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President Obama is in the midst of a so-called 'liberal pile on' (by that meaning his base taking him to task for a cruel, pointless and politically stupid manoever of releasing a budget proposal that incorporates a social security benefit cut) and rightly so. However while I agree completely with the reason for said pile on - Chained CPI is an unconscionable benefit cut to the most vulnerable people in the social security population - I think another part of his proposal, that to 'means test' medicare, that is, to limit the benefits medicare pays by income and financial assests, is even worse and is more pernicious in that it seems to reflect a lack of understanding how medicare works, as well as an undermining of the whole idea.

Come below as MichiganChet explains it all to you

First, as most people who are familiar with medicare can tell you, the program already imposes modest means testing: Part B of medicare, which pays for physician services and related medical needs such as physical therapy, preventive care and so forth is in part financed by a monthly premium that increases for those who have incomes greater than 85,000 per year. Part D works in similar fashion, although since the administration of this was farmed out to private insurance companies it is both more complex and more costly than if the federal government would have administered the program itself. What is important to remember is that medicare pays for only about 48% of the average beneficiarie's health care expenses (According to the Kaiser Family Foundation, whose website, www.kff.org is a very useful source of information when considering health policy), and that healthcare costs, although not rising as fast as they once were, have significantly outpaced inflation over the past 20 years. Thus even the moderately weathy elderly - a distinct minority - face substantial healthcare costs over their lifetime

Medicare was created with a social insurance model in mind; The idea that everyone contributes so that everyone is vested in a system that pays out according to need, which in terms of health care is something that most people will eventually use. There is no way in which medicare would be viable if it were financed in the usual way private insurance does (the ACA aside) which is to charge policy holders premiums that reflect the cost of insuring them; this would render health care insurance for the elderly unaffordable. Means testing in part undoes this social contract that everyone pays in a certain percentage of income in exchange for defined benefits; it decreases the stake that a wealthy beneficiary would have in the overall system. Moreover (and this is a conservative idea) it acts as a disincentive for work and saving, a point that even the right wingers acknowledge: This guy who is writing for the conservative 'National Affairs" says

The right, meanwhile, has tended to oppose means tests for economic reasons. Chief among them is that reducing a person's government benefits as his outside income increases creates a disincentive to work and save. In other words, means tests can produce implicit taxes every bit as harmful as explicit taxes. And since we want individuals to work and save more to provide for themselves in retirement (let alone to sustain the American economy), it would be both counterproductive and unfair to penalize them for doing exactly that
Moreover means testing could cause the wealthy to drop out of medicare, which would be a problem, as they are generally healthier than their poorer couterparts, and thus implicitly subsidize the program for the poor. Check out this table that, shamelessly  lifted from one of my teaching health poolicy textbooks, makes this point

 photo cff889cf-6618-4a93-a1c1-9b1363590c5d.jpg

There is other data, a plethora, really that supports this idea that rising income, at least in this country, equals better health, for a variety of reasons. If you were running an insurance plan, would you want to piss off the policy holders who cost you less?

Moreover, let us consider the alternative minimum tax. This was initially designed for wealthy people to get them to pay some income tax, back in the days before tax reform meant there was an awful lot of loopholes that could be gamed so that you essentially paid no income tax. Problem was this was not indexed for inflation, so that ultimately a high percentage of taxpaying households, not all of them particularly weathy, wound up paying the tax and thus seeing an increase in tax rates. I should not that I am one of them, and it kinda pisses me off, plus the yearly 'fix' makes it harder to plan. Who doubts that this means testing would not be inflation indexed, meaning people of modest means wouldn't be progressively caught into it as well? 85,000 in the next few years may not look like a huge amount of money, especially if one lives in a high cost of living area.

What also fries me about this idea - which probably wouldn't even save that much money - is that there are other ways to decrease medicare costs without hurting its beneficiaries. I have already mentioned that part D was farmed out to private insurance; well the ACA cut - and there could be further cuts to - part C subsidies which basically pay HMOs to provide seniors with medical care that the federal government could pay for itself with 14% expense. Further, Medicare doesn't negotiate drug prices with the pharmaceutical firms or devices with the device manufacturers, another significant cost savings, which probably wouldn't insulate the President from the invariable political attacks of 'He cut your medicare!', but might actually make some economic sense. And of course any comparative research which might actually really bring down costs by showing what medical treatment is and is not effective seems to be off the table at the moment; even the relatively toothless Independat Payment Advisory Board is savaged politically every time it comes up in congress. Why toothless? again, let me quote the Kaiser Family Foundation, this time from their blurb on the health care reform:

The Board is prohibited from submitting proposals that would ration care, increase taxes, change Medicare
benefits or eligibility, increase beneficiary premiums and cost-sharing requirements, or reduce low-income
subsidies under Part D. Prior to 2019, the Board is also prohibited from recommending changes in payments
to providers and suppliers that are scheduled to receive a reduction in their payment updates in excess of a
reduction due to productivity adjustments, as specified in the health reform law.1 The law establishes specific
rules and deadlines for Congressional consideration of the Board’s recommendations, and specific timelines and
procedures for Congressional action on alternative proposals to achieve equivalent savings
And we are instead going to 'means test' individuals?

