Republicans are lying to the public about Medicare. Lyin' Ryan wants to shut down Medicare and turn the people who need health care over to private insurance who would be paid to pay for the health care. Take a look at the facts as Paul Krugman lays them out.
...we don’t have a Medicare problem, we have a health care cost problem. And Medicare actually does a better job of controlling costs than private insurers — not remotely good enough, but better.
If you look at Medicare in isolation, the cost rise looks terrible, because it is:
But it looks a bit different if you look at private insurance, too:
If Medicare costs had risen as fast as private insurance premiums, it would cost around 40 percent more than it does. If private insurers had done as well as Medicare at controlling costs, insurance would be a lot cheaper.
It’s a mystery why anyone claims that shifting more people into private insurance is a good idea. Actually, no, it isn’t a mystery; it’s an outrage.
Imagine if people over 50 had been allowed to buy into Medicare as was proposed during the Health Care debate. They would have been paying into the system as they already are and also paying for their current insurance. And they would have been getting their care from the less costly system at a time when they are starting to have health problems.
In fact, imagine if everyone were in the less costly system.
So why do the Republicans want so badly to destroy Medicare and hand over the tax money paid to the federal government for health care to the private insurers? It's simply not cost effective. The reason is that the 'low-tax low-government benefits libertarians' have taken over the business Republicans.
Remember Grover Norquist who runs the group Americans for Tax Reform which demands that every Republican sign a no new taxes pledge? Americans for Tax Reform is funded by The uberwealthy libertarian brothers David H and Charles G. Koch who funded the libertarian think tank the CATO Institute. They are sons of Fred C. Koch and inherited their wealth from him, proving again that children who inherit great wealth usually spend their lives defending their inheritance to the detriment of the society they live in. Fred Koch was one of the founders of the hate group the John Birch Society.
It's not just the Koch's, but they are the most obvious right now. It is wealthy people who are either libertarian or are using the libertarian philosophy to gain political power.
These people have hated the New Deal since the 1930's and they continue even now to work to destroy it. We are right now in a major political battle with the wealthy aristocratic-wannabees.
The Republicans are saying they will create an international financial disaster by refusing to increase the debt limit unless the Democrats join them in destroying Medicare. This is not a publicly popular position so the Republicans have to have the Democrats join them and share the blame if it is going to happen. So they are setting up a hostage crisis.
One leading GOP lawmaker acknowledged that the Republican plan is “dangerous,” but the party doesn’t care. Another conceded that the GOP is inviting a “sovereign debt crisis,” but figures Obama would get the blame, so Republicans don’t care about that, either.
The key to an effective hostage strategy is creating a credible threat. When the hostage taker has a gun to the head of hostage, those expected to pay the ransom have to genuinely believe the bad guy really will pull the trigger. Yesterday, the Republican message to the president wasn’t subtle: we really will pull the trigger and then blame you for not paying the ransom.
[...]
As far as Republicans are concerned, there’s no need to compromise — they’re the ones with the gun and the hostage. Why strike a deal? If Obama caves, they get what they want. If Obama stands firm, and the GOP deliberately destroys the economy, Republicans will blame the president and destroy his chances of re-election. As far as the GOP leadership is concerned, all they have to do is wait.
When politicians are demanding that they be given the power to enact a widely unpopular and irrational policy in the face of widespread opposition or they will destroy the entire economic system and conducting a campaign made up of whines and propaganda lies those politicians are performing a personally motivated power-grab. They are NOT working to make America a better nation for Americans. They are desperate and both their patriotism and their sanity is questionable.
Does anyone really think that Paul Ryan's Vouchers-for-Medicare plan can work? Ask the insurance industry which companies want to offer health insurance to the over age 65 demographic. This is from Benjy Sarlin at Talking Points Memo.
Unlike the Affordable Care Act, which mandated that millions of young and healthy Americans purchase insurance with government subsidies, the Paul Ryan plan would instead bring the oldest, sickest, and least profitable demographic to the table. And with the CBO projecting that the average senior would be on the hook for over two-thirds of their health care costs within just 10 years of the plan's adoption -- a proportion that is projected to worsen in the long run --- the government subsidies backing them up may not bring in enough profitable customers to make things worthwhile.
"If reimbursement rates are too low to provide basic benefits, they'll tell the government, 'You do it,'" one insurance lobbyist told TPM. "I don't think they can require they lose money, they'd just pull out."
Dan Boston, a veteran lobbyist for health care providers and co-owner of Health Policy Source, said in an interview with TPM that he was taking a "wait and see" approach on the GOP budget before judging its value. (The American Hospital Association opposes the plan). But he cautioned that a major concern would be whether hospitals and private insurers would be left on the hook for low-income seniors eligible for both Medicare and Medicaid, who could run up significant costs with little hope of ever paying them off.
