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May 17, 2012: The Biggest and Baddest Lies about PPACA ("Obamacare")

Definition:   “Obamacare” – [oh-bom-aah-kare] noun

A series of mostly good originally conservative Republican health care reform ideas which are now opposed by conservative Republicans because they were embraced by President Obama

I have been working on a compilation of the many lies and distortions about PPACA that have, in many cases become viral on the Internet. And while most of them are, to the rational mind at least blatantly and bold-facedly outright lies, their repetition, particularly by the likes of Glenn Beck, Rush Limbaugh, Sean Hannity and Bill O’Reilly have embedded them as apparent “truths” in the collective conscience of the Tea-Party and those who have fallen for the lie.

My list is not-comprehensive¸ and is still a work in progress. The list will be updated and expanded, but as of this haze-filled morning, here it is:

Lie #1 – “Obamacare will result in the largest tax hikes in the history of America. Ordinary taxpayers will see their taxes ‘skyrocket.’" The liars who make this statement go even further, saying: “The top income tax rate will rise from 35 to 39.6 percent.... The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates.” The liars base their conclusion on the scheduled expiration in 2011 of the 2001 and 2003 “Bush tax cuts” which a then Republican-controlled Congress established as a means of getting around Congressional rules on reporting the actual costs of any new legislation. By having the tax cuts “expire within 10 years” they did not have to account for the deficits these cuts created in the federal budget. The liars “assume” that Democrats will simply allow ALL the tax cuts to expire. The fact is that Democrats have repeatedly said that they want only the top end tax cuts, those on individuals earning more than $200,000 a year and couples earning more than $250,000, to expire. The tax cuts on lower incomes will be extended and made permanent. So, unless “ordinary” Americans is defined to include those earning in excess of $200,000 a year, the statement is a lie.

Lie #2 – “Obamacare had a second "wave" of tax increases taking effect January 1, 2011 that impact “ordinary” Americans.” But this "wave" consisted of three relatively minor tax changes that affect relatively few people.

The so-called "Obama Medicine Cabinet Tax" simply aligns rules governing health savings accounts (HSAs), Flexible Spending Arrangements (FSAs) and Health Reimbursement Arrangements (HRAs) with the tax rules that apply to deducting medical expenses generally. Under current law, taxpayers in general are not allowed to deduct the cost of non-prescription drugs as a medical expense. The only exception is for insulin. But those with HSAs, FSAs and HRAs were allowed to use pre-tax dollars to buy aspirin, over-the-counter cold and allergy medications, and other drugs available without a doctor’s prescription. The new "tax" simply says HSAs, FSAs and HRAs can’t be used to buy these medications -- except for insulin -- after December 31. This will affect a small proportion of taxpayers. For example, the health insurance industry says 10 million persons were covered by HSAs as of January of this year, roughly 3.2 percent of the population. For that relatively small group, the change does amount to a tax increase. It will bring in a total of $5 billion over the next 10 years.

The "HSA withdrawal tax hike" refers to a doubling of the current 10% penalty that must be paid on any HSA funds spent for something that’s not a qualified medical expenditure. This is expected to bring in $1.4 billion over 10 years.

The "special needs kids tax" refers to a cap of $2,500 that the new law places on spending from FSAs. The argument made is that "many" families with special needs children now use FSAs to pay tuition at private schools catering to special needs children, schools that Obama’s opponents say "can easily exceed $14,000 per year." Perhaps so. IRS rules do allow use of FSA funds to pay for such expenses with pre-tax dollars. But the liars who make this statement offer no evidence of how many families might be taking advantage of this tax break currently. Indeed most employers offering FSA plans already limit the amount that can be set aside tax-free, to $2,500-$4,000. The claim is copied from the website of Americans for Tax Reform, but as ATR itself says: "For most people, the $2500 cap won’t be noticed." As ATR concedes, FSAs "tend to be used for things like small deductibles, co-payments, eyeglasses, over-the-counter medicines, and laser eye surgery." The amount deferred in the typical FSA is probably much less than $2,500 today, ATR says. The Congressional Budget Office expects the change will bring in $13 billion over 10 years, but says nothing about how much of that is likely to come from the pockets of parents of special needs children.

Without arguing for or against any of these three tax increases. I simply point out that, even taken together, they amount to less than $2 billion per year and, therefore, don’t constitute anything close to a "wave" of historically large tax increases taking effect next year.

Lie #3 – “Obamacare provides for armed IRS agents to enforce penalties.” This is a fantasy. Tea-Party lawmakers are claiming the law might require “as many as 16,500” new jobs in the IRS, a figure inflated by dubious assumptions. But the agency’s role will be mainly to hand out tax credits, not to enforce penalties. And the IRS won’t be sending armed agents to enforce the health care mandate, as falsely claimed by Texas Tea-Party Congresscritter Ron Paul. The law specifically waives any criminal penalties for those who both decline to obtain insurance coverage and refuse to pay the tax enacted to penalize lack of coverage.

Lie #4 – “Failure to purchase insurance will result in ‘jail time” for offenders.” This is another bold-faced lie perpetuated over and over again by the laws’ opponents, and especially prevalent among Fox News commentators and guests. The Facts: The law has a specific provision: "In the case of any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure," which prohibits criminal prosecutions (and any possible “jail time.” Fox News reluctantly and belatedly admitted this truth. But Fox News’ Bill O’Reilly, trying to defend himself and his network from this allegation, went so far as to suggest that “no one on Fox News had ever suggested that there would be jail time.” That statement was debunked by numerous news agencies citing more than 40 instances when Fox News commentators and guests lied about jail time, with at least 3 of these coming from Bill O’Reilly himself. See, for example: http://www.politifact.com/truth-o-meter/statements/2010/apr/27/bill-oreilly/oreilly-says-no-one-fox-raised-issue-jail-time-not/

Lie #5 – “The law set up a "private army" for Obama.” The facts: The liars who make this statement refer to a provision in the new law that establishes a Ready Reserve Corps of doctors and other health care workers who can be called upon in the case of a public health emergency. E-mails that call them "Hitler youth" and speculate that they may be administering "lethal injections" are thoroughly false and malicious.

Lie #6 -- “A government committee will decide what treatments you will receive." The facts: The liars who make this statement refer to a provision in the new law that establishes a "private-public advisory committee" that will "recommend" what minimum benefits would have to be included in the basic insurance package that would meet the program’s “mandate” for coverage. There is nothing in the law that limits an individual from coverage of more extensive benefits nor is there a government panel which will review each individual’s treatments.

Lie #7 -- "Non-US citizens, illegal or not, will be provided with free healthcare services."   The facts: The liars who make this statement refer to a provision in the new law that prohibits discrimination in health care based on "personal characteristics." Another provision explicitly forbids "federal payment for undocumented aliens" and further prohibits undocumented individuals from even using their own money to pay for coverage through the insurance exchanges that will be created by the new law.

Lie #8 -- “Muslim Americans are exempt from the mandate to have health insurance.” The law does say that some religious groups may be considered exempt from the requirement to have health insurance, and it uses the definition from 26 U.S. Code section 1402(g)(1), which defines the religious groups considered exempt from Social Security payroll taxes. Eligible sects must forbid any payout in the event of death, disability, old age or retirement, including Social Security and Medicare. They must also be approved by the Commissioner for Social Security. The law was originally designed to apply to the Old Order Amish, and we have yet to find any cases in which members of other religious groups were successfully able to claim exemption. The Muslim faith does not forbid purchasing health insurance, and no Muslim group has ever been considered exempt under the definitions used in the health care law.

Lie #9 – “Under the new health care law, the elderly will be denied care when they have passed the age limit for treatment.” The liars who make this statement are unable to cite any provision, any reference, or any speech, comment or off-the-record remark from any of the bill’s sponsors or supporters that justifies this conclusion. Where can we start, there is absolutely nothing in the new law, not a sentence, not an inference, not a scintilla of evidence that “age” would be a standard for care or could become a standard of care. Some lies are more bold-faced than others. This is one of them.

Lie #10 – “A section about ‘Community-based Home Medical Services’ is actually a payoff to ACORN for its support of Obama." The liars making this statement interpret any reference to the word "community" to be some kind of payoff for ACORN, a “community-organizing” group long vilified by President Obama’s opponents. ACORN does not provide medical services, home or otherwise, and there is no connection, tangentially or otherwise. In truth, “community-based home medical services” and the development of “community-based health centers” have been old pre-Tea Party takeover Republican proposals as an alternative to the more direct government provision of care. Three times in the eight years of President George W. Bush State of the Union speeches, Bush called for Congressional action on expanding “community-based health centers.” This just another good old pre-Tea Party takeover Republican idea, incorporated into the new law in an attempt to gain bipartisan-support, that has been turned on its head and is now evidence of Obama’s socialism.

Lie #11 – “Every person will be issued a National ID Healthcard.” The liars who make this claim refer to a provision that government standards for electronic medical transactions "may include utilization of a machine-readable health plan beneficiary identification card,” to show eligibility for services. Insurance companies typically issue such cards already, but if such a standard were issued the cards would need to be in a standard form readable by computers. The word “may” is used to permit such a standard, but it does not require one. There is no mention of any “National ID Healthcard” anywhere in the bill.