I guess I could do worse than quote Lynn Stuart Parramore alternet's highly accomplished senior editor, who wrote a nice piece in December exploding this means testing meme

The United States is a rich country, and a dignified retirement for our elderly should be one of our proudest achievements. And yet Social Security and Medicare are under near-constant attack. Pensions are vanishing, and despite 401(k)s and other voluntary retirement plans, workers still can’t save nearly enough to retire securely...The financial stability of Americans is further shaken by rising medical costs. A single-payer system would be the most sensible way to address this crisis, and Medicare is the closest thing we have now to single-payer. Means-testing would harm seniors who already have paltry incomes. Proposals to increase premiums for 25 percent of beneficiaries, for example, could hit American seniors who make as little as $47,000, according to the nonpartisan Kaiser Family Foundation
.

What we really have here, in the final analysis is a refashioning of this chained CPI- this idea that the deficit is so dastardly, that balancing the government's books in the short term takes such a high priority, that we kick those who spent a lifetime working and paying into a benefit program that has been such a social success in the American 20th century. For modest cost savings, so we can reach some sort of 'bargain' with John fu**ing Boehner.

Please. We think over here.

Originally posted to MichiganChet on Fri Apr 05, 2013 at 06:19 PM PDT.

Also republished by Community Spotlight.

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Comment Preferences

  •  The SS CPI (18+ / 0-)

    should be adjusted upward for seniors.

    healthcare costs, although not rising as fast as they once were, have significantly outpaced inflation over the past 20 years.
  •  Excellent dairy Chet, TnR (14+ / 0-)

    Maybe you would like to join the "Grand Bargain SS, Medicare Medicaid blogathon" next week.

    This dairy republished would do nicely.

    Let me know-

    ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Fri Apr 05, 2013 at 07:22:53 PM PDT

    •  Absolutely (8+ / 0-)

      Give me details.

      I have been wanting to do this for awhile

      An empty head is not really empty; it is stuffed with rubbish. Hence the difficulty of forcing anything into an empty head. -- Eric Hoffer

      by MichiganChet on Fri Apr 05, 2013 at 07:47:08 PM PDT

      [ Parent ]

      •  SSD invite on the way (3+ / 0-)
        Recommended by:
        commonmass, ladybug53, splashoil

        We're organizing thru the DK group Social Security Defenders, so I will need you as a member so you can queue up a dairy to the group.

        DO you prefer kos mail or email?

        If email

        rdanafox at the yahoo

        ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Fri Apr 05, 2013 at 08:02:27 PM PDT

        [ Parent ]

      •  Goal is push back on program cuts (7+ / 0-)

        Chained CPI
        400 billion in cuts to healthcare
        Medicare means testing

        AARP, Moveon, Crooks and Liars, Thinkprogress and many name individuals are all making the same push.

        ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Fri Apr 05, 2013 at 08:07:47 PM PDT

        [ Parent ]

    •  Does anyone know WHO in the Admin initiated these (2+ / 0-)
      Recommended by:
      wader, Dburn

      degeneracies? I mean names of individuals in the "policy place," not just "Obama," that convenient and obscuring personification. Sending petitions and emails and phone calls to "the White House" feels a little good, but you know the people behind the scenes just snigger at expressions of impotent anger trending toward fury that they know will eventually become resignation and silence.

      Anyone? I would not personally know where to start, but you have to wonder if these folks are just ignorant of realities, missing any of the empathy bones that "liberals" are burdened with, or what. Maybe it's just a kind of "Milgram experiment"? http://www.youtube.com/... but see the comforting reprise, http://www.scientificamerican.com/...

      Who are the actors, the people with their fingers on the switches? who are the test subjects? We KNOW who the ones getting the 450-volt electric shocks are...

      Who are the people who write the memos and "white papers" and can they be contacted? Names and addresses and phone numbers of individuals ("work" locations only, of course, we would not want to be accused of some violation of the PATRIOT Act or whatever), and their job titles and affiliations and histories? How do we reach them?

      "Is that all there is?" Peggy Lee.

      by jm214 on Sat Apr 06, 2013 at 06:41:29 AM PDT

      [ Parent ]

  •  400 billion in health program cuts..... W T F (5+ / 0-)
    Recommended by:
    commonmass, Chi, Sunspots, allenjo, Flying Goat

    ...... Social Security blogathon March 25th thru March 29th. #HandsOffmySS FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Fri Apr 05, 2013 at 07:23:57 PM PDT

    •  So you oppose cutting payments to (1+ / 0-)
      Recommended by:
      gramofsam1

      drug companies?

