Affordable Care Act Delivers Big Savings For Seniors
Most of the Affordable Care Act won’t take effect for a few years — and if court rulings and the 2012 elections go a certain way, it may not take effect at all — but there’s already evidence that the reform law is working.
It’s making a big difference in providing coverage for young adults; it’s providing treatment options for women like Spike Dolomite Ward; and it’s slowing the growth in Medicare spending.
It’s also, as Jonathan Cohn explained, saving seniors quite a bit of money on prescription medication.
Under the terms of the Affordable Care Act — yes, Obamacare — pharmaceutical companies provide a 50 percent discount on name-brand drugs for seniors who hit the “donut hole.” The donut hole is the gap in coverage that begins once an individual Medicare beneficiary has purchased $2,840 in drugs over the course of a year. At that point, the beneficiary becomes completely responsible for prescription costs — in other words, he or she has to pay for them out of his pocket — until he or she has spent another $3,600.
It may not sound like a lot of money. But the seniors who hit the donut hole are, by definition, the ones with the most medical problems. Saving a few hundred dollars, on average, makes a real difference. And that’s precisely what’s happening, according to data the administration released today. According to its calculations, 2.65 million seniors hit the donut hole — and then saved an average of $569 each. The data runs through October. More seniors will hit the donut hole through year’s end, so the total number of beneficiaries who take advantage of the discount in 2012 should end up higher.
In an interview with USA Today, Jonathan Blum, director of the Center for Medicare, added, “We’re very pleased with the numbers. We found the Part D premiums have also stayed constant, despite predictions that they would go up in 2012.”
Seniors have been some of the biggest skeptics of the Affordable Care Act, but they’ve also seen some of the most direct benefits. Indeed, USAT’s report went on to note that as of the end of November, “more than 24 million people, or about half of those with traditional Medicare, have gone in for a free annual physical or other screening exam since the rules changed this year because of the health care law.”
If Republicans repeal the law, all of these benefits will simply disappear. It’s something voters may want to keep in mind.
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, December 7, 2011
What Does Super Committee Failure Mean For Healthcare?
The medical community is buzzing with concern this afternoon over what the failure of the Joint Select Committee on Deficit Reduction means for healthcare providers and recipients.
Under the ‘trigger’ provisions agreed upon during the August debt default crisis, were the super-committee to fail to arrive at their own formula for getting rid of $1.2 trillion in deficit – a circumstance that has now become reality – Medicare would find itself facing an annual cut of 2 percent each year for a ten year period beginning in 2013.
Should this actually occur it would be disastrous for health of the nation’s senior citizens. Properly configured, the cuts could be made without biting into benefits for the elderly who depend upon the program, but the trigger mechanism does not point to specific areas of the federal health program where the cuts could be targeted in a way that would reduce spending while protecting benefits. Thus, everything would have be cut by the 2% amount, including medical benefits.
Personally, I don’t believe for a moment that the sequester provisions that were the penalty for failure of the deficit committee will ever see the light of day. There are thirteen months to go before these provisions kick in and Congress is already planning way to work around the cuts – particularly with respect to the defense budget. As a result, we can fully expect that the lame-duck session that will take place immediately following next November’s elections will either do away with or drastically modify the anticipated cuts.
It should also be noted that there are many policy experts who believe that had the panel reached an agreement, the damage to Medicare may have been far more serious than the planned 2 percent annual cuts.
There is, however, some real potential for immediate damage as a result of this Congressional failure.
The physician community had hoped that a deal would have brought resolution to the Medicare payment reductions doctors face each and every year as a result of the sustainable growth rate (SGR) formula. While Congress has traditionally delayed the cuts each year, the current decrease scheduled – should it actually happen – would hit physicians with a 27% pay cut for caring for Medicare patients starting January, 2012.
Given the tenor of Congress these days, there seems to be some chance that the Republicans might wish to make their point by allowing the payment reduction to take place. Should this happen, we’ve got a very big problem on our hands.
Physicians are already unable to make much-if any-profit on what Medicare pays them to treat our nation’s elderly. A near 30% cut would cause many-far too many-doctors to close up shop to seniors who are unable to cover the fees doctors require to stay in business out of their own pockets. The disastrous result this would lead to is obvious.