Lie #12 -- "The Obama Health and Human Services Department is planning to compile a federal health record on all U.S. citizens by 2014," including "each individual’s Body Mass Index." The Facts: The liars who make this claim refer to a provision in the new law that directs the establishment of an “electronic health record” (EHR) by 2014. Other liars about the bill have cited this same provision for all sorts of potentially malevolent and nefarious actions by government. Let’s set the record straight: the broader use of electronic “health information technology” (HIT) has been a goal of both the private health care industry, which formed a trade group the “Association for Electronic Health Care Transactions” (AFEHCT) in 1993 and the government, which established the quasi-government-private sector “Workgroup on Electronic Data Interchange” (WEDi) in 1991. This was the original brainchild of Missouri pre-Tea Party takeover Republican Senator Christopher Bond in 1989 and was a major part of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Some estimates say that better use of HIT could result in savings of up to 30% of the health care dollar. Computerizing medical records has long been a goal of policymakers across the ideological spectrum. The idea is to shift from paper-based records to electronic ones, so that doctors can access information about patients more quickly and easily and make better clinical decisions as a result. Supporters hope that electronic medical records will reduce the frequency of medical errors, unnecessary diagnostic tests and inappropriate treatments. They also hope that, in the long term, streamlining record-keeping could bring down the rapidly escalating cost of health care. As noted, the effort did not begin with President Barack Obama. At the earliest President George H.W. Bush called for more work in this area in 1991. In 2004, his son, President George W. Bush issued an executive order creating incentives for the adoption of information technology by 2014, to be spearheaded by a new federal official, the national coordinator for Health Information Technology. Under Obama, Congress passed his economic stimulus package in February 2009. The stimulus included several items designed to promote health information technology, including $19 billion over four years to fund electronic infrastructure improvements and the widespread adoption of electronic health records by providers, typically through higher Medicare and Medicaid reimbursements for doctors who use electronic medical records effectively. The Office of the National Coordinator for Health Information Technology describes the Nationwide Health Information Network as a "network of networks." Please note this is not a single database residing at, say, a federal agency. It's more accurately viewed as a network to link many separate databases where records already exist, such as regional databases or medical offices, along with efforts to establish common technical standards so that these far-flung repositories of data can exchange information as needed. So will an intrusive government will have access to your private medical information? The short answer is: No. This is just another great old pre-Tea Party takeover Republican idea that has gone bad because it was embraced by Democrats and President Obama. Just say NO to anything President Obama says.

Lie #13 -- The federal government will have direct, real-time access to all individual bank accounts for electronic funds transfer.” The Facts: The liars who make this claim refer to a provision that aims to simplify electronic payments for health services, the same sort of electronic payments that already are common for such things as utility bills or mortgage payments. The bill calls for the secretary of Health and Human Services to set standards for electronic administrative transactions that would "enable electronic funds transfers, in order to allow automated reconciliation with the related health care payment and remittance advice." There is no mention of "individual bank accounts" nor of any new government authority over them. Also, the section does not say that electronic payments from consumers is required. Also, this section of the law simply expands on the 1996 Health Insurance Portability and Accountability Act (HIPAA) which was originally proposed by President George H.W. Bush in 1991 and which was passed by a GOP-controlled Congress in 1996 and expanded by Republicans in 2004 and 2006. Just another good old pre-Tea Party takeover Republican-idea gone bad simply because Democrats also support it. The Republican/Tea-Party “NO-machine” gone amok.

Lie #14 – “Taxpayers will subsidize all union retiree and community organizer health plans (read: SEIU, UAW and ACORN).” The liars who make this claim refer to a provision that would set up a new federal reinsurance plan to benefit retirees and spouses covered by any employer plan, not just those run by labor unions or nonprofit groups. Specifically, it covers “retirees and . . . spouses, surviving spouses and dependents of such retirees” who are covered by “employment-based plans” that provide health benefits. It’s open to any “group health benefits plan that . . . is maintained by one or more employers, former employers or employee associations,” as well as voluntary employees’ beneficiary associations . Furthermore, the aim of the fund is to cut premiums, co-pays and deductibles for the retirees. Payment “shall not be used to reduce the costs of an employer.” Since this provision went into effect, thousands of corporations, including some of the nation’s largest employers, have applied for coverage.

Lie #15 – “All private healthcare plans must conform to government rules to participate in a Healthcare Exchange.” The liars who make this claim are trying to draw negative inferences from a provision in the new law setting up new state and regional Health Insurance Exchanges through which individuals and employers may choose from a variety of private insurance plans, much like the system that now covers millions of federal workers. Any private insurance plans offered through this exchange must meet new federal standards. For example, such plans can’t deny coverage for preexisting medical conditions.

Lie #16 – “All private healthcare plans must participate in the Health care Exchange (i.e., total government control of private plans.)”   This is yet another “good” old pre-Tea Party takeover Republican idea gone bad because Democrats “stole” it. Health Exchanges have long been operational in two US states, Utah and Massachusetts. Under the Utah Health Exchange, operational for over 10 years and established by a Republican-controlled legislature and endorsed by Republican governors and local business owners, most Utahans get their health coverage through the Exchange which assures basic standards and operational mandates. In Massachusetts, the state’s “Connector” was and is an integral part of the “Romneycare” plan mandating coverage for every state resident. Under the Obama version, no insurance company is required to sell plans through an exchange if it doesn’t want to. Any employer may choose to buy coverage elsewhere. In fact, the vast majority of employers will still be buying private plans through the normal marketplace, because only employers with 100 or fewer employees are even allowed to buy through an exchange in the first year. It won’t be until 2017, that the exchanges will be open to all employers.

Lie #17 – “Members of Congress have exempted themselves from coverage under the law.” Au contraire, Contrary to all rumors suggesting that members of Congress are NOT covered by the new law, the law specifically requires that members of Congress MUST buy their coverage through an Exchange. Quote: "The only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are — (I) created under this Act (or an amendment made by this Act); or (II) offered through an Exchange established under this Act (or an amendment made by this Act)."

Lie #18 – “The new law cover Viagra for convicted sex offenders.” The facts: There’s no change from current law. Convicts who are not in prison can purchase whatever health plan they’d like and some plans could cover erectile-dysfunction drugs. The Congressional Research Service said that there was nothing in the new law that would "require health plans to limit the type of benefits that can be offered based on the plan beneficiary’s prior criminal convictions." This mini-controversy erupted when Republicans introduced a string of amendments in a final effort to obstruct passage of the reconciliation bill. Republican Sen. Coburn of Oklahoma proposed the amendment to bar sex offenders from getting health plans that covered such drugs with federal money through the state-based exchanges. Democratic Sen. Max Baucus of Montana called the amendment "a crass political stunt." And it failed by a 57-42 vote.

AND THE BIGGEST, BADDEST LIE ABOUT PPACA OF ALL: “It will “kill granny” (and impose health care rationing) -- Trust me on this, I’m a lawyer… just like his Democratic predecessor in the presidency, Bill Clinton, who was somewhat successful at reaching across the aisle, President Barack Obama has not hesitated to “steal” a good old pre-Tea Party Republican ideal and turn it to good (political) use. Republicans (without a single Democratic vote) passed the “Medicare Modernization Act of 2003.” Buried in that 717-page law were provisions for CMS to begin the process of determining the “comparative effectiveness” of various health care services. The current health care plans simply build on that initial step… but oops, that’s where Sarah Palin’s “death panels” and “killing granny” became an issue.

The GOP-passed 2003 Medicare Modernization Act (better known for establishing the Part D drug program) had lots of buried secrets, not the least of which was new funding for the Agency for Healthcare Research and Quality (AHRQ) and a plan to begin several demonstration projects with a goal of better identifying:

•         “the appropriate use of best practice guidelines by providers and services by beneficiaries”

•         The “reduced scientific uncertainty” in the delivery of care through the examination of variations in the utilization and *allocation of services, and outcomes measurement and research”

•         achieving the “*efficient allocation of resources”

•         “the financial effects on the health care marketplace of altering the incentives for care delivery and changing the *allocation of resources”

(* Trust me on this, I’m a lawyer, “allocation of resources” = “rationing”)

The little agency that could. Buried in the backwater reaches of the U.S. Public Health Service is the Agency for Healthcare Research and Quality (AHRQ), charged with developing the future “cookbook of health care.”

CM² has already embarked on an effort to define many of the elements of effective health care, that is what works and what doesn’t, using much of the work product of AHRQ.

“In the future, we will only pay for what works and not for what doesn’t work.”

President George W. Bush, September 17, 2006

May 16, 2012: FACT CHECK Debunks Crossroads Lying Anti-Obama Commercial: "Obamacare" Does NOT Raise Taxes on Families Earning less Than $250,000 a Year

http://factcheck.org/2012/05/a-bogus-tax-attack-against-obama/

The latest multimillion-dollar attack ad from Crossroads GPS (one of those "corporate personhood-funded" PACs established after the right-majority on the Supreme Court declared "corporations to be people" ... run and controlled by former Vice President Dick Cheney) claims President Obama broke a promise to not increase taxes for families making less than $250,000 a year. That’s almost entirely false.

The truth is that Obama repeatedly cut taxes for such families, first through a tax credit in effect for 2009 and 2010, and beginning in 2011, through a reduction in the payroll tax that is worth $1,000 this year to workers earning $50,000 a year. And while it’s true that some tax increases contained in the new health care law would fall on individuals, they have mostly not taken effect yet and are small compared with the cuts the president already enacted. And this ad exaggerates them greatly.

The 60-second ad which Crossroads GPS says it would run in 10 states (Colorado, Florida, Iowa, Michigan, North Carolina, New Hampshire, Nevada, Ohio, Pennsylvania and Virginia) at an initial cost of $8 million, is the first salvo in what the group says will be a month-long, $25 million ad initiative intended to “frame the national debate on jobs, the economy, Obamacare and government debt.”

Tax Nonsense

The ad ... titled “Obama’s Promise” ... lists several pledges that it claims the president has broken. The worst distortion it contains ... one we haven’t addressed in this campaign ... is an almost entirely groundless assertion that he broke his often-repeated promise not to raise taxes on persons making less than $200,000 a year, or couples making less than $250,000.

The ad shows Obama saying in a 2008 campaign speech, “If you are a family making less than $250,000 a year, you will not see your taxes go up.” Then, to the sound of shattering glass, the narrator says, “Broken! Obamacare raises 18 different taxes.”

But that’s dishonest nonsense. Only a few of the tax changes in the new health care law will fall on families making under $250,000 a year, or individuals making less than $200,000 for that matter. And they make up only a small part of the $503 billion figure that appears on screen. That 10-year total falls overwhelmingly on individuals who are above those income thresholds ... just as Obama promised ... or on corporations. Money to be collected from individuals regardless of income would come mostly from taxes (or penalties) that are not yet in effect.

The truth here is that Obama has lowered taxes for all workers through a 2 percentage point reduction in the Social Security payroll tax that started in 2011 and is scheduled to continue through the end of 2012. The cut is equal to $1,000 this year for a worker making $50,000 a year ... or as much as $2,202 to any worker earning at least the maximum taxable level of wages or salary ($110,100 for 2012).