      You can't scare me, I'm sticking to the Union - Woody Guthrie

      by sewaneepat on Sat Apr 06, 2013 at 06:43:11 AM PDT

      [ Parent ]

      •  Why not. We cut pay to doctors, significantly (3+ / 0-)
        Recommended by:
        Chi, Calamity Jean, Calfacon

        lowering the quality of care for recipients, both in Medicare and in Tricare [see military health care coverage]. So why not.

      •  Depends what "cutting payments" means... (0+ / 0-)

        Paying less for the same thing is very different than making seniors do without.

        •  There is no proposal for making seniors do without (1+ / 0-)
          Recommended by:
          Flying Goat

          the proposal is to cut payment to drug companies - which is what most people here have said - over and over- they want.  Apparently until Obama proposes it. Then, some people here, just like Republicans, apparently decide that is not a good idea. UN-freaking-believable.

          Do you think Medicare pays pharmaceutical companies too much or not?

          You can't scare me, I'm sticking to the Union - Woody Guthrie

          by sewaneepat on Sat Apr 06, 2013 at 07:49:58 PM PDT

          [ Parent ]

          •  I would assume so... (1+ / 0-)
            Recommended by:
            sewaneepat

            Though that's based on my general opinion of the pharmaceutical industry rather than any actual data.

            I see more talk in this particular diary (Including the comments) on the topic of cutting Medicare benefits for the wealthy than reducing how much is paid for the same set of pharmaceuticals.

            •  Medicare benefits for the wealthy are not being (1+ / 0-)
              Recommended by:
              Flying Goat

              cut either. The proposal is to raise their premiums, not reduce their benefits.

              For some reason, some people do not want to look at all the proposals but rather look at parts of the proposals,  then twist what they do look at onto something different from what it is.

              Medicare pays more to drug companies than medicaid or the
              VA pays. That doesn't even take into account what people pay in
              Canada or other countries - which is less than we pay here.

              You can't scare me, I'm sticking to the Union - Woody Guthrie

              by sewaneepat on Sat Apr 06, 2013 at 08:04:01 PM PDT

              [ Parent ]

  •  I actually don't mind wealthier seniors paying mor (5+ / 0-)

    e for Medicare, doesn't bother me one bit and it's an uncruel way to help Medicare solvency.

    •  Couples making $250,000 a year currently pay (1+ / 0-)
      Recommended by:
      Denver11

      a surtax of .9 percent in addition to the regular Medicare tax.

      Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well-warmed, and well-fed. --Herman Melville

      by ZedMont on Sat Apr 06, 2013 at 11:41:28 AM PDT

      [ Parent ]

    •  The issue is that it makes it easier to cut it (2+ / 0-)
      Recommended by:
      MichiganChet, HarpboyAK

      in the future with arguments about the wealthy not benefiting from it, but paying into it.  I think universal pay in, universal benefit both makes it easier to keep funded, and makes it easier to turn into universal coverage.

    •  But they already do. Why go down further (0+ / 0-)

      on that route which has the real potential to erode the system? Especially if you are a Democrat. Let the Repubs propose their own damn cuts. That's something they are good at. Why dont we Dems actually defend our programs as crafted, for once

      An empty head is not really empty; it is stuffed with rubbish. Hence the difficulty of forcing anything into an empty head. -- Eric Hoffer

      by MichiganChet on Sat Apr 06, 2013 at 06:45:22 PM PDT

      [ Parent ]

    •  The problem is that I have been "means tested" (0+ / 0-)

      from the time the cap was removed from the Medicare portion of the pay roll tax.  As my income rises (or falls), so does my Medicare tax - regardless of my health status.  So every paycheck I receive I am "means tested."  Did I make more?  Then I paid more.  Did I make less? Then I paid less.

      And as the diarist noted, for better or worse, health status tends to correlate with socioeconomic status, so from an actuarial standpoint I am already paying a double surcharge - more based on income despite likely having less medical expenses in old age.

      And now there is talk of triple dipping, by again charging more to those very seniors that have been paying more into the system all along.

      Better that Medicare pay roll taxes be capped and FICA taxes be uncapped (with another "bend point" that reduces the payout ratio for higher incomes.

  •  Conversion from Insurance to Welfare (18+ / 0-)

    Means testing coverts Medicare from an insurance program into a welfare program.  Neither SS or Medicare are actually entitlement programs in the sense that use the word as a substitute for welfare.  They an insurance program, a contract if you will and you are entitled to the benefits you paid for not because you meet some arbitrary list of qualifications.  If you are old enough you may remember the hit Burger King commercial "Where's the beef?"  In this case I paid into FICA for 40 years and as a PT worker continue to do so.  So, "Where's the money" or more pointedly "where's MY money?"  Where are the benefits I bought and paid for?  

    Ya know, politics really does suck doesn't it.  

    A bad idea isn't responsible for those who believe it. ---Stephen Cannell

    by YellerDog on Fri Apr 05, 2013 at 09:50:19 PM PDT

  •  See Paul Krugman (17+ / 0-)

    The Means-Testing Mirage

    There is very little financial benefit to means-testing, but if you get a segment of the population to opt-out, overall support of the program drops (the conversion to a welfare program YellerDog mentions).  There is a segment that would be willing to give up their Medicare benefits in order to destroy Medicare as we know it.