"I think everyone is going to be looking at the viability of the funding," he said.
Any so-called insurance company that tried to offer policies to the Medicare demographic would not last two years.
Ryan's plan is a perfect example of the crap that Republicans and much of the MSM call thoughtful and innovative. Ann Rand would have loved this stuff.
Medical costs are climbing sustainably. No question. But America pays more than twice as much per person for health care as any other industrial nation while NOT getting as good results for what is bought as those other nations get! So what is the Republican solution as presented today by Rep. Ryan? Abolish Medicare.
Here's an excellent description of what was offered written by Josh Marshall,.
What the Republicans are proposing are not cuts. Some level of cuts and/or cost containment in Medicare are necessary because medical inflation is growing so quickly. But these aren't cuts. They're using a temporary budget crisis and the need to slow the rate of Medicare costs over long run simply to abolish the program. That's a bait and switch. It's the medical side equivalent of the "private accounts" bamboozle that President Bush used in 2005 to try to phase out Social Security.
Medicare is a federally-backed health insurance program for seniors. Why seniors? Because seniors as a group are just too sick for the private health care insurance sector to adequately provide coverage for. To rein in costs you can reduce benefits that the program provides or place more cost containment measures in place. Real pain is involved in both. But that's a legitimate area for debate. Medicare is a long term budget problem, unlike Social Security which isn't.
Or you can decide just to abolish the program altogether. Just eliminate Medicare in its entirety. This is what Rep. Ryan (R-WI) calls "fixing" Medicare, i.e., getting rid of it. Getting rid of it means abolishing the program and pushing seniors back into the private health insurance system and providing a subsidy to help pay the costs of your average 75 year old's health care. If costs go up? Well, start saving now.
This piece of Republican bamboozlement is going to get a lot of media blather in the next few weeks - even as the tea baggers shut down the federal government. But what it should get is total rejection. There is simply nothing here except a conservative primal scream shouting "We hate government except for Wars!! Government exists to Kill - kill - Kill and nothing else!!"
What no one today remembers is that when Medicare was passed in 1965 there was no insurance for anyone after age 65. If you had insurance and turned age 65 that health insurance was cancelled and there was no company in the market which would sell you a policy. People over age 65 were simply uninsurable.
This is the nature of the market that Paul Ryan wants to throw medicare beneficiaries back into.
Sorry about the time off. I've missed writing my opinion here, but I took a course on data structures that turned out to be data structures along with an introduction to programming languages Visual Basic, C++, and C# as implemented in Microsoft's Visual studio 2008. All in six weeks. Tough but fascinating.
Unfortunately, it was time consuming, and blogging is addictive, so I had to avoid the blog. I'm not totally back, either. But here are some interesting political stories.
Want to know what happened when the Medicare bill passed the Senate the other day? Kevin Drum summarizes Krugman. There may be some hope for the Democratic Congressional leadership yet, the FISA cave-in and abandonment of the Rule of Law notwithstanding.
The big news from the McCain camp is that McCain's co-chair and economics advisor told the Washington Post Editorial Board (Gramm was speaking for McCain, mind you) that regarding the concerns of the public about the current Recession Marie Antonnette had it right. "Let them eat cake."
Well, actually Gramm said "You've heard of mental depression; this is a mental recession. .... We have sort of become a nation of whiners." Same thing, really. Just a different translation from the (conservative and elitist) French Monarchists.
People in the McCain camp with less of a tin ear quickly got the candidate to disavow Gramm's statement. McCain stated that when Phil Gramm was speaking for McCain to the Wall Street Journal Editorial Board for McCain, he wasn't REALLY speaking for McCain.
Obama quickly added his view of the issue:
This follows the similar goof by McCain when he stated that America's most successful social program, Social Security, "...is a disgrace."
The only disgrace is that Wall Street bankers can't get their hands on the commissions they want from those large sums of money that are passing through the Social Security system. And somehow, the Social Security system works and works very well as it is structured, without the involvement of (expensive) Wall Street Bankers. Those "lost" commissions actually go to the retirees instead of making the Wall Street Bankers richer.
But back to the economy - the collapse of the mortgage market has gotten worse. Atrios reported yesterday that Fannie Mae and Freddie Mac, the two super large purchasers of mortgages, may shortly become insolvent. They either own or have guaranteed $5 trillion in mortgage debt. That is the poster child for "too big to fail." The Federal Reserve Chief, Ben Bernanke is considering taking them over - which means that the American taxpayer will cover their losses. If so, it will make the Savings and Loan Crisis look very small in comparison.