Obama had previously signed a tax cut that benefited nearly all working families and was in effect from 2009 through 2010. The “Making Work Pay” tax credit was part of the stimulus bill he signed shortly after taking office. That credit was worth a maximum of $400 per person, or $800 for couples during those years. It phased out at higher income levels, and so its benefit went entirely to individuals making less than $95,000 a year, or couples making less than $190,000. The White House figures it went to “95 percent of working families.” And even allowing for those who are retired or unemployed, it benefited more than 75 percent of all individuals and families, working or not, according to the nonpartisan Tax Policy Center.

The Crossroads GPS ad simply ignores these very real tax cuts ... and points to the health care law instead. To back up the claim that 18 taxes are being raised, the ad cites on screen an analysis by the ultra conservative Heritage Foundation. But of the $503 billion in taxes listed by the Heritage document, $210 billion falls specifically on individuals making more than $200,000 a year, or couples making over $250,000. And FactCheck.org says it counts another $190 billion that falls only on businesses, including corporations in general, or in particular on health insurance companies, pharmaceutical manufacturers and importers, makers of medical devices and even producers of biofuels.

To be sure, some unknown portion of the taxes that fall directly on individuals would be paid by persons who are below Obama’s promised threshold. For example, a 10 percent tax on indoor tanning services went into effect in 2010.

But several taxes would affect only persons with income high enough to claim itemized deductions on their federal income tax returns. For example, $15 billion is to come from limiting deductions for medical expenses to the amount exceeding 10 percent of adjusted gross income (up from 7.5 percent currently). That doesn’t go into effect until 2013, and is the largest tax increase that applies only to individuals. And high-income persons are far more likely to itemize than low-income or middle-income persons, so much if not most of the $15 billion will be paid by those not covered by Obama’s promise.

Another $13 billion would come from limiting the amount of money that can be put into tax-advantaged flexible spending accounts to $2,500 a year. That won’t take effect until 2013, and of course would affect only those with enough income to set aside thousands of dollars in such accounts.

Mandate = Tax Increase?

The Heritage tax figure includes $65 billion that comes from penalties to be paid by larger businesses that choose not to offer coverage for workers, and by individuals who don’t meet the law’s mandate to obtain coverage. The law doesn’t label those penalties a tax, and the president has argued that the individual penalties are “absolutely not a tax increase,” and therefore don’t break his promise. But that’s a matter of opinion. In fact, the administration’s lawyers argued before the Supreme Court that the mandate penalties are taxes, and the justices have yet to decide that legal point. So for now, FactCheck.org says it will leave it to its readers to judge whether those penalties would violate Obama’s promise on taxes.

[Jeanne's Note: Heritage Foundation is also talking out of both sides of its mouth with regard to the Obamacare "individual mandate." When the Romneycare plan of 2006 first proposed and then enacted a "mandate" in Massachusetts, the Heritage Foundation took an entirely different view:

We [Heritage] would include a mandate in our proposal–not a mandate on employers, but a mandate on heads of households–to obtain at least a basic package of health insurance for themselves and their families. That would have to include, by federal law, a catastrophic provision in the form of a stop loss for a family’s total health outlays. It would have to include all members of the family, and it might also include certain very specific services, such as preventive care, well baby visits, and other items.

And in describing Romneycare in 2006:

– Heritage On Romney’s Individual Mandate: “Not an unreasonable position, and one that is clearly consistent with conservative values.” http://www.heritage.org/Research/Commentary/2006/01/Mitts-Fit

Changing it's position in 2009 on Obamacare: – “Both unprecedented and unconstitutional.” http://blog.heritage.org/2009/12/09/the-individual-mandate-in-obamacare-is-unconstitutional/

What FactCheck.org does can say is that the $65 billion in penalties would fall mostly on businesses, not individuals. And these don’t take effect until 2014.

Heritage Foundation didn’t attempt to break down the $65 billion figure, so FactCheck.org says it contacted the paper’s author, Curtis Dubay, who told FactCheck.org via email that he drew the figure from a Congressional Budget Office estimate from March 20, 2010. The figure for “Penalty Payments by Employers and Uninsured Individuals” appears in Table 2.

But how much of that is from individuals? FactCheck.org says it found the answer in Table 4 ... $17 billion. Or about $4 billion a year once fully phased in.

That estimate was too low. In fairness to Crossroads GPS and Heritage, we must note that the CBO has since increased its estimate and figures that in 2019 ... the last year covered by the original estimate ... individuals will pay $7 billion in penalties, not $4 billion. And CBO now figures that would rise to $9 billion in 2022. But that’s a tiny future increase compared with the tax cuts Obama has already delivered, including an estimated $120 billion in 2012 alone from the 2 percentage point cut in payroll taxes. And so we judge the Crossroads claim that this promise was broken to be mostly false, and its use of a $503 billion figure that is mostly to be paid by businesses and high-income individuals to be simply dishonest.

May 12, 2012: Obamacare Hidden Secret: Tax Credits for Small Employers to Buy Health Insurance

Seventy percent of small businesses with fewer than 25 employees are eligible for tax credits to help them provide insurance for their workers, according to a study released this past week by Families USA and the Small Business Majority.

In total, more than 3.2 million small businesses would qualify in tax year 2011, the report says. More than 1.3 million businesses are eligible for the maximum credit of 35 percent of premium costs, it adds. The report estimates that the credit would affect 19.3 million Americans employed by small companies and that the total value of the tax credits in 2011 is more than $15.4 billion.

The report, conducted by the Lewin Group, breaks down eligibility by state. The groups released it in an effort to promote the benefit. Established as part of the "Obamacare" health care overhaul (PL 111-148, PL 111-152), the credit was expected to help 360,000 of the estimated 6 million small-business employers in 2011.

Critics of the program argue that its rules are too cumbersome and restrictive. In response, President Obama's fiscal year 2013 budget proposal would reduce the requirements to qualify for the credit and would expand the program. Businesses with up to 20 workers would be eligible for a full tax credit instead of just those with up to 10 workers under current law. Also, employers with up to 50 workers would be eligible for partial credit, instead of the 25 workers required by current rules.

In a recent press call, John Arensmeyer, Founder and CEO of Small Business Majority, an advocacy group, said 57 percent of businesses in a recent survey did not know about the program. Families USA Executive Director Ron Pollack said he expects participation to increase as more employers become aware of the benefit. [Jeanne: And whose fault is this President Obama? For all the really good things in "Obamacare" I have to fault the president and his advisers for their failures in "educating" the public about the benefits fo the new law. Obama allowed the right to get away with so many lies about the law, that the truth is now buried under so much crappola, that digging out the gems is that much harder. <sigh>]

Two small-business owners participated on the call: Ron Nelsen of Las Vegas and ReShonda Young of Waterloo, Iowa. Nelson said he has offered insurance to his employees for years but rising premium costs forced him to cut back on his contribution. He filed for the small-business tax credit and claimed $2,235 in 2010 and $2,722 in 2011.

"This is the first good news surrounding health insurance coverage that I've had in a long, long time," he said. "With this tax credit, I'm not even thinking about having to tell my guys they're on their own when it comes to health insurance, and that's huge."

Young said her business qualified to receive 10 percent of its insurance costs through the credit, which allows her to attract and retain employees.

May 11, 2012: The "ScooterStore" Comeuppance: Obamacare-Required Competitive Bidding on "Mobility Scooters" and Such

Everyone is still cautious, but officials from the Centers for Medicare and Medicaid Services (CM²) and the Government Accountability Office said at a congressional hearing last week that implementation of the first phase of a controversial competitive bidding program for durable medical equipment ("DME") in Medicare has been fairly smooth. There are still some very unhappy medical equipment suppliers. Some are pushing Congress to change the way bidding is conducted. However Housecritter Wally Herger, chairman of the health subcommittee of Ways and Means, said at the conclusion of the hearing that he would want to see Congressional Budget Office (CBO) projections before proceeding any further with an alternative. A major hurdle for opponents of the bidding program is that it saves money; it is tough to kill a cost-saver at a time of deficit reduction. [Jeanne: Heck, even TeaParty/Republicans like Herger can't figure out a way to save the Scooter Store, despite heavy political contributions.]

Herger, of California, also pointed out that lower prices from competitive bidding are benefiting taxpayers and Medicare enrollees. In the first round that began on January 1, 2011 in nine major metropolitan areas, Medicare paid $1,395 for an oxygen concentrator and the beneficiary paid $279 on average in co-insurance, Herger said. Under the old fee schedule, the concentrator would have cost $2,080 and the beneficiary would have paid $416 on average, he said.

Housecritter. Mike Thompson, D-Calif., said that he has been "pleasantly surprised" by the results of the first round of bidding and "unlike the first try, we haven't heard an outcry from suppliers around the country facing difficulties in filing applications." Nevertheless both he and Herger said they're keeping a cautious eye on the program. Herger said that while he strongly believes in competition in the private market, "the process by which the competition is conducted must be fair."

[Jeanne: Come on Congresscritter, "competitive-bidding" is the essence of the free market ... I know the DME industry doesn't like this and they have been flooding the airwaves with "fear ads" suggesting people will be denied their products ... and sending tens of thousands in PAC and "corporate-personhood" money into right-wing coffers, but by your statement we can see your dilemma: Obamacare is actually impacting high (and many times wasteful) health care spending using the very best of the free market. open and free competitive bidding. You are stuck between a rock (your philosophy thrown back at you) and a "hard place" (acting against the views of your major political fund-raisers) ... Poor Baby!]

GOP aides, reacting to the DME industry pressure (and dollars) said that while no specific "remedial" legislation is being contemplated right now, the matter is being watched closely and is under review. [Jeanne: Yeah, I bet ... watch for the amendments to flood in ... or for the entire provision to be repealed when the TeaParty takes over all the government next January.]

Bidding for durable medical equipment is, historically, a contentious subject in Medicare. Spending for items such as power wheelchairs, walkers, hospital beds and other equipment are significant ... $14.3 billion in 2010, including beneficiary cost-sharing.