    Obama made a huge mistake proposing any change to Medicare.  He should have heeded Tea Partiers - keep government off my Medicare!

    We also need to seriously revisit Medicare cost projections.  The curve is already bending, and barring some breakthroughs, will continue to bend downward.  

  •  Obama is a disaster (6+ / 0-)

    His second term is over before it ever got started.  He has now done permanent damage to the Democratic Party brand.

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Sat Apr 06, 2013 at 04:50:07 AM PDT

  •  This isn't new (8+ / 0-)

    Medicare participants already pay higher premiums for Part B and Part D (drugs) if they're high-income. I know my mother does, and she doesn't mind because she feels people with more should give back.
    According to Social Security, only 5% of participants pay the extra. It's a sliding scale that begins with incomes of $85,000 (single) / $170,000 (MFJ).

    •  Exactly. (5+ / 0-)

      Higher income people ($85,000 for an individual or $170,000 for a couple) pay $147 per month for part B as opposed to $105. This goes up on a marginal basis to $335 for individuals making above $214,000 or couples making over $428,000. They pay from $11.60 a month to $66.60 a month more for Part D.

      The proposal is for the threshold to not be indexed for inflation until it covers 25% of beneficiaries. This means that 75% of beneficiaries would have the normal premium. For a group that generally favors the upper income people paying more, it is strange to me that this proposal has drawn so much ire.

      As for the wealthy opting out of Medicare, where exactly do you think a person over the age of 65 - no matter how healthy they are - could find an insurance plan for between $147 and $335 a month? And if they did, the premium would go up as they age - which is not true for Medicare - 65 year olds pay the same as 90 year olds.

      Since Medicare has been means tested in this way since 2005, with no ill effects, I do not fear that this will make Medicare an unpopular program. Part D is unpopular because it is a POS, not because it is means-tested, IMO.

      Another part of the Medicare "cuts" according to the NYT article yesterday is cutting payments to pharmaceutical companies. Yet I see people here complaining that Obama should negotiate with drug companies instead of what he has proposed. Well, that seems to be what he has proposed.

      You can't scare me, I'm sticking to the Union - Woody Guthrie

      by sewaneepat on Sat Apr 06, 2013 at 06:40:49 AM PDT

      [ Parent ]

      •  It draws fire because of the ideology (2+ / 0-)
        Recommended by:
        Flying Goat, MichiganChet

        I believe in getting the revenue from taxes so I would have let the Bush tax cuts expire altogether or at least on those with income above, oh, why not $85K since you appear to believe someone with $85K has plenty of discretionary income.

        Instead we're making the Medicare program less desirable for people with higher incomes which will undermine their support for the programs as they see that they are likely to get decreasing benefits from the program as they are increasingly hit with higher premiums.

        What we're moving to over time is the Republican agenda.  We'll be moving to vouchers.  Democrats will just call the something else like superlative coupons or whatever.  

        Obama has convinced me that the Democratic Party has no long term commitment to either Social Security or Medicare.

        •  Yes, I think a single person with an income of (1+ / 0-)
          Recommended by:
          MichiganChet

          $85,000 or a couple with a $170,000 income is fairly well off. They are, after all, in the top 5% of seniors and the top 10% of all Americans.

          They are not getting "decreasing benefits." They get the same benefits they always have and the same benefits everyone else gets. If you think they can get cheaper insurance, please tell me where. Their premiums are still subsidized 65% as opposed to the 75% the rest of us get.

          As for getting it from taxes, these people have paid a lower percentage of their income in Medicare taxes than the rest of the American people so I think it is perfectly fair that they are paying higher premiums.

          You can't scare me, I'm sticking to the Union - Woody Guthrie

          by sewaneepat on Sat Apr 06, 2013 at 02:48:14 PM PDT

          [ Parent ]

          •  Hmm. I hate to sound like a tea bagger (0+ / 0-)

            But you couple with 170,000 may not in fact be well off - not because they live in Palo Alto, or have to send their kids to private schools, or their neighbor makes a million or any of those other idiotic arguments. It is because they may face substantial health care expenses. .  .and let me trot out another statistic in that Medicare already tends to cover only half of seniors health care expenses when everything is thrown in. We know how damn expensive healthcare has become; in fact that is why we are all so excised - justifiably so - over this chained CPI issue.

            If we extended the medicare tax to all capital gains, then the wealthy would have paid exactly the same percentage, if not more, of their income into medicare as the middle class. I'm cool with that, so then they can get the same darned benefit as everyone else.

            An empty head is not really empty; it is stuffed with rubbish. Hence the difficulty of forcing anything into an empty head. -- Eric Hoffer

            by MichiganChet on Sat Apr 06, 2013 at 06:43:09 PM PDT

            [ Parent ]

            •  A couple with $170,000 income on Medicare (1+ / 0-)
              Recommended by:
              MichiganChet

              has presumably bought a Supplement Plan F that pays all deductibles and copays. They also have a Part D, which even thought it is a POS for the average person does have a maximum out of pocket expense which (without looking it up) is less than $5000. They can afford an extra $47 a month each.

