting less, period:

Federal payments for Medicaid under the proposal would be substantially smaller than currently projected amounts. States would have additional flexibility to design and manage their Medicaid programs, and they might achieve greater efficiencies in the delivery of care than under current law. Even with additional flexibility, however, the large projected reduction in payments would probably require states to decrease payments to Medicaid providers, reduce eligibility for Medicaid, provide less extensive coverage to beneficiaries, or pay more themselves than would be the case under current law.

As the CBO recognizes, a lot of what Ryan is doing isn’t saving money so much as shifting costs. Poor people and seniors don’t need less health care because Medicare and Medicaid are providing less health care. They just have to pay for more of it on their own. And as the CBO says, it’s hard to imagine Congress simply ignoring their pleas for help:

Under the proposal analyzed here, debt would eventually shrink relative to the size of the economy — but the gradually increasing number of Medicare beneficiaries participating in the new premium support program would bear a much larger share of their health care costs than they would under the current program; payments to physicians and other providers for services provided under the traditional Medicare program would be restrained (as under the two scenarios); states would have to pay substantially more for their Medicaid programs or tightly constrain spending for those programs; and spending for federal programs other than Social Security and the major health care programs would be reduced far below historical levels relative to GDP. It is unclear whether and how future lawmakers would address the pressures resulting from the long-term scenarios or the proposal analyzed here.

By: Ezra Klein, The Washington Post, April 5, 2011

April 5, 2011 Posted by | Affordable Care Act, Congress, Conservatives, Consumers, Economy, Federal Budget, GOP, Health Care Costs, Medicaid, Medicare, Politics, Rep Paul Ryan, Republicans, States | , , , , , , , , , , | Leave a comment

   

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