[Jeanne: How do you think the "ScooterStore" pays for all those ads about "almost free" mobility scooters? Overpricing and cheating Medicare is how.... Five years ago, two years before the passing of my 93-year old father, we finally decided that one of these "mobility scooters" would help him as he was increasing unable to get around the assisted living facility near us where he was living. After consultation with his physician (who at first suggested some physical therapy suggesting that getting him a "scooter" might backfire with reduced dexterity and muscle usage of his walker, he wrote us a prescription and we went out to check prices. Long story short, the very same, identical scooter at the ScooterStore cost almost $800 more than the one we found through shopping around on the Internet, $1,200 versus almost $2,000. Dad's deductible was around $200 and he had his scooter. He loved it, his only problem it wasn't "fast enough" for him to win any of the "scooter races" he and a few other residents at the ALF held regularly. He wanted a "hotter" scooter. <smile> But the lesson was learned ... how many of these DME-suppliers make their bucks.]

Except for the nine metro areas that have competitive bidding, Medicare pays for equipment under a fee schedule for covered items. The agency regards this as inadequate, outdated and vulnerable to abuse. Under the nine-metro area demonstration, CM² awarded 1,217 contracts to 356 suppliers, director of the chronic care policy group for Medicare, Laurence D. Wilson said.

Wilson said that the program in just nine markets came up with $202 million in savings in its first year, a figure that also has been touted by other CM² officials and one that makes it tough for lawmakers to try for repeal or change. Competitive bidding is now in place in Riverside, San Bernardino, and Ontario in California; Miami, Fort Lauderdale, Pompano Beach, Orlando and Kissimmee in Florida; Kansas City in Missouri and Kansas; Charlotte, Gastonia, and Concord in North and South Carolina; Cleveland, Elyria, Mentor in Ohio, Cincinnati and Middletown in Ohio; Kentucky, and Indiana; Pittsburgh; and Dallas-Fort Worth and Arlington in Texas.

Next year bidding will be expanded to 91 metro areas, and will include more than half of all Medicare beneficiaries. Kathleen M. King, director of health care for the GAO, told the subcommittee that the investigating agency looked at claims data for the first six months of 2011 because it was the most complete. GAO found that CM² had terminated few supplier contracts and that not many contractors had voluntarily canceled them. In addition, the number of calls about supplies from beneficiaries to a Medicare hotline declined. A CM² survey of beneficiaries found that 90 percent reported their equipment service as being "good" or "very good."

Nonetheless, with just one year of experience it is too soon to determine the full effect of the competitive bidding program, King said. Although in general, the first round was "successfully implemented," that was based on limited data, she said. In addition, the number of non-contract suppliers who were grandfathered in to the bidding program will continue to decrease over time as their rental contracts run out. It is not clear if they will try the bidding process. Therefore, "more experience is needed" before drawing any definite conclusions, King said.

Some DME suppliers want it gone. H. Wayne Sale, chairman of the National Association of Independent Medical Equipment Suppliers, said the current bidding program should be repealed and replaced with a "market pricing program" created by auction experts.

[Jeanne: Yes, the same-type of "market experts" that are used to set corporate CEO salaries and bonuses ... you know the ones, paid for by the industry and beholden to the very same people who might benefit by their decisions ... you know the Koch brothers-type "free marketers" who controlled the nation's economy into the greatest recession since the 1930's.]

May 10, 2012: Primary Care Doctors Who Treat Medicaid Patients Get a Two-Year Boost

Primary care physicians will receive reimbursements for Medicaid equal to what Medicare pays in a two-year "fix" mandated by the health care law, Health and Human Services officials said this week. The increase will apply to Medicaid services provided in calendar years 2013 and 2014, and will go to family practice physicians, pediatricians and other practitioners of family medicine, as well as some primary care sub-specialties such as neonatologists.

This could be a significant increase for many doctors. States set Medicaid provider reimbursement rates, and primary care practitioners currently are paid 66 percent of the Medicare rate on average, though the percentages vary from state to state, Centers for Medicare and Medicaid Services (CM²) officials told reporters in a conference call.

Cindy Mann, deputy administrator at CM², said that the $11 billion, two-year boost in reimbursements will be entirely paid for by the federal government rather than the state-federal sharing that generally is the practice for Medicaid. One of the key goals of the "Obamacare" health care law (PL 111-148, PL 111-152) is to emphasize primary care, and the increased payments are an example of that, even if they will only last two years, Mann said.

The reimbursement increase was included in a proposed rule recently published by CM².

Roland Goertz, board chairman of the American Academy of Family Physicians, who was on the call with Mann, said that family doctors know that people who don't have access to care put off health needs, and then a simple problem can become complicated. Two-thirds of the members of his academy continue to accept Medicaid patients even though the payment rates are low, he said. "We can't continue to depend on the good will of physicians who continue to provide care for less than the cost of that care," Goertz said.

Asked if doctors will seek to extend the temporary pay increase just as they have tried to avert scheduled reimbursement cutbacks under the Sustainable Growth Rate, Mann said that officials will be reviewing the results of the two-year change and whether the pay boost has provided a clear improvement in health care.

Said Goertz: "We're ready to lobby for what's right for improving the system."

Overall, the pay increase is projected to cost the government $5.7 billion in calendar year 2013 and $5.9 billion in 2014, CM² says. Unless Congress provides additional money, the higher rates for primary care providers would end after 2014. Individual states could, however, choose to maintain the higher reimbursements.

Senatecritter Orrin G. Hatch of Utah, ranking Republican on the Senate Finance Committee, criticized the rule in a statement this week.

"It's nonsensical to think a temporary, two-year bump in pay will actually attract and retain doctors to the Medicaid program unless the White House thinks Congress will keep extending these higher payment rates in perpetuity,'' ... "Every year, Congress has to stop Medicare physician payment rate cuts and this proposed regulation will now create the same dilemma under the Medicaid program. When that rate drops back down after 2014, what will happen to the health care Medicaid beneficiaries receive? Or is this just another budget gimmick to hide the true cost of the President's $2.6 trillion health law?"

[Jeanne's Note: One has to admire the chutzpah of Senatecritter Hatch ... long gone are his days of working across the aisle with the late Ted Kennedy in the "Hatch-Kennedy" "Serve America" legislation ... as the only formerly "moderate" Republican senatecritter to survive the the TeaParty takeover of the GOP ... he has embraced his TeaParty credentials with great gusto.]

As the nation moves toward full implementation of the health care law in 2014 and the expansion of eligibility for Medicaid to all adults under 133 percent of the federal poverty level, "it is critical that a sufficient number of primary care physicians participate in the program," the rule says.

And given the cuts in Medicaid funding proposed under the Romney-endorsed House TeaParty/Republican "Ryan plan," Medicaid coverage for the nation's poor would be cut by nearly half ... one might ask, where will these people get care? Or, as the crowd yelled during one of the GOP debates: "Let them die!"

May 9, 2012: National Debt by President

... posted because too many people are not getting their facts straight watch Fox News,

May 9, 2012: State Insurance Exchanges Need to Narrow Choices but Strengthen Them

Obamacare says that states may establish "exchanges" through which, at least initially, individuals and small groups can buy health insurance that meet the requirements of the new law. But states should use their new insurance exchanges to narrow down the number of plans consumers can choose from, according to an analysis published in the journal Health Affairs.   The article says states should follow Massachusetts’s example as they create their exchanges. A hands-on exchange with the power to set standards on top of the federal healthcare law will help prevent consumers from being “overwhelmed” by the process of buying insurance, the authors wrote.

The lead author of the Health Affairs piece is Rosemarie Day, a former deputy director of Massachusetts’s exchange. The state established its own exchange as part of then-Gov. Mitt Romney’s 2006 healthcare law, which formed the basis for President Obama’s 2010 reforms. Day said consumers in Massachusetts preferred choosing from a handful of carefully vetted, clearly described healthcare plans. She said there is less evidence for the model used in Utah, where any plan that meets certain minimum standards can participate in the exchange.

States have looked to the dueling examples of Massachusetts and Utah ... the only two states with exchanges that predate the Affordable Care Act ... as they try to decide how best to structure their new marketplaces.

Conservatives favor the Utah model, which places almost no regulatory pressure on enrolling health insurers, while consumer advocates say exchanges should be “active purchasers” that have the power to negotiate directly with insurers.

Massachusetts’s experience shows that consumers prefer an active purchaser model, even though it could limit their choices, Day wrote. “Findings from consumer research emphasized the value of limiting insurance plan choices on the exchange,” her analysis states. “Specifically, early focus groups showed that consumers wanted four to six carrier options at ‘low, medium, and high’ benefit levels.”

Consumers said they were anxious about the complicated process of choosing an insurance policy, and reported that they felt “overwhelmed” by the marketplace outside of a structured exchange, according to surveys the Massachusetts exchange conducted.

“Consumers valued having a range of options to choose from but also wanted the ability to obtain detailed information and were suspicious of apparently hidden information,” Day wrote, with co-author Pamela Nadash, a professor at the University of Massachusetts, Boston.

[Jeanne's Note: For many years in my presentations I used the analogy of "death-anticipation insurance" as an example of the problems presented when average Americans (given our nation's education system <sigh>) are confronted by choices related to purchasing insurances. "Death-anticipation insurance" is the insurance industry's insider description for the type of insurance mainly marketed to seniors, frequently door-to-door, sold to individuals who may looking at a possible death in the near future. It is marketed usually questionable sales tactics, relying on fear and lots and lots of small print. It is considered by experts to be one of the worst choices for seniors as the front end expenses, coverage limitations and waiting periods frequently undercut any benefit for the dollars expended. I used the example of "Veteran's Life" which used to run late evening cable TV spots that went something like this:

"Maude and Mabel are sitting in the kitchen over cups of coffee, when Maude says ... 'When Claude died last month, it took almost my last dollar to bury him.' To which Mabel responded, 'When Abel died a year ago, we had Veteran's Life and all the expenses were covered.'"

As it turns out Veteran's Life would sell its policies to veterans, their families, anyone who had ever met a veteran, anyone who had ever watched a John Wayne war movie ... no physical exam needed. But in the fine print came the details ... up to 24 months waiting period after purchase but with continuing premium payments; coverage limitations based upon the age of the insured, limiting pay-off in many cases to just a few hundred dollars ... and months and even years between filing a claim and any actual pay-out. Oh sure, if the insured died before the waiting period, Veteran's Life would eventually refund all premiums, paying no interest and deducting a small "management" fee. The "veteran" and his/her family would have been better off putting the premiums into an interest-bearing savings account to pay the funeral expenses.