              As for worrying about these people in regard to the chained CPI, a couple with $170,000 income is hardly worried about losing 0.25% of the annual increase in their social security benefit (the total of which is a small part of their income.) There are reasons to be concerned about the chained CPI for some people but the seniors with $170,000 in income are not those people.

              If you extend the Medicare tax to all income, they might pay the same percentage as anyone else, but they certainly would not pay a larger percentage. Of course if you extended the Medicare tax to all unearned income no matter how much or how little that amount is, you would hurt a lot of middle income seniors. After all, middle income seniors live on SS and unearned income so you would be having those seniors paying much more than the extra $47 a month you want to save the rich seniors from paying.

              The people who pay the high premiums have exactly the same benefits from Medicare as anyone else on Medicare. they do not have lower benefits.

              You can't scare me, I'm sticking to the Union - Woody Guthrie

              by sewaneepat on Sat Apr 06, 2013 at 07:06:34 PM PDT

              [ Parent ]

              •  Yes; as I mentioned, those are part of the problem (0+ / 0-)

                Those medigap policies, being subsidized are on average 14% more expensive than the federal government just providing the care. They cost the ssytem, which is why the ACA wrung the cost savings out of them.

                So more broadly, why doesn't the President extend that, rather than this means testing, which if truly held to the wealthy you cite would raise only trivial sums of money at the cost of undermining the basic social contract that supports the system? Why take that risk, when real leadership would mean getting cost savings from a system that doesn't do that

                An empty head is not really empty; it is stuffed with rubbish. Hence the difficulty of forcing anything into an empty head. -- Eric Hoffer

                by MichiganChet on Sat Apr 06, 2013 at 08:05:57 PM PDT

                [ Parent ]

                •  You are confusing supplemental policies (0+ / 0-)

                  with Medicare Advantage. Medicare Advantage was Bush's attempt to privatize Medicare and is what costs 14% more than original Medicare and yes, the ACA is reducing that. but Medigap is a different thing and the government never has provided this service. The government sets the standard for what various supplementals provide, but that is all.

                  Medicare has been means tested in this way since 2003 and it has not undermined the social contract involved. Wealthy people still have their Medicare premiums subsidized, just not at quite the level the rest of us do.

                  You can't scare me, I'm sticking to the Union - Woody Guthrie

                  by sewaneepat on Sat Apr 06, 2013 at 08:18:04 PM PDT

                  [ Parent ]

                •  Just to be clear... (0+ / 0-)

                  Supplementals - Medigap policies- do not cost the government money. These premiums are not subsidized but are totally paid for by the policy holder. Premiums for Medicare Parts B and D are subsidized by the government. Also premiums for Part C which is Medicare Advantage are subsidized.

                  You can't scare me, I'm sticking to the Union - Woody Guthrie

                  by sewaneepat on Sat Apr 06, 2013 at 08:24:38 PM PDT

                  [ Parent ]

    •  Yes I know. So why screw with them further? (0+ / 0-)

      I'm not advocating for the sliding scale abolition (I do think that Medicare should be expanded to all those 55 and older, but that is the subject of another diary). But I think this is absolutely the wrong time to do this, especially in isolation

      An empty head is not really empty; it is stuffed with rubbish. Hence the difficulty of forcing anything into an empty head. -- Eric Hoffer

      by MichiganChet on Sat Apr 06, 2013 at 06:36:57 PM PDT

      [ Parent ]

  •  The President is playing a dangerous game. (8+ / 0-)

    One of these days Congress is going to accept one of his dangerous proposals on social insurance.

    That we are talking about this at all, as Democrats, is shameful.

    What is truth? -- Pontius Pilate

    by commonmass on Sat Apr 06, 2013 at 05:57:47 AM PDT

    •  I believe that's the issue - he keeps gambling (3+ / 0-)
      Recommended by:
      commonmass, Sunspots, Calamity Jean

      on the Republicans becoming more reasonable if he offers carrots. Instead, they take everything on the table and he claims victory because a deal was made + he may get a concession or two somewhere that is far less critical. It seems that once he gets in this deal creating mode, nobody can pull him back to see the larger picture that he is degrading. It keeps feeling like Clinton's second term.

      "So, please stay where you are. Don't move and don't panic. Don't take off your shoes! Jobs is on the way."

      by wader on Sat Apr 06, 2013 at 07:55:04 AM PDT

      [ Parent ]

  •  It is not a social security "benefit" and it is (10+ / 0-)

    not and entitlement, at least in the sense that the Republicans use that word.

    It is older working Americans living off of the money they put into a Government Trust fund.

    Among the rather important things Americans workers need to to is to remind pundits, bloggers, and politicians that SS and Medicare are not unearned Freebees.  And that retired workers are not welching of the government's teets.