Says American Medical Association president, Peter Carmel:
The failure of the deficit committee forces our nation to continue on an unsustainable path that puts current and future generations of Americans at risk for harsh consequences The deficit committee had a unique opportunity to stabilize the Medicare program for America’s seniors now and for generations to come.
Once again, Congress failed to stop the annual charade of scheduled Medicare physician payment cuts and short-term patches, which spends more taxpayer money to perpetuate a policy everyone agrees is fatally flawed.
As I often point out, doctors are the one element of our healthcare system that are irreplaceable. Having hospitals are of little value when there are no physicians walking the halls to care for us. Drugs aren’t going to reach those who need them if there are no doctors to write the prescriptions.
Let’s hope that Congress is not so foolish as to make their point by hurting physicians and the seniors who depend upon them.
By: Rick Ungar, Forbes, November 21, 2011
Three Reasons Why It’s Better For The Economy If The Super-Committee Fails To Get A Deal
Last Thursday’s Washington Postheadline blared: “Debt panel’s lack of progress raises alarm on Hill.”
In fact it is far better for everyday Americans if the so-called Super Committee fails entirely to get a deal.
The overarching reason is simple: any deal they are likely to strike will make life worse for everyday Americans — and worsen our prospects for long-term economic growth.
Of course that’s not the view of many denizens of the Capitol who are still obsessed by the notion that it is critical for the Congress to produce a “compromise” that raises revenue and cuts “entitlements.” There are three reasons why these people are wrong:
1). Any deal would likely slash the income of many everyday Americans. You could design a plan to substantially reduce the deficit without big cuts in Social Security, Medicare or Medicaid. My wife, Congresswoman Jan Schakowsky, who served on President Obama’s Fiscal Commission, designed just such a proposal last year. And, of course, Social Security has nothing to do with the deficit in the first place.
Unfortunately, however, in order to get Republican support any large-scale deal in the Super Committee would almost certainly require big cuts in either Social Security, Medicare or Medicaid — or all of them. Substantial cuts in any of these programs will make life harder for everyday Americans and reduce the likelihood of long-term economic growth.
Without a “deal” in the Super Committee, the current budget plan does not cut Social Security, Medicare and Medicaid — and that’s a good thing.
According to the Social Security Administration, the average monthly Social Security check now averages the princely sum of $1,082 — or about $13,000 per year. Next year, for the first time since 2009, payments will increase by $39 per month to offset inflation, but $18 a month of that increase will go right back out the door in the form of Medicare premium increases.
Already under current law, Medicare Part B premiums, that cover services like doctors, outpatient care and home health services, must be set annually to cover 25% of program costs. And remember that Medicare recipients aren’t getting an “entitlement” — they are getting an earned benefit that they paid for throughout their working lives. The same, of course, is true of Social Security.
Mean while, Medicaid is the principle means of assuring that America actually begins to provide health care for all — including nursing home and home care.
The problem with medical care costs isn’t that “greedy” seniors and others are gobbling up too much care. The problem is that the costs of providing care are going up too fast. In fact, the per capita costs of providing health care in America is 50% higher than anywhere else on earth, and the World Health Organization only ranks health care outcomes as 37th, in the world.
Medicare is actually the most efficient means in the American economy for providing health care. Any action by the “Super Committee” that reduces the percentage of Americans on Medicare — say, by raising the eligibility age from 65 to 67 — would cost the American economy.
- According to a study by the Kaiser Family Foundation, if such a proposal were operational in 2014 it would raise total health care spending in America by $5.7 billion per year.
- This is so because, while it would save the Federal government a net of about $5.7 billion ($24 billion savings in Medicare payments largely offset by $18 billion of increased Medicaid payments and subsidies to low-income participants in exchanges), it would also generate an additional $11.4 billion in higher health care costs for individuals, employers and states — resulting in a net cost to the economy of $5.7 billion.
The one thing you could do to cut Medicare costs without hurting ordinary families or the economy as a whole is to require Medicare to negotiate with the drug companies for lower prices the same way the Veterans Administration does today. That would cut hundreds of billions in costs to the government over the next ten years, but don’t expect the Republicans to include that as an acceptable cut in “entitlements” as part of a Super Committee deal.