Likewise Medicare's experience BEFORE the law was amended to regulate the offering and sale of supplemental "Medi-Gap" coverage necessary when beneficiaries discovered all the holes in the Medicare program, first dollar payment requirements, co-pays and deductibles. Medi-Gap insurers sent their sales staffs out to prey on seniors, in many cases selling multiple, redundant policies to sweet little old ladies... as one witness at Congressional hearings at the time was quoted as saying about the agent who had sold her over two dozen policies, "But, he seemed like such a nice young man."

So too today with Medicare Advantage, when during the late year one-month enrollment period, seniors are deluged with TV spot ads, mailers and phone calls (many illegal) trying to enlist them to buy a coverage plan ... which in many cases wouldn't cover what might be ailing them, would force them to change primary care physicians and to stand on-line for weeks and even months to get appointments with "in plan specialists" ... (so much for those reputed "terrible lengthy" waiting periods in Canada; U.S. seniors in MA plans today often find themselves waiting months to see a specialist under their "private" non-government Medicare plans.)

We can only imagine what it will look like come 2022 when the Romney-Ryan Medicare privatization plan kicks in and seniors will have to "buy" their Medicare (with fewer dollars) from a plethora of private, profit-seeking, investor-owned insurance companies, with little or no regulatory oversight from TeaParty/Republicans who think that sort of thing is a bad idea.

May 8, 2012: Obamacare Saves Medicare ... the Medicare We All Know and Love

May 7, 2012: Facts: Don't Let Them Get in the Way

May 6, 2012: Health Care Increasingly Out Of Reach For Millions Of Americans

Having trouble finding a doctor?

Well according to the Kaiser Family Foundation, you’re not alone. Tens of millions of adults under 65 ... both those with insurance and those without ... saw their access to health care dramatically worsen over the past decade, according to a new Health Affairs study to be released on Monday. The findings suggest more privately insured Americans are delaying treatment due to rising out-of-pocket costs, while safety net programs for the poor and uninsured are failing to keep up with demand for care, say Urban Institute researchers who wrote the report.

Overall, the study to be published in the journal Health Affairs found one in five American adults under 65 had an "unmet medical need" because of costs in 2010, compared to one in eight in 2000. They also had a harder time accessing dental care, according to the analysis based on data from annual federal surveys of adults.

"For decades, Americans have been facing costs rising well above wage levels," said Lynn Quincy, senior policy analyst for Consumers Union, a nonpartisan group. "These are real families. … It’s very concerning."

President Barack Obama’s health law, which will expand health coverage to 30 million people starting in 2014, won’t necessarily solve all those access problems, the study says. That’s because the law, which is under review by the Supreme Court, may not alter the trend toward private insurance policies with larger deductibles and higher co-payments or address some of the barriers within public coverage. While the law does increase payments temporarily to primary care doctors who see people covered by Medicaid, it will not force more doctors into the program, or require states to provide dental coverage to adults.

Quincy noted the law does offer several new strategies such as new payment methods to control rising costs ... which could help improve access, but there’s no guarantee they will work.

The study underscores what’s at stake in the law’s coverage expansion: People with private or public health insurance have significantly better access to care than the uninsured. If the law is overturned or scaled back, “we would be likely to see further deterioration in access to care for all adults ... uninsured and insured alike,” it concludes.

‘Unmet Needs’ Increase For Privately Insured

The percent of adults with private insurance who reported an "unmet medical need" doubled to 10 percent from 2000 to 2010, while those who delayed seeking care due to cost rose from 4 percent to 7 percent in the same period, according to the study.

Genevieve Kenney, lead author and senior fellow at the Urban Institute, speculated that higher cost sharing and deductibles that shift more of the cost onto individuals could be driving those changes. Several studies have found that privately insured Americans are spending a higher proportion of their income on health services, said Peter Cunningham, senior fellow at the nonpartisan Center for Studying Health System Change.

One analysis by the consulting firm Milliman showed health costs for an American family of four have more than doubled since 2002.

"As employers shift more costs onto workers, that is something we are going to continue to see,” Cunningham said. For insured Americans, a shortage of doctors in some parts of the country was a factor, but not as important as cost, he said.

An increasing number of consumers are also facing delays finding a primary care doctor when they are sick because physicians leave less room on their schedules for walk-ins, said Arthur Kellermann, director of the research firm Rand Health. To make more money, physicians prefer to fill their days with quick turnaround type patients, such as those with chronic illnesses that need regular monitoring, he said.

'Stressed And Worried'

Poor and uninsured adults had greater difficulties not just with health care costs, but finding doctors who would see them.

About one third of 41 million uninsured adults delayed getting care due to costs in 2010, compared to 25 percent in 2000, the study found. Nearly half the uninsured said they had an unmet medical need in 2010, up from 33 percent in 2000.

The uninsured who had a “usual source of care,” such as a family doctor or community health center, fell to 38 percent in 2010 from 44 percent in 2000. The finding was startling given the billions of additional federal funding to community health centers over the past decade, Cunningham said.

The study found that among adults getting care through public programs (more than two-thirds were enrolled in Medicaid, the state-federal insurance program for the poor) 26 percent said they had an unmet medical need in 2010, up from 20 percent in 2000. About 19 percent experienced delays getting care due to non-cost factors in 2010, up from 14 percent in 2000. Nearly one in four people in public programs in 2010 had an unmet dental need, up from 15 percent in 2000.

The problems indicate that too few providers are taking Medicaid and an increasing number of states are dropping dental coverage ... which is an optional benefit, Kenney said.

The American Medical Association, which has backed Obama’s health law, said the study findings were not surprising. "The ability for patients to access medical care is fundamental to the success of our health care system, since without timely health care access the uninsured live sicker and die younger," said Dr. Peter W. Carmel, association president.

Rand’s Kellermann noted that even as the nation’s total health care bill doubled in the past decade to $2.6 trillion, many Americans had difficulty getting treated.

"We’re paying more and more and getting less and less," he said.

Asked if there was any good news in her report, Kenney said that in contrast to adults, millions more children gained access to care in the past decade, likely due to the availability of public coverage for children through Medicaid and CHIP. The study found the percent of children who had been to a doctor in the past year rose to 92 percent in 2010, from 89 percent in 2000.

May 5, 2012: Stage 2 Debate Heating Up Over CM² Payments for Health IT

The enforcement of federal rules written to prod doctors and hospitals to adopt health information technology (IT) is attracting wide scrutiny, with congressional auditors worried that Centers for Medicare and Medicaid Services (CM²) officials are too lax and providers and their allies saying the requirements are too tough.

A Government Accountability Office report released this week says that the rules create a complex system of financial rewards and penalties for using the technology. That complexity increases the risk that CM² will make improper Medicare and Medicaid payments relating to health IT.

"CMS could take steps, beyond those already taken, to assess and mitigate the risk of improper payments and to improve program efficiency," said the report. GAO said, for example, it is "encouraging" that CM² has awarded contracts to evaluate how well states are adopting electronic health records in Medicaid. But the report complains about the lack of a CM² timeline to review the agency's audit strategy for the Medicare electronic health records program.

Temperature Rising

Meanwhile, hospitals and doctors are objecting to a CM² proposal that aims to increase the use of health IT to make care more efficient. But IT vendors and consumer groups are pushing back against provider objections. IT's promise won't be realized if CM² caves, they assert.

At issue is the CM² "stage two" proposal for "meaningful use" requirements, whose comment period ends May 7.

Stage one got many providers to buy IT systems and begin using them to record patient information and some data on clinical performance measures. But CM² wants providers to report data on more measures in stage two. It also wants to spur the ability of hospitals to exchange medical information with unaffiliated doctors's offices that use different IT systems. The idea is to create an "interoperable" system where different computer systems talk to one another and providers throughout a wide area can easily share medical data.

She Said, They Said, They Said

But stage two goals "may be too ambitious for some small or solo practice physicians to meet," said Housecritter. Renee Ellmers, R-N.C., chairwoman of the Small Business Subcommittee on Healthcare and Technology. She said that doctors are worried about Medicare payments reductions scheduled for 2015 for physicians who don't demonstrate meaningful use of health IT. "I urge you to allow hardship exemptions for very small practices," Ellmers said in a May l letter to CM² Acting Administrator Marilyn Tavenner.

Hospitals argue that the stage two rules imperil widespread adoption of health IT. "Taken as a whole, the proposed requirements for meeting stage two raise the bar too high and are not feasible for the majority of hospitals to achieve," the American Hospital Association (AHA) said in an April 30 letter to CM².

The 68-page comment letter says when it comes to complying with meaningful use requirements, "the rushed timelines and complex regulatory requirements make the process difficult." Costs are large, it adds, estimating that "hospitals spent $57,000 a year per bed on IT in 2010."

However, patient advocacy groups are worried about AHA's power to pressure CM² to water down the regulations. "With the deadline looming, one of the powerhouses in the health care provider community has made public its displeasure with a number of the most robust and important patient-engagement criteria," said Christine Bechtel of the National Partnership for Women and Families, referring to the AHA letter. "In fact, leaders of this organization made their views known with such vehemence that their views should be characterized as hostility," Bechtel added.

She chided AHA for urging that hospitals be given more time to give patients web access to medical information relating to a hospital stay.

The stage two proposal says patients should have access to that information within 36 hours of being discharged. But Bechtel says AHA wants hospitals to have up to 30 days "for access to such basic, crucial and highly time-sensitive information as discharge instructions, medication lists, lab test results and care transition summaries."

She adds that "this is the very information that can help keep patients from being readmitted unnecessarily. No patient in this day and age should have to wait a full month for access to their own health information, which is vital to their ability to get and stay well."

Another concern relates to a proposed requirement that hospitals to be able to transmit electronically a summary-of-care record when a patient is transferred or referred to another provider that has an electronic health record system from a different vendor. At least 10 percent of summary-of-care record transmissions in these cases should be performed electronically with outside organizations that use different electronic health record systems, CM² is proposing.

AHA says this requirement would create an unreasonable burden because providers "would need to count transitions, track the organizational affiliations of the recipients, and track the vendors used by the recipients."