    It is really rather important that we badger them into using non pejorative terms to refer to our access to our investment.

    It is also important the we remind everybody that money paid out of SS and Medicare create jobs and pay wages and salaries for those younger folk to pay back into SS and Medicare for their future retirements.

    Obama joins the chorus of those insulters, and that it really the most worrisome part.  If he uses the right language he can't not support SS and Medicare.
    If he acknowledged the economic benefit of replowing of wealth from SS Medicare as a self supporting act, he cannot then support lessening that cyclical flow.

    Lessening SS Medicare is in a very direct way at attack on this country's medical care.  It is a deliberate starving of the health care economy.

  •  "cause the wealthy to drop out of medicare" (8+ / 0-)

    This is ridiculous.  Once you are IN Medicare, you are on the receiving end of benefits.  The paltry premium does not cover the expenses.

    To suggest the wealthy "implicitly subsidize the program for the poor" is just wrong.

    Wealthy people dropping out of Medicare would be a boon to the system.  I don't think you've thought this one through.

    And as far as premiums go,you state there is already some moderate means testing.  So, a bit more would be so catastrophic to the system how?  Geez.. if a slight increase in premiums for wealthy beneficiaries in Medicare will keep the system afloat longer, I say why not!

    Direct government negotiating of drug prices would do a helluva more, however.  

    •  Yes, someone is going to be really upset (4+ / 0-)
      Recommended by:
      gramofsam1, NYLefty, devis1, Bon Temps

      if their premium is subsidized at 50% instead of 75%.
       Of all  the things in the world to worry about, people dropping out of Medicare is at the very bottom of the list.

      And another thing - FICA is a terribly regressive tax, the Medicare portion is slightly less regressive than the SS portion because there is no cap on wage income; however, capital gains, dividends, and interest income have not been subject to any FICA tax including the Medicare portion. This has changed slightly under the ACA in which the very wealthy pay Medicare taxes on unearned income, but the vast, vast majority of people (including the vast majority of wealthy people) do not pay any Medicare tax on their unearned income. So they have not been paying their "fair share"  or even their proportionate share in supporting the program with their taxes. It seems fair to me that they make up a little for that when they benefit.

      You can't scare me, I'm sticking to the Union - Woody Guthrie

      by sewaneepat on Sat Apr 06, 2013 at 07:30:13 AM PDT

      [ Parent ]

      •  The wealthy will have other incentives to leave (1+ / 0-)
        Recommended by:
        Bon Temps

        As providers are increasingly pressured they will increasingly stop taking Medicare patients especially in higher income cities and suburbs.   The wealthy will leave first.  Then the upper middle class will get mad and leave too.  The middle class will then turn on the poor who they will blame for leaving them without providers and with an increasingly crummy Medicare system.  

        •  Just tell me where you think someone over the age (0+ / 0-)

          of 65 will be able to get insurance and how much you think it will cost.

           Do you understand that Medicare premiums are subsidized at a 3-1 ratio. The person in the first tier of increased premiums is still subsidized at a 65% of premium. Why do you think that someone would be so upset at a $47 a month higher premium would try to find a policy that is over twice as much and whose premium will increase significantly each year with age (unlike Medicare which does not change with age.)

          You can't scare me, I'm sticking to the Union - Woody Guthrie

          by sewaneepat on Sat Apr 06, 2013 at 02:56:28 PM PDT

          [ Parent ]

          •  Insurance does not equal providers (0+ / 0-)

            They won't care about the insurance if they cannot see a top notch provider.   Remember we're talking wealthy now.  If providers get squeezed and decide to stop taking Medicare patients then Medicare insurance loses some of its value.  So if you are wealthy and they're hitting you with higher premiums for insurance that isn't accepted by the provider you want or maybe no longer covers the test you think you should have it increasingly annoys you.

            It's tricky.  The more Medicare costs and the less it provides, the more attractive other insurance options become for people who can afford them.  So then the middle class begins to be burdened by the loss in quality and increase in costs and increasingly resents being lumped in with the poor.

            I think we're really already seeing this happen because the "serious people" who have money are either Republicans who want to do vouchers or Neo-libs who want Medicare to provide less and less.  They don't care.  They can self-insure and get concierge care.  

             

            •  okay, so now the people you are so concerned (0+ / 0-)

              about paying an extra $47 a month and whom you have spent two days telling me are really not well off are now going to self-insure.

              You are not arguing reality. There may be 1000 people in the US who can self insure.

              I have had no problem with any provider not taking Medicare. No test has been refused. In fact, Medicare is the best insurance I have ever had. And my PCP actually gets a higher payment than he got from my previous insurance. Radiologists and anesthesiologists get less, but they don't refuse Medicare patients.

              And quite frankly, I feel about any doctor who refuses Medicare patients the same as I feel about doctors who refuse Medicaid patients- they are not doctors I would like to see, their priorities are skewed.