The Republican view is that such really large financial organizations should be bailed out if they become insolvent, but that the homeowners who are being foreclosed should not get any similar bail out. Yet bailing out the homeowners would prevent or alleviate the problems effecting the large banks.
according to National Public Radio this morning shares of Fannie Mae and Freddie Mac have dropped by half, indicating what the owners and buyers of those shares consider to be the most likely outcome of their problems will be. Phil Gramm and John McCain are wrong. The economic problems are not just "...a mental recession." They are instead the direct result of three decades of deregulation of the banking and financial sector forced through by the believers in the so-called "Free Market." An unregulated financial market always leads to a series of booms and busts, each larger than the one before. This was learned clearly by Franklin Roosevelt and was the reason for the Glass-Steagall Act which Phil Gramm ram-rodded the repeal of in the late 90's.
McCain has at least two real problems in his campaign for President. First is his ideological blindness resulting from his belief in so-called Free Markets. Second, as demonstrated by the McCain campaign messages on Social Security and on the economy is the lack of coordinated management in his campaign headquarters. The ideological blindness is not something that someone running for President as a Republican conservative can do anything about. The thing to watch is the campaign management as demonstrated by the lack of message discipline.
The McCain campaign knows it, which was what the earlier announcement that Steve Schmidt will take over the day-to-day operations of John McCain's presidential campaign from current campaign manager Rick Davis. Steve Schmidt is reportedly a message management expert. His skills will be sorely tested by the McCain campaign because of the very nature of his candidate and McCain's relationship with the Press.
The poor management of the campaign is a clear reflection of the man at the top, John McCain himself. It was similar poor campaign management that almost drove an essentially broke McCain out of the Republican primary in the Summer of 2007, and the poor management continues. McCain simply is not an effective top manager.
McCain has never personally managed any organization larger than his own Senate office. His largest naval management effort was a year running a squadron on an aircraft carrier, where overall management was handled by the Captain of the carrier. McCain was not in overall command there. Nor has McCain ever held strategic command anywhere before this run for the Presidency. If his efforts at managing his campaign are any indicator, both Obama and Hillary are much better managers than McCain is.
Still, I doubt that the McCain campaign will continue to make two or three gaffs a week as it is currently doing. They will learn as they go along - if they can overcome McCain's ego.
There's a lot more worth discussing, but I still have computer classes that need my focus. This just what I see that really needs to be written about.
Addendum July 12, 2008 at 9:31 AM CDT
The New York Times presents an interesting article on what the reported concern about Fanny Mae and Freddie Mac means to the general public at the moment. It may be serious, and it may just be more happy talk by the bankers to try to calm the publics fears so that they won't stop buying homes right now. It won't be clear which it is until next week at the earliest.
We're nearing that delicate point in the cycle when even the usual cheerleaders have hung up their pompoms, consumer and business confidence has disappeared and investors are driven mostly by fear rather than greed.
What started out as a credit crisis and then morphed into a broader financial crisis has finally worked its way into the real economy. That economic downturn -- a recession, inevitably -- is beginning to wash back on the already weakened financial sector, creating the kind of self-reinforcing vicious cycle that is difficult to control.
This is the way a market economy corrects for its excesses -- in this case, an excess of cheap debt that had the effect of inflating the demand for goods and services and the value of stocks, bonds, real estate and commodities. Now that that cheap credit has disappeared, the value of most of those assets has fallen while some of that demand for goods and services has begun to disappear.
As part of that "de-leveraging" process, households and some businesses are being forced to reduce their indebtedness, either by paying it down or admitting that they can't. But it is in the financial sector, where debt was piled on debt in ever-more complex arrangements, that things have begun to get real dicey. Prices for many credit instruments have collapsed, forcing banks and investment houses to take billions of dollars of real or paper losses. Meanwhile, creating new credit has been dramatically curtailed.
Then we get today's offering from the Wall Street Journal about what the collapse of IndyMac Bankcorp means.
IndyMac Bank, a prolific mortgage specialist that helped fuel the housing boom, was seized Friday by federal regulators, in the third-largest bank failure in U.S. history.
IndyMac is the biggest mortgage lender to go under since a fall in housing prices and surge in defaults began rippling through the economy last year -- and it likely won't be the last. Banking regulators are bracing for a slew of failures over the next year as analysts say housing prices have yet to bottom out.
The collapse is expected to cost the Federal Deposit Insurance Corp. between $4 billion and $8 billion, potentially wiping out more than 10% of the FDIC's $53 billion deposit-insurance fund.
The Pasadena, Calif., thrift was one of the largest savings and loans in the country, with about $32 billion in assets. It now joins an infamous list of collapsed banks, topped by Continental Illinois National Bank & Trust Co., which failed in 1984 with $40 billion of assets. The second-largest failure was American Savings & Loan Association of Stockton, Calif., in 1988.
Many want to blame the collapse of IndyMac on a letter written by Sen. Chuck Schumer pointing out the weaknesses of the bank. Sen. Schumer responds that the bank was in trouble because of its shoddy loan practices, not because he wrote a letter. Sen. Schumer is right. The bankers just want to blame someone outside of banking for the really rotten loans the bankers themselves have been making for the last seven or more years.