The Health IT Now coalition says this is one of the few provisions in the stage two proposal that would begin laying the groundwork for the widespread sharing of medical information, which is critical to achieving IT's potential for making care safer and more efficient, it adds.

"We believe these standards are achievable and that more must be done to promote the exchange of information to better coordinate patient care," said Joel White, executive director of the coalition. "We will encourage HHS to take steps in that direction."

May 4, 2012: Accountable Care Organizations: The Beginning of the End to "Fee-for-Service" Health Care

The Kaiser Family Foundation has a new analysis of Accountable Care Organizations

A radical change just getting underway in the U.S. health system could transform how medical treatment has been paid for since Hippocrates made his first house call. But the new payment method faces conflicting dangers: either it won't be strong enough to upend entrenched incentives or it will be so successful it will prove too politically disruptive to survive.

The "accountable care organization" replaces the idea of reimbursing individual doctors and hospitals by procedure with a lump-sum payment to clinicians working as a formal ACO team. Under the terms of the Obamacare, the Patient Protection and Affordable Care Act, a Medicare ACO agrees to be responsible for all the care needs of a group of patients and to be paid based on those patients' health outcomes, satisfaction and costs.

The federal government recently announced that Medicare ACOs are now serving more than a million elderly Americans in locales as diverse as Los Angeles County, the Mississippi Gulf Coast and New York City's Chinatown. That number is expected to at least triple by year's end. At the same time, most major insurers are also experimenting with ACOs, leading to a potentially powerful convergence.

"This is a vast change," said Dr. George Lundberg, editor-at-large of MedPage Today and former editor in chief of the Journal of the American Medical Association. "It is a credible way to move the health-care system."

But as Lundberg and others caution, that credibility will be tested as ACOs move from concept to reality.

The drawbacks of fee-for-service reimbursement are hardly secret. In 1909, the playwright George Bernard Shaw wondered why "any sane nation, having observed that you could provide for the supply of bread by giving bakers a pecuniary interest in baking for you, should go on to give a surgeon a pecuniary interest in cutting off your leg." A century later, McKinsey Global Institute identified "payment for more care rather than more value" as one reason U.S. medical spending is more than 25 percent higher per person than even in other industrialized nations.

ACOs explicitly target the "value versus volume" problem. In an ACO, a group of physicians and a hospital share clinical and financial responsibility for providing all care needed by a group of patients whether in the hospital or outside it. Rather than each procedure propping up the bottom line, the partnership prospers by keeping patients healthy and meeting clinical and cost-effectiveness goals. The intent is to reward quality, not quantity, of care.

ACOs differ in important ways from the last two major attempts to infuse cost-consciousness into American medicine. In the mid-1980s, with Medicare in crisis, Congress changed how hospitals were paid. The old "cost-plus" system, giving every hospital a guaranteed profit margin, was replaced by a "prospective payment system," in which Medicare would pay a flat fee set in advance and based on each patient's diagnosis, not each hospital's costs. Following that change, the average length of a Medicare hospital stay plunged, and virtually ALL private insurers adopted the same payment model.

President Lyndon Johnson signing the original Medicare law on July 30, 1965, with former President Harry Truman looking on.

Johnson had "sold the farm" in the process of getting Medicare enacted in 1965 ... hospitals were to be reimbursed for services on a "cost-plus" basis and physicians for their "usual and customary fees" .. for the providers this was a definite Win-Win situation and their opposition was minimum. But by 1983, the situation had changed, and Congress recognized the need for more controls. The first steps in changing to "prospective payment" were introduced by President Ronald Reagan ... diagnostic-related groupings (DRGs) for hospitals and "relative-value scales" (RVS) for the docs.

In the mid-1990s, health maintenance organizations and other private insurers moved to more restrictive managed care contracts using a variety of fixed payment schemes meant to push providers to reduce unnecessary care, or lose money. At the height of managed care's influence, the average rate of health insurance premium increases dropped to less than a third that of both general inflation and workers' raises.

Both victories proved short-lived.

With Medicare, there was a backlash against patients being discharged "quicker and sicker" that subsided when initial anecdotes proved overblown. Still, hospitals soon found ways to move care to the outpatient setting or other places where prospective payment didn't apply.

With managed care, the backlash was more sustained. A spate of horror stories attributed to sharp cutbacks in genuinely needed care ... such as new moms being discharged within 24 hours, ready or not ... sparked a political uproar that ultimately persuaded insurers to loosen the rules.

ACO advocates have tried to learn the lessons of both too tight and too loose controls. For example, the "alternative quality contract" designed by Blue Cross and Blue Shield of Massachusetts, considered a model for ACOs, addresses the cost-shifting that allowed facilities to work around prospective payment by including inpatient and outpatient treatment, pharmacy and behavioral health. At the same time, to protect providers from feeling unfair financial responsibility, the contract includes adjustments for factors such as general inflation and how healthy a particular group of patients has been. Unlike prospective payment or managed care, ACOs also include a long list of rules meant to balance cost-containment incentives. Medicare requires ACOs to be run by hospitals or doctor groups – not insurers – and beneficiaries can seek care outside the ACO without financial penalty. Moreover, the government has mandated 33 publicly disclosed quality measures related to care coordination and patient safety, preventive health services, at-risk populations and the patient experience of care.

"You don't get paid a dime if you don’t hit the quality metrics," said Donald Fisher, president of the American Medical Group Association, a strong proponent of the concept.

Hopes run high. In a recent blog post, Lundberg wrote that ACOs could help "build a new medical world based less upon … lucre, and more on … outcomes" such as keeping patients healthy and treating illness effectively. Providers would no longer profit from catering to the "worried well."

But the potency of that profit potential is exactly what concerns ACO skeptics. Establishing a Medicare ACO is voluntary and current financial rewards are modest, mostly due to fears that larger financial incentives might trigger accusations of "rationing" at a time when the political consensus for innovation is fragile. That raises the question of why providers should forego fee-for-service until forced to do so.

Lawrence Casalino and Stephen Shortell, two well-regarded academics, note that under the largest Medicare ACO program, "even an efficient, high-quality ACO will gain less money from sharing in savings than it would have earned if it had simply continued with business as usual."

Going forward, the balance of ACO risk and reward will be crucial. Even if the health reform law is overturned, the concept has had bipartisan political support. Moreover, the Medicare fee schedule for physicians and prospective payments to hospitals is failing to keep pace with medical inflation, even though Congress staved off a 27 percent reduction in physician fees that had been scheduled for March 1. In this continued era of fiscal austerity, Medicare can either pay all providers less and less money for all the care they give or slow costs by paying an adequate reimbursement to doctors and hospitals providing high-value care. That's where ACOs come in.

"The system cannot and will not pay what it has in the past," said economist Michael Chernew, a professor of health care policy at Harvard Medical School. "The boat is sinking, and they've built a reasonable life raft."

Chernew says an ACO-type contract allows providers to reap the benefits from providing more efficient and effective care. That's one reason he believes ACOs are now being offered by even high-profile and prosperous organizations, such as Harvard-affiliated Partners HealthCare System.

Medicare has authority to create incentives for all providers to join ACOs without having to go back to Congress for permission. That's unusual. "If it works, it's easy to expand," said Andrew Croshaw, a partner in the health care practice of Leavitt Partners.

And if that indeed happens, says AMGA's Fisher, "this is the beginning of the end" of fee-for-service medicine.

Pay-for-Performance

May 3, 2012: Explaining High Health Care Spending in the United States: An International Comparison of Supply, Utilization, Prices, and Quality

The Commonwealth Fund has issued a new report that is must reading, essentially it says, the U.S. spends far more than any other country and it isn't getting its money's worth.

Overview

This analysis uses data from the Organization for Economic Cooperation and Development and other sources to compare health care spending, supply, utilization, prices, and quality in 13 industrialized countries: Australia, Canada, Denmark, France, Germany, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States. The U.S. spends far more on health care than any other country. However this high spending cannot be attributed to higher income, an older population, or greater supply or utilization of hospitals and doctors. Instead, the findings suggest the higher spending is more likely due to higher prices and perhaps more readily accessible technology and greater obesity. Health care quality in the U.S. varies and is not notably superior to the far less expensive systems in the other study countries. Of the countries studied, Japan has the lowest health spending, which it achieves primarily through aggressive price regulation.

May 3, 2012: The Romney-Ryan Plan for Medicare Won't Work, Says Man Who Designed It

The Premium-Support Program as Envisioned by Romney-Ryan is More Costly

The co-creator of the concept that Rep. Paul Ryan (T-Wis.) is relying upon to reform Medicare no longer thinks it will work. Henry Aaron, now of the Brookings Institution, got the chance to tell Ryan exactly why at a recent Capitol Hill hearing. Aaron and former Urban Institute president Robert Reischauer came up with the idea of "premium support" in 1995, after the failure of then-First Lady Hillary Clinton's bid to reform the health care system. The basic idea is simple: let people pick their health insurers in the private market, subsidize the premiums, and competition will drive down costs. That's the theory behind Ryan's plan, which has been enthusiastically endorsed by Mitt Romney, the putative GOP-presidential nominee. It differs from Aaron's original vision ... in part because it has fewer protections for beneficiaries ... but the essential concept is the same. Aaron said this isn't the time to test it out.

"In the years since Bob Reischauer and I put this Idea forward, I've changed my mind," Aaron said at a heari ng of the House Ways and Means Committee last week.

The big reason is that Aaron has seen no evidence since the two men came up with the idea that their assumptions have been borne out. A key assumption was that the insurance industry or government would figure out how better to adjust risk among companies so that if one insurer suddenly was saddled with an unusually expensive population, it would share the costs with other insurers or the government. That would keep costs down because it removes some of the incentive to cherry-pick healthier customers or shun sicker ones.But in the case of Medicare Advantage, similar to premium support in that Medicare pays a private insurer to cover someone, the attempts at risk adjustment have raised costs by about 8 percent, Aaron noted. On top of that, although there are many Medicare Advantage plans in existence, they are not cheaper than traditional Medicare, and there's little to suggest they will get cheaper.

