Friday, August 13, 2010

Exellent Sources of Information on the Deficit Commission and Social Security

CEPR: Social Security and Retirement

AARP on Social Security

CEPR: Health Care and Medicare

The Push for Social Security Cuts Ignores the Reality of the Program's Finances and Conditions of Near-Retirees

For Immediate Release: August 12, 2010 Contact: Alan Barber, (202) 293-5380 x115

Washington, D.C.- CEPR Co-Director Dean Baker issued the following statement on the 75th anniversary of Social Security:

"As we are celebrating Social Security's 75th anniversary, many of the most powerful political figures in Washington are making plans to reduce the benefits provided by the program. This drive reflects little understanding of either the program's financial health or the economic situation facing near-retirees.

"The new Social Security Trustees Report showed that the program can pay all benefits long into the future, with no changes whatsoever. If nothing were ever done, the program could pay full benefits until the year 2037, and could still pay 75 percent of scheduled benefits for many decades after this date.

"It would take relatively modest changes to extend the projected period of full funding long past 2037. For example, raising the wage cap to cover 90 percent of wage income, the original target set by the Greenspan commission, would cover 25 percent of the deficit projected over the program's 75-year planning horizon.

"Polls have also shown that most people would prefer to pay higher Social Security taxes rather than see a cut in Social Security benefits. A modest increase in the payroll tax, for example a 0.05 percentage point annual rise in both the employer and employee side of the payroll tax over the years 2021 to 2040, coupled with the increase in the cap, would be sufficient to fully fund the program through its 75-year planning horizon.

"The new Trustees Report projected considerably more rapid wage growth than the 2009 report. Based on the new projections and even with a 2 percentage point tax increase, workers in 2040 would have considerably higher after-tax wages than would have been the case in 2009 projections without a tax increase. The new projections show that workers would earn an after tax wage in 2040 that is more than 40 percent higher than current wages if the payroll tax was increased 2 full percentage points.

"For some reason it has become fashionable to say that Social Security should not be considered apart from the rest of the budget. This is a break from 75 years of practice and effectively amounts to a lie to the country's workers, who have been told that they are paying a designated Social Security tax. The reason for the designated tax is precisely because the finances of the program always were considered apart from the rest of the budget. Ignoring current law and 75 years of past practice with regard to the Social Security program would be like arguing that interest on the government debt should not be considered apart from the rest of the budget. There are good reasons that both Social Security and interest payments on the national debt are not considered in the same way as other areas of government spending.

"The drive to cut Social Security benefits for near-retirees ignores the financial situation of these workers. The vast majority of near-retirees do not have traditional defined benefit pensions. Most accumulated little in 401(k) type accounts or personal savings even before the recession. Much of what they did accumulate, they lost in the stock market collapse of 2008-2009.

"For the vast majority of near-retirees, their major asset was the equity in their home. Much or all of this equity was destroyed with the collapse of the housing bubble. As a result, the huge cohort of baby boomers that is approaching retirement will be more dependent on Social Security than their predecessors. The median household in the age cohorts from 55 to 64 has just $170,000 in total wealth,
including equity in their home. Since this is roughly equal to the price of the median home, this means that they could fully pay off a mortgage and then would have nothing other than their Social Security to support them in retirement.

"The median household in the age cohorts from 45 to 54 has $80,000 in total wealth, roughly half of the value of the median home. With the labor market projected to be weak for most of the years they have remaining in the work force, it is unlikely that they will be able to accumulate substantial additional savings before they retire.

"Finally, the notion that workers should make up for lower benefits by working later into their lives ignores the actual job conditions faced by older workers. Almost half (45.3 percent) of older workers have either physically demanding jobs or have difficult work conditions. For workers with high school degrees, this number is almost 60 percent. More than three quarters of the workers without high school degrees either work at jobs that are either physically demanding or have dangerous work conditions.

"In short, proposals to cut Social Security in the near future effectively take away benefits for which workers have already paid through their taxes. This amounts to a second hit on this group of workers. The same people whose incompetent management of the economy cost many of these workers their jobs and much of their life savings, are now trying to take away the Social Security benefits they will need to survive in retirement. These workers have every right to be furious at the people designing these policies."

Sunday, April 4, 2010

Health care reform victory parade

Some of the neighbors got together the other day to hold a little parade to celebrate our great victory in passing the health care reform bill. The new law is a fixer-upper, but at least it's a start. First fix, the public option?

Wednesday, August 12, 2009

What health reform will do for you -- and why.

August 4th, 2009 by Jason Rosenbaum

The below is based on the House version of health care reform, HR 3200 - America's Affordable Health Choices Act, which is the strongest bill being discussed to date. In short, it will provide a guarantee of quality, affordable health care to everyone.