              You can't scare me, I'm sticking to the Union - Woody Guthrie

              by sewaneepat on Sat Apr 06, 2013 at 07:22:36 PM PDT

              [ Parent ]

            •  Also all those doctors who do not (0+ / 0-)

              take Medicare - they all had their residency paid for from Medicare funds.  So personally, I find it immoral for them to not take Medicare patients.

              You can't scare me, I'm sticking to the Union - Woody Guthrie

              by sewaneepat on Sat Apr 06, 2013 at 07:39:46 PM PDT

              [ Parent ]

      •  Not sure I agree with this completely (0+ / 0-)
        And another thing - FICA is a terribly regressive tax, the Medicare portion is slightly less regressive than the SS portion because there is no cap on wage income; however, capital gains, dividends, and interest income have not been subject to any FICA tax including the Medicare portion.
        If what you mean by "regressive" is that the poor pay a higher percentage of income than the rich for the same level of benefit, then I am not sure the conclusion holds up.

        First, for basic FICA - what you pay into it has a direct correlation to what you get out of it.  So while at the cap level a person might get a smaller percentage of what they paid in back as benefit, they nonetheless will get a larger absolute amount than somebody that paid in less.  So FICA is somewhat progressive, in that while you do get more out as you pay more in, there is a "bend point" at which what you get back is of a lesser percentage of what you put in than for someone at a lower income threshold

        OTOH, for Medicare, what you get is a defined medical benefit, whether you pay in at minimum wage or pay in at $1,000,000 per year.  That is effectively INCREDIBLY "progressive" if by which you mean that the rich pay a higher amount of money for an equal benefit.  If a person making $150,000 per year in wages is paying three times as much for the same benefit as somebody making $50,000 per year, wouldn't you consider that very progressive, as opposed to "slightly less regressive"?  And for those professionals who have mainly W-2 income up to $500,000 per year, who are now paying ten times what the $50,000 person is paying - again for the same benefit? I'd say, when compared to our income tax rates, that is extremely progressive.

        •  You are seriously saying that a flat tax is more (0+ / 0-)

          progressive than our income tax rates? And that a flat tax on earned income with no tax on unearned income is more progressive than our income tax?

          Working low and middle income people pay a higher percentage of their income in FICA taxes than people who make more than $112,000 a year. That is a fact. That is also a regressive tax - by definition. It redistributes wealth from lower income people to higher income people.

          You can't scare me, I'm sticking to the Union - Woody Guthrie

          by sewaneepat on Sat Apr 06, 2013 at 07:37:23 PM PDT

          [ Parent ]

          •  I think you might be missing my point (0+ / 0-)

            Yes - a worker making $50K pays a higher percentage of his/her earnings into FICA than somebody making $500K, but the benefits out of what is paid into FICA for the 500K worker have a "bend point" such that the return to that worker in retirement is less than the return to the $50K worker (see the small illustration in the upper right corner of this link). So while the tax is "flat" (up to 112K or whatever it's cap is today), the benefit earned per dollar put in actually decreases as you reach the cap.  So yes, the tax is flat but the benefit is progressive - i.e., a better dollar for dollar benefit at the lower parts of the income curve than at the higher parts of the curve.

            I think it is important to realize that there is a specific benefit (entitlement if you prefer) associated with this particular tax, unlike the income tax, which is progressive (but hardly enough) in the sense that not only does the rate go up, but what you get for that higher rate does not change.

            Whether you agree with the way the system is set up or not, I hope I at least clarified the math behind the way the benefit is structured.

            •  I understand how SS is structured. (0+ / 0-)

              However, in the case of
              Medicare, richer people pay a lesser percentage of their income for the same benefit as poor people get, which is whatever healthcare you need. So the tax is regressive and the benefit is the same.

              And in the case of SS, while the benefit may be slightly progressive, the tax is terribly regressive. Someone making $224,000 pays 1/2 the percentage as someone making below $112,000. Someone making $500,000 pays 1/4 the percentage, etc.

              You can't scare me, I'm sticking to the Union - Woody Guthrie

              by sewaneepat on Sat Apr 06, 2013 at 08:34:11 PM PDT

              [ Parent ]

              •  Whatever. You want to focus on the tax rate, (0+ / 0-)

                While I think it needs to be looked at in the context of the specific benefit received.  And in that context, in terms of Medicare, the W-2 "rich" actually do pay a higher rate than lower income folks.  And again, while you are correct that for the same "rate" the rich and poor get the same benefit (healthcare coverage), upon reaching 65, the wealthy person will have paid far more fore that same benefit, thus in practical effect the rate is quite progressive.

                But we are looking at this from different perspectives, one that is actuarial, and one that only focuses on the up-front rates, independent of eventual dollar value of benefit received, so I think we would continue discussing past each other.

                •  From your perspective, it would seem to me (0+ / 0-)

                  that you would think that the income tax rates are extremely progressive, even the capital gains rate. After all, Mitt Romney pays more tax in one year than I will in my lifetime, many times over. And even at his 13.9% rate, he pays many times over what an ordinary person pays who is taxed at the 35% rate, even including their FICA taxes. And yet, we all get the same benefits from our federal tax dollars.