CHERRY-PICKING IN HEALTH CARE:

A Problem Now for Medicare Advantage:

Exacerbated to the Nth Degree By Romney-Ryan

A study publishedin the New England Journal of Medicine finds that a growing number of health insurers are trying to recruit younger and healthier beneficiaries into their Medicare Advantage programs by offering fitness club memberships:

The study found 35.3 percent of new enrollees in a fitness membership benefit plan reported “excellent” or “very good” health, compared with 29.1 percent in the group without the benefit. The number of plans offering the memberships rose to 58 in 2008 from 4 in 2002, the researchers said.

The five largest insurers are looking to expand their roles in offering government-subsidized health plans as the number of Americans covered by them grows under Obamacare. In doing so, the companies may try to “cherry pick” members who are more likely to be healthy using the fitness memberships, said Amal Trivedi, an assistant professor of community health at Brown University in Providence, Rhode Island, and the author of the New England Journal report.

Gym memberships are certainly a good preventive benefit for some beneficiaries, but they also allow insurers to skim the cream off the top and attract the healthiest and most profitable risk pool, leaving older and sicker seniors in traditional Medicare. That is precisely the problem with the Romney-Ryan Medicare premium support proposals. It is very difficult, from a policy standpoint, to counteract private insurers’ market-driven desire to maximize returns (by trying to keep out sick and expensive applicants) with existing risk adjustment mechanisms. They are clearly less than fully effective in preventing cherry picking and any Medicare proposal that does not level the playing field by requiring companies to offer standardized benefits and preventing too much variation is asking for a serious adverse selection problem.

One of the problems with the 1993-94 Clinton health care reform effort legislation was its attempt to "regulate" this cherry-picking or adverse selection ... greatly expanding the role of the federal government and leading to allegations of government-control of health care. Obama has tried to avoid this same problem with "Obamacare" ... but with only limited success. The unfettered, unregulated private health insurance industry continues to deceive the American electorate ... and we have seen nothing but double-digit rate increases in health care costs annually, with the burden for the very sick falling primarily on Medicaid, CHIP and Medicare, while the "profits" (and corporate bonuses) in the for-profit health insurance industry have gone into the billions.

Trust me, (I'm a lawyer), there is a reason private Medicare Advantage plans host "enrollment dinner parties" in high-end/high-rent retirement communities (see "Sun City, et al.), and not in the inner city. They know the zip codes and poor areas are not given the same promotional push ... after all "poor people" live in these other areas, and "poor people" are often poor because they are sick. The fewer sick people who enroll, the more money they can make.

Romney-Ryan Makes Things Worse

"The evidence to date is not encouraging," Aaron said, noting a recent study that isolated the effects of competition on Medicare Advantage costs from government-related influences. "After controlling for all those factors, Medicare Advantage plans are more expensive than is traditional Medicare."

Aaron has not abandoned the idea of premium support for Medicare, if it can be figured out. He argued that rather than trying to do it right away, as Ryan and other proponents insist, policymakers should first see how it works for younger people ... as it is beginning to be applied in the health care reform law.

"The passage of the Affordable Care Act means we have put in place a key element of the premium support idea for the rest of the population, namely health insurance exchanges," Aaron said. "The Medicare population is vastly more difficult to deal with than the population under the Affordable Care Act. We should prove that the health insurance exchanges work, get them up and running before we take seriously, in my view, calls to put the Medicare population through a similar system."

Aaron also has a major problem with the way the Romney-Ryan plan fails to contain health care costs ... by mandating that Medicare inflation be capped at no more than the growth of the Gross Domestic Product, plus 0.5 percent or 1 percent. Health care costs have escalated much faster than that, so premium support plans capped at a little more than GDP growth would buy smaller and smaller benefits.

Aaron also argued that there's another problem with trying to ensure a premium support model works ... it requires stringent regulation to make sure companies don't game the system. Aaron said he can't see that happening with a TeaParty/GOP Congress fired by anti-regulatory zeal.

"The regulatory climate has changed," Aaron said. "It is far more hostile to the kinds of regulatory intervention that Bob Reischauer and I thought were essential."

Aaron's full testimony is here.

May 3, 2012: Report Shows Damage That Repeal of Obamacare Would Inflict on Women

A new report from the Center for American Progress (CAP) examines the positive impact the Patient Protection and Affordable Care Act ({"Obamacare" for all you troglodytes) has had for women and the consequences that might follow if the Supreme Court were to overturn the law.

The Supreme Court should not overturn the law both because Obamacare is clearly constitutional and it would disrupt the entire U.S. health care system. Opponents of the law seem to have ignored the law’s profound impact on women. Here is a rundown from CAP

While the full report is a must-read, it is important to point out some of the benefits of Obamacare that women would lose immediately if the law was overturned:

Plans could no longer cover no-cost preventive care.

Coverage for contraception would no longer be required.

Maternity care wouldn’t be required to be covered under individual plans.

Women would continue to pay $1 billion more than men each year for the same coverage.

Women under 26 would lose coverage under their parents’ health care plans.

May 2, 2012: Medicare is NOT Going Bankrupt ... at Least Not Any Time Soon, Unless Obamacare is Repealed, Then it is Dead, Dead, Dead

Claims by some policymakers that the Medicare program is nearing “bankruptcy” are misleading. Although Medicare faces major financing challenges, the program is not on the verge of bankruptcy or ceasing to operate. Such charges represent misunderstanding (or misrepresentation) of Medicare’s finances.

Medicare’s financing challenges would be significantly greater without the health reform law (the Patient Protection and Affordable Care Act, or PPACA), which substantially improved the program’s financial outlook. Repealing "Obamacare," a course of action promoted by some who simultaneously claim that the program is approaching “bankruptcy,” would make Medicare’s financial situation much worse.

The 2012 report of Medicare’s trustees finds that Medicare’s Hospital Insurance (HI) trust fund will remain solvent ... that is, able to pay 100 percent of the costs of the hospital insurance coverage that Medicare provides ... through 2024; at that point, the payroll taxes and other revenue deposited in the trust fund will still be sufficient to pay 87 percent of Medicare hospital insurance costs. [1]

[Jeanne's Note: The Medicare hospital insurance program is considered insolvent when revenues and trust fund balances will not cover 100 percent of projected costs. Over the next 75 years, revenue will cover an average of 74 percent of Medicare’s hospital insurance costs. This shortfall will need to be closed through the provision of additional revenues, program changes that slow the growth in costs, or most likely both. But the Medicare hospital insurance will not run out of all financial resources and cease to operate after 2024, as the “bankruptcy” term may suggest.]

The 2024 date does not apply to Medicare coverage for physician and outpatient costs or to the Medicare prescription drug benefit; these parts of Medicare do not face insolvency and cannot run short of funds. These parts of Medicare are financed through the program’s Supplementary Medical Insurance (SMI) trust fund, which consists of two separate accounts ... one for Medicare Part B, which pays for physician and other outpatient health services, and one for Part D, which pays for outpatient prescription drugs. Premiums for Part B and Part D are set each year at levels that cover about 25 percent of costs; general revenues pay the remaining 75 percent of costs. [2] The trustees’ report does not project that these parts of Medicare will become insolvent at any point ... because they can’t. The SMI trust fund always has sufficient financing to cover Part B and Part D costs, because the beneficiary premiums and general revenue contributions are specifically set at levels to assure this is the case. SMI cannot go “bankrupt.”

Nonetheless, Medicare faces serious financing challenges in order to make the Hospital Insurance trust fund solvent over the long term and to reduce unsustainable federal budget deficits that are driven in part by Medicare’s rising costs. Major reforms in health care payment and delivery will be essential throughout the U.S. health care system, and Medicare will need to play an important role in leading the way to those reforms. A first step, however, should be to “do not harm” — that is, not make Medicare’s financing challenges even greater. Repealing the Affordable Care Act would do exactly that.

The Patient Protection and Affordable Care Act has significantly improved Medicare’s long-term financial outlook. Under the trustees’ main projection, the Medicare hospital insurance program faces a shortfall over the next 75 years equal to 1.35 percent of taxable payroll ... that is, 1.35 percent of the total amount of earnings that will be subject to the Medicare payroll tax over this period. This is much less than the 3.88 percent of payroll tax the actuaries estimated prior to the enactment of health reform. If health reform were fully repealed, as the TeaParty/Republican-controlled House of Representatives has voted to do, the Medicare hospital insurance program would become insolvent eight years earlier, in 2016, and the costs of SMI would be significantly higher and rise more rapidly in the years ahead.

WARNING: These projections underscore the importance of successfully implementing the cost-control provisions in the Patient Protection and Affordable Care Act. While history shows that most major Medicare savings measures have been implemented as scheduled, the Medicare actuary has expressed concern that some of the PPACA’s savings provisions may not be sustainable. The actuary urges reliance instead on an “illustrative alternative” projection for Medicare, which assumes that only 60 percent of the PPACA’s Medicare savings will actually be achieved in the long run. Under this alternative projection, the projected insolvency date of the Hospital Insurance trust fund remains at 2024, but the 75-year shortfall in the fund would rise to 2.43 percent of payroll, almost twice the trustees’ official estimate. This still is a dramatic improvement, however, over the outlook without the Patient Protection and Affordable Care Act.

The trustees’ finding that health reform has improved Medicare’s financial status is consistent with the Congressional Budget Office’s estimate that health reform will modestly reduce federal budget deficits. Medicare is a part of the federal budget. Therefore, spending cuts or tax increases that reduce projected deficits in Medicare also help reduce projected deficits in the overall budget. Consequently, contrary to some claims, no “double-counting” is involved .[3]

The trustees’ latest projections are broadly in line with those that the trustees have issued for some time. They do not represent a striking change in Medicare’s finances. Since 1990, changes in the law, the economy, and other factors have brought the projected year of Medicare HI insolvency as close as four years away or pushed it as far as 28 years into the future. The latest projection falls near the middle of that spectrum. Trustees’ reports have been projecting impending insolvency for four decades, but Medicare benefits have always been paid because Congress has taken steps to keep spending and resources in balance in the near term. In contrast to Social Security, which has had no major changes in law since 1983, the rapid evolution of the health care system has required frequent adjustments to Medicare, a pattern that is certain to continue.