1. If you receive health insurance from your employer (or your spouse's or parent's employer):

The big things will not change - you will keep your current health insurance, keep your current doctor, and keep your current benefits. All the health reform plans being proposed allow people to keep their health insurance if they want to, and that means keeping their current benefits and choice of doctor. So if you get your coverage through work, or if your spouse or parent covers you on their health insurance through work, these big pieces will not change unless you want them to.

Your health insurance will get better and more stable. Health reform gives your employer a strong incentive to retain your health insurance or make it better. They will have to offer you at least standard, comprehensive package of benefits and your employer will not be able to continue shifting additional costs of insurance to you - they will have to pay at least about 70% of the cost of your coverage.

Your health insurance will get cheaper. As the public health insurance option forces insurance companies to compete, prices of private health insurance will fall. Your costs, even if you keep your current health insurance plan, will go down.

If you lose your job, you will always be able to get affordable insurance. If for any reason you lose your job and your employer based coverage, you will be eligible for affordable health insurance that meets your needs, as described below, with the government helping you pick up the tab until you get back to work, and expenses will be capped to make sure you can't go bankrupt due to medical costs. You will always have a guaranteed, affordable backup to rely on if you need it.

2. If you are employed but do not receive health care benefits from your employer:

Your employer will have to offer you good, affordable health insurance. Under the bill proposed by the House, employers will have to offer you health benefits. Those benefits need to meet a standard for coverage, so you can't be offered sub-par insurance that doesn't meet the needs of you and your family. And your employer will have to cover a large percentage of your health care costs (65% for families and 72% for individuals), ensuring insurance is affordable and your employer can't shift more costs to you. Small businesses are exempt from this regulation.

If you work for a small business that is exempt from regulations asking employers to provide health benefits you will always be able to get affordable insurance. You will be eligible for affordable health insurance that meets your needs, as described below.

3. If you buy health insurance on your own, or if you or your family are uninsured:

You will be able to find coverage. You will have access to a new health insurance "exchange," where both public and private health insurance will be offered. You will be able to compare these plans side-by-side and choose what's right for you and your family. None of these plans will be able to reject your application for pre-existing conditions or for your gender. You will have guaranteed access to health insurance.

You will be able to afford coverage. Any health insurance plan in the exchange will be subsidized if you qualify. Subsidies will be available up to 400% of the federal poverty level, or $88,000 per year for a family of four. These subsidies will ensure that you will only pay a certain percentage of your income in health care costs (that percentage varies depending on how much you make). Bottom line: Health insurance through the exchange will be affordable to you.

You will save money. Even if you do not qualify for subsidies or choose the public health insurance option, competition from the public health insurance option will force prices for insurance to fall across the board.

Your coverage will be good coverage, stable and secure. All plans in the exchange will have to conform to federal regulations, making sure that the plan you purchase covers things that you and your family need - things like preventative medicine, regular checkups, and prescription drugs. And, under health reform, your health insurance company will no longer be able to deny you coverage or care for pre-existing conditions. Your insurance company will no longer be able to drop your coverage if you become sick, or charge you more if you're a woman. There will be no more annual or lifetime caps on coverage, so you won't be stuck with tens of thousands in uncovered medical bills. And if you pay your premiums, your insurance company won't be able to reject a renewal of your insurance plan.

Your expenses will be capped. Deductibles, co-pays, premiums, and other expenses will be capped at a percentage of your income (between 1.5% and 11%, depending on how much you make), so you no longer face exorbitant health insurance costs.

4. If you are on Medicare or Medicaid:

Your health programs will not be touched. There will be no eligibility or benefit cuts to Medicare and Medicaid. Health reform will be financed partly by finding savings in these programs. These savings will come from eliminating portions of Medicare and Medicaid that are no longer needed once we've passed health care reform for everyone. For example, right now, Medicaid pays hospitals a reimbursement for people who come to the hospital without health insurance, and thus stick that hospital with the bill. Under health reform, most people will have health insurance, making these reimbursements unnecessary.

The Medicare "Donut Hole" will be closed. The "donut hole" in Medicare's prescription drug program that leaves seniors with thousands of dollars in drug costs when their coverage runs out partway through the year will be gradually closed under health care reform.

5. Is this all paid for?

Yes. Health reform will be fully paid for, and will not increase the deficit. It will not increase your taxes, either. The House has proposed increasing taxes on those that make more than a quarter of a million dollars per year to pay for health reform. The middle class will not be affected.

There is a short answer to the question of what health reform will do for you: Better coverage, lower costs, and the security of knowing you're not at the mercy of private insurance anymore. This is what health care reform will do for you.

The cost of doing nothing - the conservative plan for health care - is staggering: The average family will pay $10,000 more in premiums by 2019 if nothing is done. We can not afford the conservative health care plan. We must reform health care now, for you and me and our families.