                  A regressive tax is generally defined as a tax which takes a larger percentage from low income people than from high income people. The Medicare tax as well as the rest of the FICA tax fits that definition.

                  You can't scare me, I'm sticking to the Union - Woody Guthrie

                  by sewaneepat on Sun Apr 07, 2013 at 04:12:06 AM PDT

                  [ Parent ]

    •  Ah, but that would require politicians to bite the (5+ / 0-)
      Recommended by:
      Chi, Sunspots, Whatithink, Jim P, Bon Temps

      corporate drug lord-hands that feed them.

      Direct government negotiating of drug prices would do a helluva more, however.  
      And we all know how that will end.

      Like Mexico, America has it's own Drug Cartels. Ours don't need armed thugs when they have legislators to do the wet work for them.

    •  Wealthy people dropping out of Medicare (1+ / 0-)
      Recommended by:
      MichiganChet

      means it becomes much easier to organize and finance opposition to Medicare as we know it, and also moves us even further away from universal Medicare.

    •  I dont agree (0+ / 0-)

      Mostly because of the differential in health status correlating with income, as I stated in my diary. In any system of health insurance there is an implicit subsidy of the sick on the part of the well, who pay into it with their premiums but do not reap the benefits that someone who is ill - and needs them - gets. that is the way health insurance works. That is the way it works in most of the Western world, where you are taxed based on your income, but benefit according to how sick you are.

      I have thought about this a lot; in fact I resent the accusation that I haven't thought this through. Wealthy people abandoning medicare turns it into another program for the poor, like medicaid, which is subjected to constant political attack. Read the headlines lately?

      You are correct that direct government negotiations of drug prices - again, like they do in many other countries - would do a lot more. Why then, when this option is not being considered should we support an implicit weakening of the program that would really net a lot less?

      An empty head is not really empty; it is stuffed with rubbish. Hence the difficulty of forcing anything into an empty head. -- Eric Hoffer

      by MichiganChet on Sat Apr 06, 2013 at 06:33:28 PM PDT

      [ Parent ]

      •  There's nowhere for them to go (0+ / 0-)

        They are 65 plus.  And their premium for Part A is free.  You would have to be an idiot to drop out.

        You know what happens when you turn 65?  Cancer. Bad knees.. all kinds of shit.  Yes, you might be "healthier" in a basic sort of way if you are wealthier.  

        But you are not immune to sicknesses.  And a good base health level does not protect you from illnesses like above.  I know some pretty wealthy people who have suffered with really expensive cancer treatments.

        See.. here's the thing.  You have forgotten what insurance is for.  It is supposed to be there to protect your assets against catastrophic illnesses that could wipe you out financially.  Wealthier people see their friends coming down with all kinds of illnesses and think: "It could happen to me tomorrow".  Hence my comment above.. only an idiot would "drop out" of Medicare.

        The wealthier may simply buy better supplemental plans.

  •  Wealthy working vs wealthy retired (3+ / 0-)
    Recommended by:
    gramofsam1, NYLefty, MichiganChet

    Help me understand.  If we support the idea of raising the income limitation for contribution to SS as a way of managing the shortage by adding to the amount the working wealthy pay into the system, why is asking those with greater financial independence who are retired to pay into the system (by either a higher premium or a higher copay) any different?  I know many wealthy retirees with high net worth but little income who could well afford to pay more but don't under the current rules.  It seems that asking the well off to pay is a much better solution than forcing the poor to do without.  Even better would be building fewer bombs but that does not seem to be an option nor would it finance the system.

    •  Because you are implicitly taxing their benefits (0+ / 0-)

      rather than their income that pays for the benefits. And I am going to take a bit of a conservative position here: why disincentivize those who have successfully worked and saved when it comes to paying out that which they have saved for, especially in light of how meager ss benefits are and how much the 'you're on your own' ethos pervades retirement currently. I guess I would also respond the way i did to another commenter in that it undermines the social solidarity aspect of medicare; good luck getting universal healthcare or single payer after that

      An empty head is not really empty; it is stuffed with rubbish. Hence the difficulty of forcing anything into an empty head. -- Eric Hoffer

      by MichiganChet on Sat Apr 06, 2013 at 06:18:28 PM PDT

      [ Parent ]

  •  It's all part of the Gutting of the New Deal (4+ / 0-)
    Recommended by:
    Chi, Sunspots, Calamity Jean, greenbell

    Those on board with this, are libertarians at heart who truly believe that if you worry about your neighbor, you can, if you want, pay directly out of pocket for them. Knowing damn well most will have trouble paying their own way.

    Watch for the mass exodus of American Elderly to other countries with a lower $$ standard of living and cheaper health care.

  •  Spring is in the air (2+ / 0-)
    Recommended by:
    Sunspots, ZedMont

    first the comment about the California AG as eye candy and now this other gaff about means testing and CPI, it is clear that Obama is in spring rut.  

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