Of course, America has no business cutting the income of seniors who get $13,000 a year in Social Security payments regardless of anything else that is in a deal. The deficit problem should be fixed by asking millionaires and billionaires to pay their fair share and by jobs plans that put America back on a path of sustained economic growth. And we have no business reducing access to health care for everyday people so that CEO’s can fly around in their corporate jets, oil companies can keep their tax breaks, or Wall Street hot shots — who we all bailed out just three years ago — can pack in their huge bonuses.
Even if a Super Committee proposal includes increases in revenue to the government from millionaires and billionaires, that is not reason that normal people — whose real incomes have dropped over the last decade — should also be called upon to “share in the sacrifice.”
The problem isn’t that everyday Americans are gorging themselves on excesses that “America can’t afford.” The problem is that Wall Street, the financial sector and the 1% have gobbled up all of the increases in economic growth that the country has produced over the last two decades.
That has meant that the standard of living for normal people has been stagnant. But just as problematic, it has lead to a stagnant economic growth. Since the incomes of everyday people haven’t increased at the same rate as increased worker productivity, there simply haven’t been enough new customers to buy the new products and services that American businesses produce. That is the formula for recession and depression. And that’s just what happened.
American corporations are sitting on two trillion dollars of cash. The reason they aren’t hiring has nothing to do with the need for more tax breaks. What stops them isn’t lack of “confidence,” it’s a lack of customers.
For decades the International Monetary Fund (IMF) has preached the need for fiscal constraint and austerity. According to the Washington Post, now even the IMF is warning that, “austerity may trigger a new recession, and is urging countries to look for ways to boost growth.
If you want to lay a foundation for long-term economic growth in America, the last thing you would do is reduce the income going to ordinary Americans — even over the long run. That’s not the problem — just the opposite. We do not need ordinary people to “share in the sacrifice.” We need policies that will increase the share of income going to ordinary people and reduce the exploding inequality between the 99% and the 1%.
Any deal in the Super Committee will almost certainly do just the opposite.
2.). The worst effects of sequestration could be solved without a “grand bargain”. The one big downside of a failure of the Super-Committee to act would be the level of discretionary spending cuts that would be required through the resulting sequestration. This is particularly true of cuts in education funding.
The budget deal that was struck in order to prevent Republicans from plunging America into default last summer requires an additional $1.2 trillion reduction in the deficit over the next ten years. If the Super Committee fails to agree on the distribution of these cuts, they will automatically be spread over defense and non-defense segments of the budget beginning in 2013. But there would be no cuts in Social Security, Medicare or Medicaid.
Congress would have the ability to adjust these sequestration requirements between now and 2013, regardless. But the “fast track” authority that would require up or down votes on a proposal from the “Super Committee” would expire if the Committee cannot reach agreement by November 23rd.
The best solution to the problem of big cuts in discretionary spending would be to put together a smaller deal to raise some revenue and reduce cuts in discretionary and – if necessary — military spending — after the mandate of the Super Committee has expired.
The Congress will have a year to help solve this problem, and the pressure to ameliorate some of the cuts in military spending that have so far proved ineffective at forcing Republicans to consider big revenue increase, may be more persuasive when it comes to smaller increases as the actual date of sequestration (2013) draws near.
Of course it’s possible that the Super Committee itself could come with a small-bore deal of this sort, simply to avoid the full force of sequestration. But that would be very different than a $1.2 trillion dollar package that includes cuts in Social Security, Medicare and Medicaid. Progressives should avoid cuts to these programs at all costs, because any cuts that sliced Social Security, Medicare or Medicaid benefits would require changes in the structure of the programs themselves that would last forever. Cuts in discretionary spending — as bad as they might be — are one-time events and do not fundamentally change the structure of the American social contract.
3). There is no reason for Congress to fear that its failure to act on a “Super Committee” agreement will have massive adverse consequences on “market confidence,” since the level of the deficit will not be affected. That has already been set — with a mandate for a $1.2 trillion cut. The Wall Street gang and the ratings agencies might sputter something about government dysfunction for a day or two. But the fundamentals will not be affected, since the level of government borrowing won’t be affected by whether or not there is a deal.