For a lot of you, this information is not news. However, you must know someone who needs to be educated. Copy and paste this post into an email and send it to someone who needs to know exactly how this bill works. Send around this link. Whatever you need to do, get that information out there. Fear can stop health care reform from happening, we need to fight back with the truth.

The Obama Caucus of Ann Arbor is part of Organizing for America.

Monday, July 20, 2009

Why Co-ops would hurt the Public Health Insurance Option.

A co-op for the public option?
Let's talk principles.

Posted on June 12th, 2009 by Jason Rosenbaum in Congress Watch

We're going to see a lot of these kinds of "compromises" from now until we pass a health reform bill through Congress. First, we had the "trigger" proposal, designed to effectively kill a public health insurance option. Now, we have the "co-op" proposal.

It's not particularly useful to keep responding individually to these ideas - we'd be playing whack-a-mole for months. Instead, let's lay out some principles for a strong public health insurance option. If any proposal meets these principles, no matter what you call it, it is worthy of support.

1. National and available everywhere: A strong public health insurance option will be a national public health insurance program, available in all areas of the country. The insurance industry is made of of conglomerates that have national reach. In order to have the clout to compete with the insurance industry and keep them honest, the public health insurance option must be national as well.

2. Government appointed and accountable: The entire problem with private health insurance is that they aren't accountable to you or me. A public health insurance option must have a different incentive. A public health insurance option doesn't have to be a government entity necessarily, but its decision makers must be appointed by government and must be accountable to government.

3. Bargaining clout: The whole point of health reform is to lower health care costs. Clearly, the insurance industry has failed to lower costs when left to their own devices. As the President says, we need a strong public health insurance option to lower rates, change the incentives in our health care system, and keep the industry honest.

4. Ready on day one: The private health insurance industry has utterly failed to control health care costs or provide their customers the quality they've paid through the nose for. With one person going bankrupt every 30 seconds due to health care costs, we cannot afford to wait any longer for a real fix. We need the public health insurance option to start lowering prices now. That means no trigger.

Judging from the reports I've seen on Senator Conrad's proposal, a co-op as currently envisioned does not meet these principles. Here is why, in Senator Conrad's words:

And for those against a public option because they fear government control, the co-op structure has some appeal because its not government control. It's membership control, and membership ownership.

What you probably need is a national entity with state affiliates, and the further flexibility so those states can have regional pools. So in our part of the country, you might have North Dakota, South Dakota, Montana, and Wyoming go together. Out east you might have Maine, Vermont, and New Hampshire together. We're consulting with experts tomorrow about that.

As envisioned, the co-op proposal would create a bunch of member operated plans around the country, none of which would have the clout to compete with private insurance or really lower prices with providers and drug companies.

Also, another note of caution: A co-op is a legal structure. In a co-op, members of the co-op are legally liable for the co-op. That means that if a co-op was, say, sued for doing something wrong, its members might be liable for the legal bills and damages.

If Senator Conrad or anyone else in Congress can come up with a proposal that meets the above principles, we'd be happy to support it, whatever it's called. As the proposal stands now, Conrad's co-ops will not bring costs down, save our economy, or allow us to choose a viable public option if we don't want to be at the mercy of private insurance. These co-ops will not solve the health care crisis, and so we oppose them.

If you agree, you can go here:
to call your Senators and tell them why a co-op is not the change you voted for.

Write a Quick Letter for the Public Option

Here's one easy way to write letters to Michigan's Senators Levin and Stabenow; use this sample letter as a starting point. Make a bigger impact by including your own personal health care story, and writing it by hand, on paper, with a pen! Help us write 100 letters to our Senators. Now is the time to be active and help pass effective health care reform, especially the Public Health Insurance Option. The Obama Caucus of Ann Arbor,

------------------------------------- Sample Letter --------------------------------------
Dear Senator:

In order to ensure affordable health care for all Americans, I ask you to support a strong
version of President Obama’s health care reform, one that:
  • ensures that quality affordable health care is available to all Americans
  • reduces costs – Rising health care costs are crushing budgets
  • guarantees choice of doctors and plans, including a public health care insurance option
  • is national and available everywhere
  • has decision-makers who are government appointed and accountable
  • has bargaining clout to lower rates
  • is ready on day one
I also ask you to put a statement on your web site's home page supporting these seven points.

Co-ops or triggers will only weaken the public health insurance option, and make it ineffective. I ask you to oppose them.

The strong reform of a public health care insurance option is important to me because
[share your personal health care story].

We cannot afford to delay any longer. America needs you to act now to fix our broken
health care system.


[your signature]


Michigan's Senators

The Honorable Debbie Stabenow
243 West Congress, Suite 550
Detroit, MI 48226

The Honorable Carl Levin
477 Michigan Ave, Suite 1860
Detroit, MI 48226