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10 Years of Tax Cuts for the Rich, 10 Years of Increased Debt

June 7, 2011, marked the 10th anniversary of Bush tax cuts that disproportionately benefited wealthy Americans. The rich are opening champagne bottles to celebrate, while advocates for older people and people with disabilities are trying to stave off the cuts to Social Security, SSI, SNAP, Medicare and Medicaid that some claim are needed so that these cuts can continue or even be expanded.

Why are the wealthy celebrating? According to the Center for Budget and Policy Priorities, people with incomes in excess of $1 million saw a 6.2% increase in after-tax dollars as a result of the tax cuts, as opposed to the 2.2% increase experienced by average families earning $40,000-$50,000 per year.  The average dollar tax benefit per tax payer for millionaires was $128,832 (or about three times the income of the average family).  The average dollar tax benefit per tax payer for the $40,000-$50,000 tax payers was $860.

What’s more, CBPP says that the cost of extending tax cuts for the richest Americans is about the same as the projected Social Security shortfall as a share of the gross domestic product (GDP) over 75 years, .7% for tax cut extensions versus .8% for the Social Security shortfall.

And finally, if the tax cut for the rich was allowed to expire, the increase in the debt would stop over the next 10 years.

So why are we talking about capping spending for programs that help middle and low-income Americans, or turning Medicare into a voucher program and Medicaid into a block grant?  The simplest solution would be drink one more glass of champagne for the Bush tax cuts and let them wither away on the vine.

June 8, 2011 at 8:27 pm Leave a comment

A Note to Republicans about Medicare and Health Care Reform

We at the Center for Medicare Advocacy listened to the concerns you expressed about Medicare at the Health Care Summit on February 25.  Unfortunately, your descriptions of what happens to Medicare in the House, Senate, and President’s proposals does not accord with what the proposals actually do.

We want to remind you of some facts about Medicare and the healthcare bills that were passed by the Senate and the House and that are proposed by President Obama.

  • None of the proposals cuts Medicare benefits
    • What Medicare covers today will be covered after legislation is enacted.
    • Coverage is actually enhanced adding coverage of an annual exam.
  • Costs to Medicare beneficiaries are reduced by:
    • Eliminating cost-sharing for preventive services,
    • Reducing the Part D donut hole,
    • Limiting the cost-sharing Medicare Advantage plans may charge.
  • Quality of care received by Medicare beneficiaries is improved through:
    • The addition of new delivery systems to coordinate care,
    • The reduction of unnecessary hospital readmissions.
  • Cuts to Medicare Advantage plans reduce waste in the Medicare program by cutting unnecessary overpayments to private insurance companies.
    • Medicare Advantage plans are paid, on average 14% more that Medicare would spend if the beneficiary were in the traditional Medicare program.
  • Overall, the savings to Medicare extend the life of the Part A Trust fund by 9 years.

Please, when you talk about Medicare to your constituents, get the facts straight and stop scaring Medicare beneficiaries.  On the whole, Medicare beneficiaries stand to benefit if health reform as proposed is enacted.

Republicans express concern about cuts to Medicare, but their actions don’t always follow their concerns.  Republican Senator Jim Bunning from Kentucky is currently filibustering a bill that would delay the 21% cut in Medicare payments to physicians that is to take effect on Monday, March 1, 2010.  If the payment cut is not addressed, many doctors indicate that they will stop accepting new Medicare payments in their practice.  Instead of protecting Medicare, Senator Bunning’s actions will reduce access to doctors for the 44 million people who rely on the Medicare program.

February 26, 2010 at 3:43 pm 1 comment

The “R” in COBRA: It’s Time to Use It Again

Everyone knows about COBRA.  It’s the law that allows people who lose employer-sponsored health insurance to purchase the insurance they previously had.  Because COBRA prevents some people from being uninsured, Congress even set aside money in the Stimulus Package passed in 2009 to help some people who lost their job buy their COBRA coverage.

But not everyone knows that the “R” in COBRA stands for Reconciliation.  The COBRA health care continuation provisions were enacted as part of the Consolidated Budget Reconciliation Act of 1985.  In other words, this important health care protection came into being through the budgetary process that is now being discussed as a mechanism for enacting meaningful health insurance reform.

Some people argue that reconciliation can’t be used for health insurance reform; that reconciliation can only be used to “reconcile” income and spending with the income and spending levels established in the President’s annual budget. But Congress has often used budget reconciliation as a vehicle for making changes to existing policy; COBRA is not the only health bill that was enacted through this process.

Budget reconciliation has been used to establish protections for nursing home residents; extend insurance coverage to workers and dependents who lose employer-sponsored coverage; create a health insurance program for children; expand the role of private insurance offerings in Medicare; and change Medicaid eligibility. Given these precedents, budget reconciliation can be used to create health care reform that will:

  • Expand health insurance to 31 million Americans;
  • Make insurance more affordable for everyone, including closing the Part D donut hole for Medicare beneficiaries;
  • Protect against discriminatory practices by insurers;
  • Reduce fraud and waste; and,
  • From a budgetary perspective, reduce the deficit by $100 billion over the next 10 years.

Congress will need to consider its next steps to enacting meaningful health insurance reform after the White House bipartisan meeting on health care on February 25.  It’s time for Congress to remember the “R” in COBRA continuation insurance stands for “reconciliation,” and to use the same reconciliation process to extend health insurance protections to all Americans.

February 24, 2010 at 11:17 pm Leave a comment

A New Day Dawns for Oversight of Private Medicare Plans

With the advent of the Obama Administration, we have seen a new philosophy towards the private insurance plans that contract with Medicare under the Medicare Part C (Medicare Advantage) and Medicare Part D (prescription drug) programs.

No longer will the Medicare agency “partner” with the Medicare Advantage and prescription drug plans “to design and provide a variety of high quality health care products…..” as the agency said in 2009. This Administration is not about partnering with the private entities that it pays to provide health coverage to Medicare beneficiaries. Instead, Medicare will be looking closely at how these plans operate and what they do with the billions of federal dollars they receive. For example:

• Medicare has told current and potential Part C and Part D plan sponsors that it will no longer accept (during the application process for 2010) the incomplete applications, blank documents and spread sheets, and late filings that it has accepted in past years.

• Medicare announced that it is reducing Medicare Advantage payments for 2010 to account for “up-coding” by Medicare Advantage plans. Plans “up-code” the disease codes for their enrollees, i.e., claim that their enrollees have gotten sicker, in order to receive higher payments. The problem is that the private Medicare Advantage plans claimed an increase that was actually greater than the increase for the Medicare population.

• The President’s budget, released today, May 7, 2009, includes a focus on private Medicare plans and additional funding for greater oversight of the Medicare Advantage and Medicare prescription drug plans, as part of the overall effort to reduce fraud, waste and abuse in the federal government.

These changes are good for the fiscal integrity of the Medicare program, for the older people and people with disabilities who are served by the program, and for all Americans. What a breath of fresh air.

May 7, 2009 at 7:23 pm Leave a comment

Public Support for a Public Plan Option

The Kaiser Family Foundation released its April polling information last week and guess what? The most popular reform option was to expand Medicare to the uninsured aged 55 – 64. That reform is strongly favored by 53%, and another 26% of those polled say they somewhat favor such an expansion.

A public plan option is favored by 67% of those polled, though only 34% are strongly in favor of a public plan. Additionally, 57% of people questioned thought having a public plan option would cause the private plans to do a better job.

Do we think that Congress will listen?

April 28, 2009 at 6:59 pm 3 comments


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