It’s also worth noting that even after Standard and Poor’s downgraded the U.S. debt because of the process leading up to the debt ceiling deal, it had no effect on the interest rates the government is paying for bonds. In fact those interest rates dropped to record lows. U.S. government debt remains the safest investment in the world, no matter what S&P did, and the market reflected that indisputable fact.
In other words then, Congress does not have its back against the wall like it did during the debt ceiling “hostage” crisis. When it came to the debt-ceiling deadline, failure was not an option. In the case of the “Super Committee” failure to come to an agreement is a very real option — in fact, it’s the best option.
There are some in Congress — most notably in the Senate — who truly believe that what the country needs is a “grand bargain” that cuts the deficit by making ordinary people “share in the sacrifice” even if millionaires and billionaires are asked to share some as well.
Hopefully those who are working for such bargain will be thwarted by two important political realities.
First, that cuts in Social Security, Medicare and Medicaid are politically toxic. People get really angry when you take away something they have earned.
Second, the Republican’s stubborn unwillingness to give an ounce of new revenue from the pockets of millionaires and billionaires – who, after all, are the true core constituency of the Republican Party.
This time a little “gridlock” may be a good thing.
Sign Me Up: Why I Support “The Ronald Reagan Tax Reform Act of 2011”
Ten years ago today, the wealthiest Americans caught a multi-billion dollar break from their benefactor, then-president George W. Bush. In the decade since, through two wars, natural disasters, a plummeting economy and a soaring debt, the wealthiest Americans have gotten to keep those Bush tax cuts. Happy birthday, everybody!
As the Republican Party now lines itself up behind Rep. Paul Ryan on his mission to cut the resulting deficit on the backs of working people and the elderly, I find myself surprisingly and strangely nostalgic for another GOP hero, whose legacy, at least when it comes to taxes, has become woefully misunderstood. Can it be that I find myself nostalgic for Ronald Reagan?!
Of course, I’m not alone in my nostalgia. I’m joined by the entire Republican leadership in this, but I think our reasons may be quite a bit different. In the spirit of unity, I’d like to suggest to Republicans in Congress that they look closely at the record of their favorite 20th century hero and adopt yet another policy named after the Gipper. I’m no fan of much of President Reagan’s legacy, but in a new spirit of bipartisanship, and historical accuracy, I’d like to present Republicans in Congress with an idea: the Ronald Reagan Tax Reform Act of 2011.
A key element of the Reagan lore believed by today’s GOP is that Reagan’s embrace of “trickle-down economics” is what caused any and all economic growth since the 1980s. In fact, after Reagan implemented his initial tax-slashing plan in 1981, the federal budget deficit started to rapidly balloon. Reagan and his economic advisers were forced to scramble and raised corporate taxes to calm the deficit expansion and stop the economy from spiraling downward. Between 1982 and 1984, Reagan implemented four tax hikes. In 1986, his Tax Reform Act imposed the largest corporate tax increase in U.S. history. The GDP growth and higher tax revenues enjoyed in the later years of the Reagan presidency were in part because of his willingness to compromise on his early supply-side idolatry.
The corporate tax increases that Reagan implemented — under the more palatable guise of “tax reform” — bear another lesson for Republicans. The vast majority of the current Republican Congress has signed on to a pledge peddled by anti-tax purist Grover Norquist, which beholds them to not raise any income taxes by any amount under any circumstances, or to bring in new revenue by closing loopholes. This pledge, which Rep. Ryan’s budget loyally adheres to, in effect freezes tax policy in time — preserving not only Bush’s massive and supposedly temporary tax cuts for the wealthiest Americans, but also a vast mishmash of tax breaks and loopholes for specific industries won by well-funded lobbyists.
The problem has become so great that many giant American corporations have become so adept at exploiting loopholes in the tax code that they paid no federal income taxes at all last year — if Republicans in Congress follow their pledge to Norquist, they won’t be able to close a single one of the loopholes that are allowing corporations to avoid paying their fair share.
