Posts Tagged ‘Heritage Foundation’

Medicare Times Are a Changing

Monday, January 16th, 2012

Baby boomers may not like it — and whoever wins the White House this year — but the Medicare that our parents knew and love is destined to change. And it’ll be like it or lump it.

With more than 1.5 million baby boomers enrolling in Medicare every year, the program’s future is one of the most crucial economic issues for anyone who currently is 50 or older. Healthcare costs are the most erratic part of retirement expenses, and Medicare remains a great deal for retirees, who often get benefits worth significantly more than the payroll taxes they paid while working.  “People would like to have what they used to have.  What they don’t seem to understand is that it’s already changed,” said Gail Wilensky, a former Medicare administrator. “Medicare as we have known it is not part of our future.”

Consider these numbers.  Medicare’s giant trust fund for inpatient care is expected to run out of money in 2024.  When that happens, the program will collect only enough payroll taxes to pay 90 percent of benefits.  Additionally, researchers estimate that as much as one-fifth and even two-thirds of the more than $500 billion that Medicare now spends every year is spent on treatments and procedures of little or no benefit to patients.

Representative Paul Ryan (R-WI), chairman of the House Finance Committee, is leading the charge on changing Medicare.  Ryan’s current proposals will not impact people now 55 or older would not have to make any changes.  But how would it work?  Would it save taxpayers’ dollars?  Would it shift costs to retirees, who are least able to afford it?   Will Congress ultimately end traditional Medicare?  These questions are still waiting for answers.  “I’m not sure anybody has come up with a formula on this that makes people comfortable,” said health economist Marilyn Moon, who formerly served as a trustee overseeing Medicare finances.

The White House’s preference is to keep the existing structure of Medicare while “twisting the dials” to control spending, said Medicare trustee, economist Robert Reischauer of the Urban Institute think tank.

Ryan’s original approach would have put 100 percent of future retirees into private insurance.  His most recent plan, written with Senator Ron Wyden (D-OR), would keep traditional Medicare as an option, competing with private plans.

Writing for AARP, Ricardo Alonzo Zaldiver says that, “This could mean more Medicare recipients joining private insurance plans (currently, only about 25 percent of Medicare recipients are in private ‘Medicare Advantage” plans, while the other three-quarters participate in the traditional, government-run Medicare program).  A new voucher-for-private-Medicare plan would be available to anyone currently under 55.

“It could also mean keeping the existing Medicare structure but making certain tweaks to control spending.  Under President Obama’s healthcare overhaul, the Independent Payment Advisory Board could force Medicare cuts to service providers if costs rise above certain levels and Congress fails to act.  Obama has said he’ll veto any plan to cut Medicare benefits without raising taxes on the wealthy.  During failed budget negotiations last summer, he indicated a willingness to gradually raise the Medicare eligibility age to 67, revamp co-payments and deductibles in ways that would raise costs for retirees, and cut payments to drug makers.  ‘For the 76 million baby boomers signing up over the next couple of decades, it will pay to be watching.’”  President Obama has promised that he will veto any plan to cut Medicare benefits without raising taxes on the wealthy.

The Chicago Sun-Times offers this sage advice: “Fix Medicare, ignore scare talk.”  According to writer Steve Huntley, “I’ve contributed to Medicare every year of its existence. Yet, it’s a myth that seniors have paid the costs of their Medicare services, as demonstrated by the research of economists Eugene Steuerle and Stephanie Rennane of the Urban Institute think tank.  Their study showed that a two-income couple earning $89,000 a year would pay $114,000 in Medicare taxes during their careers but could expect to receive $355,000 in medical care in retirement. They could get prescriptions, doctor visits and hospital services valued at three times their contribution to Medicare.

“Medicare combined with Medicaid and Social Security add up to an entitlement time bomb —  they’ll consume all tax revenues by 2052, according to a Heritage Foundation analysis —  for the people who’ll be stuck with the bill: working Americans.  In 1950, there were 16 taxpaying workers for each retiree; by the time the baby boomers all retire, there will be two workers for each retiree. Entitlement reform has to happen.”

Nine Million Americans Lost Healthcare Coverage During the Recession

Monday, April 4th, 2011

The financial crisis not only robbed nine million Americans of their jobs – but also their healthcare insurance. According to a new study by The Commonwealth Fund, only 25 percent of Americans who lost employer-sponsored healthcare coverage succeeded at finding another source.  As a result, an estimated 52 million Americans did not have healthcare coverage in 2010.  Even though the federal government provides a subsidy, just 14 percent of people who lost their jobs continued their coverage through COBRA.

According to The Commonwealth Fund Biennial Health Insurance Survey of 2010, “Using data from The Commonwealth Biennial Health Insurance Survey of 2010 and prior years, this report examines the effect of the recession on the health insurance coverage of adults between the ages of 19 and 64 and the implications for both their finances and their access to healthcare.  The survey of 3,033 adults, conducted by Princeton Survey Research Associates International from July 2010 to November 2010, finds that in the last two years a majority of men and women who lost a job that had health benefits became uninsured.  Adults who sought coverage on the individual insurance market over the past three years struggled to find plans they could afford and many were charged higher premiums, had a health condition excluded from their coverage, or were denied coverage altogether because of a pre-existing condition.  Meanwhile, Americans with health insurance had higher deductibles and consequently greater exposure to medical costs.  And millions were struggling to pay medical bills, facing cost-related barriers to getting the care they need, or skipping or delaying needed care, including prescription medications, because of the cost.”

Just 50 percent of adults aged 64 or less are current with preventive care.  Fully 49 million employed Americans spent 10 percent or more of their yearly income on out-of-pocket costs and insurance premiums, a sharp increase from the 31 million reported in 2001.  Once the Patient Protection and Affordable Care Act (ACA) goes into full effect in 2014, the situation is likely to improve dramatically.  “These reforms have enormous potential to begin solving the problems identified in this report,” said Sara Collins, vice president of The Commonwealth Fund, a private foundation that promotes a high performing healthcare system that achieves better access, improved quality, and greater efficiency, particularly for society’s most vulnerable, including low-income people, the uninsured, minority Americans, children, and the elderly.

“The report tells the story of the continuing deterioration of healthcare accessibility, efficiency, safety and affordability over the past decade,” said The Commonwealth Fund president Karen Davis. “All this despite the fact that the United States spends more than any other country on healthcare.  Most recently it has failed the millions of Americans who lost their jobs during the recession and lost health benefits as well, leaving them with no place to turn for affordable healthcare coverage.  The silver lining is that the Patient Protection and Affordable Care Act has already begun to bring relief to families,” Davis said.  “Once the new law is fully implemented, we can be confident that no future recession will have the power to strip so many Americans of their health security.”

Of those people who attempted to buy an individual plan during the study’s timeframe — 19 million individuals – or 71 percent found it difficult or impossible to locate a plan they could afford and met their needs, were denied coverage or charged extra because of a pre-existing medical condition.  Adults with family incomes of less than $22,050 for a family of four were hardest hit with 54 percent having no healthcare insurance.  An additional 41 percent of families with incomes of between $22,050 and $44,100 had no coverage.  Of higher-income families, just 13 percent lacked healthcare coverage in 2010.

Conservative groups such as the Heritage Foundation are critical of the healthcare reform law.  The Washington, D.C.-based think tank wants changes made to the healthcare system to make it less reliant on government and to have individuals “own and control their own healthcare policies.”  Additionally, Heritage believes that the healthcare law will increase government spending.  “Of course there’s some people who will benefit from the law, but just focusing on individuals with benefits is misleading,” said Brian Blase, a policy analyst in health studies.  “You have to look at the law in its totality.”