IndyMac had been troubled for months, and investors were concerned about its possible downfall well before Sen. Schumer's comments. It specialized in Alt-A loans, a type of mortgage that can often be offered to borrowers who don't fully document their incomes or assets. The company sold most of the loans it originated, but continued to hold some on its books. As defaults piled up, IndyMac's finances deteriorated.
The bank will be run by the FDIC and reopen Monday. The FDIC typically insures up to $100,000 per depositor. IndyMac had roughly $19 billion of deposits. Nearly $1 billion of those deposits were uninsured, affecting about 10,000 people, the FDIC said.
It's not like IndyMac wasn't part of the CountryWide Mortgage Company which made more bad loans than any other mortgage company in the U.S.
Much of the blame lies on the Libertarian Republican Alan Greenspan for refusing to regulate the banks during his long tenure as Federal Reserve Chief.
The drug companies who thought they were going to get a whole new set of customers who would have to pay full undiscounted price for their products has found a major flaw in their plans. 'The donut hole' of non coverage is driving patients to buy generic drugs instead of those still under patent and much higher in price.
The Republicans, attempting to pass themselves off as 'Compassionate Conservatives' and retain control of Congress in 2004 passed the Medicare Drug Bill in 2003 so as to avoid the anger of seniors who tend to vote their views and who had no access to insurance covering prescription drugs. Besides being passed one vote, 216-215, in violation of normal Congressional time limits and after some of the most egregious arm-twisting, was recognized as a major victory for the drug companies and their lobbyists. Both the House and Senate passed versions of the Bill that prevented the federal government from using the purchasing power of 40,000,000 patients and negotiating lower prices for the drugs as both Medicaid and the Veteran's Administration already do. It was a great political victory for the drug companies and their lobbyists.
Or maybe not.
The bill as passed was considered extremely expensive, even before it was learned that the Bush administration had prevented Bill Foster, the actuary who knew the real cost estimates, from reporting the $139 billion higher cost to Congress. Because of the anticipated expense of the program it had a strange feature known popularly as "the donut hole." After an initial annual deductible, Part D. pays approximately 75% of the cost of medications until the total costs of medications reaches $2,510 in 2008. After that, even though the beneficiary must still continue paying the monthly premium, Part D. does not cover any further medications until the total out-of-pocket expense reaches $5,726. The $2,510 is based on total drug costs, but the $5,726 is based on the out-of-pocket expenses incurred and does not include drug costs previously paid by the insurance.
In other words, the coverages stops at the total drug costs of $2,510, a limit that includes the amount of reimbursement for drugs, but does not again start until $5,726 in out-of-pocket expenses (which does not count the amount paid by the insurance) is reached. Let's look at some numbers.
Description
Out-of-pocket
Reimburse
Total drug Cost
Annual Deduct
180
CoPay+Reimbur
628
1702
End init coverage
2,510
Subtotals coverage
808
1,702
2,510
Donut hole
4,908
0
7,429
[This is an illustrative example and uses amounts that may not apply to all Part D recipients.]
The $7,429 is the total drug cost less the reimbursement of $1,702. In other words, the donut hole is all drug expenses between $808 of initial out-of-pocket expenses up to the total out-of-pocket drug expenses of $5,726. That is $4908 in drug expenses not covered by Part D of Medicare.
In addition, while paying those drug expenses it is also necessary to pay the monthly premium of $24.80 or more. That is another $298 per year. Only after drug expenses have passed $7,429 does Part D begin paying approximately 95% of the costs of medication.
The trick to using Part D is obvious. Do not spend more than $2,510 in drug costs. Some people just quit taking medications when the coverage runs out at the beginning of the donut hole. But what a lot of people have begun doing is switching to generic medications. Wal-Mart is selling a lot of them now for $4 a month.
Don't wait until you hit the donut hole. Talk to your doctor, get generics instead of medications still under patent protection, and you may never reach the donut hole. And generics usually are as effective as the newer prescriptions.
Who gets hurt? No one, really. A prescription drug benefit has been needed as part of Medicare for decades. It's just that the Brand name drug companies are finding that their profits are lower.
The interesting thing as that this trend among the seniors is retraining health care providers to discuss price and choose generics whenever possible, so the trend is likely to spread to all patients. The result?
Health care costs will go down a little. More interestingly, brand name drug manufacturer's profits will drop. That's because the value of their patents is going to drop and they are going to have to actually compete for profits with the makers of generic drugs.
This really isn't what the Brand Name drug manufacturers paid their K-Street lobbyists to achieve.
[Note: the premiums and copays used above are the lowest possible. High income people on Medicare Part D may find their own expenses are a little higher.]