Even Reagan recognized the difference between just plain raising taxes and simplifying the tax code to cut out loopholes that subsidize corporations. In 1984, he arranged to bring in $50 billion over three years, mainly by closing these loopholes. His 1986 reform act not only included $120 billion in tax hikes for corporations over five years, it also closed $300 billion worth of corporate loopholes.
These kinds of tax simplification solutions are available for Congress if they want them. As I wrote in April, nixing Bush’s tax cut’s for the wealthiest Americans would help the country cut roughly $65 billion off the deficit in this year alone. Closing loopholes that allow corporations to shelter their income in foreign banks would bring in $6.9 billion. Eliminating the massive tax breaks now enjoyed by oil and gas companies would yield $2.6 billion to help pay the nation’s bills.
But before Republicans in Congress change their math, they have to change their rhetoric — and embrace the reality of the economic situation they face and the one that they’d like to think they’re copying. In 1986, during the signing ceremony for the Tax Reform Act, Reagan explained that “vanishing loopholes and a minimum tax will mean that everybody and every corporation pay their fair share.”
It’s time for the GOP to take a page from their hero’s playbook. If they do so, they might be able to find some allies that they never thought possible. It’s time for “everybody and every corporation to pay their fair share.” We can all get along. Sign me up for “The Reagan Tax Reform Act of 2011.”
By: Michael B. Keegan, President: People For the American Way, Published in HuffPost, August 7, 2011
Taxing The Poor: The Only Tax Increase Republicans Support
Throughout the debate about raising the federal debt ceiling, Republicans have denied deal after deal because Democrats insist on adding new revenues to trillions of dollars in spending cuts. Republicans have opposed repealing oil and gas subsidies, removing a tax loophole for corporate jet owners, letting the Bush tax cuts expire, and all other forms of revenue Democrats have suggested. Raising taxes in a weak economy, they argue, is unthinkable — even if conservative patriarch Ronald Reagan did just that.
But there is one tax increase some Republicans seem to favor: raising taxes on the working poor, senior citizens, and other low-income Americans.
While they fight the expiration of the budget-busting Bush tax cuts, Republicans have continually cited a report that shows that 51 percent of Americans don’t pay income taxes, even admitting that middle- and lower-class Americans need to shoulder a larger burden in deficit reduction efforts. Here is a sample of Republicans who have made that argument:
Sen. Orrin Hatch
(R-UT): In a May 5 appearance on MSNBC, Hatch said, “The place where you’ve got to get revenues has to come from the middle class,” saying the poor needed to understand “that there’s a civic duty on the part of every one of us to help this government to, uh, to be better.” On the Senate floor July 7, Hatch said the poor “need to share some of the responsibility” for deficit reduction.
Sen. John Cornyn
(R-TX): Cornyn also cited the report on the Senate floor July 7, when he said Congress needed to address tax reform to make the system “flatter, fairer, and simpler.” He then cited the report, saying, “51 percent — that is — a majority of American households — paid no income tax in 2009. Zero. Zip. Nada.”
Sen. Dan Coats
(R-IN): Coats echoed the talking point last weekend, saying “everyone needs to have some skin in the game.” He added: “I realize that some with low incomes and not much money are not paying much in taxes. Nonetheless, we all have a stake in this country and what needs to be done. I think it’s important that this burden not just fall on 50 percent of the people but falls on all of us in some form.”
House Majority Leader Eric Cantor
(R-VA): Cantor was among the first Republicans to begin hitting this particular talking point, doing so in April on CNBC’s Squawk Box. “We also have a situation in this country where you’re nearing 50 percent of people who don’t even pay income taxes,” he said.
Republicans, of course, ignore why most of the 51 percent do not pay income taxes and the myriad ways in which they are subject to other forms of taxation. The majority who do not pay federal income taxes simply do not make enough money to qualify for even the lowest tax bracket. But they do contribute through payroll, state, and sales taxes. Less than a quarter of Americans don’t contribute to federal tax receipts, and the majority of those are students, the elderly, or the unemployed.
Meanwhile, the richest Americans are paying less than they were a generation ago, leaving the United States with one of the largest income gaps in the industrialized world.
By: Travis Waldron, Think Progress, July 25, 2011
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