Despite the financial improvements the Affordable Care Act makes, Medicare continues to face substantial long-term financial challenges, stemming from the aging of the population and the continued rise in costs throughout the U.S. health care system. The projected increase in long-term Medicare costs also contributes heavily to the challenging federal fiscal outlook. It is essential that policymakers take further substantial steps to curb the growth of health costs throughout the U.S. health care system as we learn more about how to do so effectively in both public programs and private-sector health care. The Medicare research and pilot projects that PPACA establishes should yield important lessons. Until these efforts bear fruit, it will be difficult to achieve big additional reductions in Medicare expenditures.

Some additional savings can be achieved over the next ten years, however, while preserving Medicare’s guarantee of health coverage and without raising the eligibility age or otherwise shifting costs to vulnerable beneficiaries. Possible measures include ending Medicare’s overpayments to pharmaceutical companies for drugs prescribed to “dual eligible” beneficiaries (people enrolled in both Medicare and Medicaid), improving the coordination of care for dual eligibles, increasing funding for actions to prevent and detect fraudulent and wasteful Medicare spending, raising cost-sharing charges for certain services (while protecting low- and moderate-income beneficiaries), and raising premiums for better-off beneficiaries. The Medicare Payment Advisory Commission (MedPAC) has also sent Congress a long list of savings options that could help offset the cost of repealing Medicare’s flawed sustainable growth rate (SGR) formula for setting doctor payments. [4]

Fiscal policy’s key goal should be to stabilize the federal debt relative to the size of the economy. But it is neither necessary nor desirable to accomplish this by radically restructuring Medicare — such as through “premium support” proposals that would convert it to vouchers whose purchasing power fails to keep pace with the cost of health care — or by severely cutting Medicare or other programs that protect Americans with low and moderate incomes.[5] Policymakers and the American public should not be driven into adopting such proposals by misleading claims that Medicare is on the verge of “bankruptcy.” Instead, we should pursue a balanced deficit-reduction approach that puts all parts of the budget on the table, including revenues.

[1] Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2012 Annual Report, April 23, 2012.

[2] Medicare also subsidizes the Part D premiums of low-income enrollees.

[3] Paul N. Van de Water, “Yes, Health Reform Strengthens Medicare And Reduces the Deficit,” Health Affairs Blog, April 20, 2012, http://healthaffairs.org/blog/2012/04/20/yes-health-reform-strengthens-medicare-and-reduces-the-deficit/.

[4] Medicare Payment Advisory Commission, Report to the Congress: Medicare Payment Policy, March 2012, http://www.medpac.gov/chapters/Mar12_AppB.pdf.

[5] Paul N. Van de Water, Medicare in the Ryan Budget, Center on Budget and Policy Priorities, March 28, 2012, http://www.cbpp.org/cms/index.cfm?fa=view&id=3731.

May 1, 2012: What Have We Gained and/or Lost After Two Years Under Obamacare?

... with most of the really BIG benefits not starting until 2014 ...

May 1, 2012: LAW DAY: Have You Hugged Your Lawyer Today?



April 30, 2012: High-Deductible (allegedly Consumer-Directed) Health Plans, Pros and Cons

High-deductible health care plans are no longer a novelty ... they are becoming mainstream. According to the industry trade group America's Health Insurance Plans, the number of people with this kind of coverage reached more than 11.4 million in January 2011, up from 10 million in January 2010.

They are the leading cause of one of the nation's least reported, least understood and fastest-growing problems … the UNDERINSURED! Ask any hospital business office manager and they will tell you legions of stories about patients arriving at the hospital and presenting “evidence” of insurance … and then, when faced with several thousands of dollars in “deductibles and co-pays” that have to be paid, they default, frequently into bankruptcy, leaving the hospitals and doctors holding the bill. Yes, they provide “premium relief” for generally healthy and wealthy (who can take advantage of the tax sheltering aspects) patients, but don’t have an accident, keep your kid from falling out of a tree, and definitely … don’t get really sick! The deductibles will kill you if the illness doesn’t.

A survey from the Kaiser Family Foundation found that about half of all workers in "small" businesses (up to 199 workers) who have health insurance have these plans. (KHN is an editorially-independent program of the foundation.) Here is a brief guide to this type of health insurance:

These plans are generally defined as insurance policies with lower premiums and a hefty deductible – the amount you have to pay before the insurer picks up any of the cost. Federal rules require these plans to have deductibles of at least $1,200 for an individual and $2,400 for family coverage for 2012.

Another term for these is "consumer-directed health plans."

Because of the health law, even high-deductible plans are now required to cover, usually for free, basic preventive services such as vaccinations and wellness exams.

Consumers and employers like the cost control that comes with the plans—because the premiums are lower than standard insurance premiums – on average, $1,000 to $2,000 per year.

Even with the high-deductible, patients' out of pocket costs are capped at $6,050 for an individual and $12,100 for a family. Out-of-pocket costs generally include the deductible, the patient's share of the cost of seeing a doctor, prescription medicines and/or hospital costs.

Health savings accounts (HSAs) sometimes accompany high-deductible plans. These accounts allow beneficiaries to contribute, tax-free, up to $3,100 for an individual and $6,250 for a family.

The money inside the health savings account belongs to the consumer. Funds left over at the end of the year are rolled over to the next year. If an employee changes jobs, the HSA stays with that individual. Some employers make tax-free contributions to their employee's HSA.

Health policy experts say the popularity of high-deductible plans is the byproduct of the steep rise in health costs. A RAND study notes that high deductible plans, especially those associated with HSAs "create a strong financial incentive for the employee to manage health care costs carefully, because the account balance is owned by the employee." Deborah Chollet, a senior fellow at Mathematica Policy Research Center in Washington says that consumers "tend to be young, healthy males who [generally] avoid the health care system and only go to the doctor when necessary."

The plans are problematic for low- and middle-income individuals, especially those with chronic conditions, such as diabetes. Paul Fronstin, of the Employee Benefit Research Institute, says HSAs/high-deductible plans have a "straitjacket design" in which consumers are responsible for paying the full-dollar amount of their medical expenses until they meet their deductible. People with health problems can have the toughest time meeting the deductible, because their illnesses can keep them from working.

The IRS determines what medical expenses qualify toward the deductible. Recently, the IRS dropped over-the-counter medications from its list.

April 30, 2012: April 29, 2012: Conflicts Arise As Health Insurers Diversify

For-Profit health insurers, eager to squeeze even more bucks out of the industry, are diversifying ... buying up "health care service companies," ... and in the process creating major ... and perhaps insurmountable conflicts of interest between providers (doctors and hospitals) and employers/patients. The Kaiser Family Foundation has published a new report outlining the traps and foibles of this new private health insurance industry gambit ...

http://www.kaiserhealthnews.org/Stories/2012/April/29/conflicts-arise-as-hospitals-diversify.aspx

As insurers eager to add revenue streams convert themselves into diversified health-services companies, they often buy traditional business adversaries, including physician groups and hospital consultants. They're also buying technology companies and research firms that serve medical-care providers, raising questions not only about independence but about the privacy of patient information.

Check out the KFHF Report.

In March, for example, Blue Cross plans in Pennsylvania and New Jersey teamed up with technology company Lumeris to buy NaviNet, which combines medical and claims data on one network for doctors. One of those Blue Cross plans, Highmark, is also taking control of hospitals and physician practices in the Pittsburgh area.

Last year, Aetna bought Medicity, which builds information exchanges for doctors and hospitals to share patient data electronically.

For its part, United has bought physician networks such as Monarch; Axolotl, which allows doctors, hospitals, labs and radiologists to share patient information electronically; Picis, which specializes in data networks involving seriously ill patients; and CareMedic, a claims consultant that promised hospitals they would "Get PAID" by insurance companies.

This kind of "consolidation" has great potential to do serious harm to the health care industry ... especially if TeaParty/Republicans have their way and PPACA's new regulations on the for-profit health insurance industry are wiped

April 26, 2012: The New York Times Graphic: Who First Used the Term "Obamacare"

http://www.nytimes.com/interactive/2012/03/25/us/politics/fighting-to-control-the-meaning-of-obamacare.html

       vs.

April 24, 2012: Physician Practices in the U.S. Spend Nearly $83,000 Annually Per Physician on Administrative Costs, Nearly Four Times as Much as Canadian Practices Spend

U.S. Could Save Over $27 Billion in Annual Health Spending if Administrative Costs Were Similar to Those in Canada

Physician practices in the U.S. spend significant amounts of time and labor interacting with multiple health plans on claims and billing, obtaining prior authorization for patient services, and dealing with pharmaceutical formularies. The physician and staff time spent on these interactions is estimated to cost at least $82,975 per physician annually in the U.S., compared with $22,205 in Ontario, Canada, according to a study published in Health Affairs. The study was partially supported by The Commonwealth Fund.

The amount spent on these activities by practices in the U.S was nearly four times that spent by their counterparts in Ontario interacting with Canada's single-payer system, according to estimates by lead author Dante Morra of the Department of Medicine at the University of Toronto and colleagues, based on surveys of physicians and administrators. If U.S. physician practices had administrative costs similar to those in Ontario, the total savings for U.S. health spending would be about $27.6 billion per year.

In the U.S. multi-payer insurance system, physician practices interact with multiple health plans with different insurance products, each of which may have its own formulary of approved drugs and its own rules for prior authorization, billing, submitting claims, and determining payment. Canadian physicians generally interact with a single payer with a single product.

"The U.S. spends nearly twice as much per person on health care as any other country, and high administrative costs due to our inefficient and fragmented insurance system are a contributing factor," said Commonwealth Fund President Karen Davis. "Greater continuity of insurance coverage and insurance administrative simplification reforms in the Affordable Care Act can begin to streamline health care administration and reduce the time medical staff must spend on billing and authorization issues."

Additional findings from the study, "U.S. Physician Practices Spend Nearly Four Times As Much Money Interacting With Health Plans And Payers Than Do Their Canadian Counterparts":

U.S. physicians spend 3.4 hours per week interacting with health plans, significantly more than the 2.2 hours per week Ontario physicians spend interacting with the Canadian single payer plan. Most of the difference comes from one hour per week that U.S. physicians spend obtaining prior authorizations.

Nurses and medical assistants spend 20.6 hours per physician per week on administrative tasks related to health plans, nearly 10 times the time spent by Canadian practices. More than 13 of these hours per week are spent obtaining prior authorization for medical services that physicians believe are needed by patients.

U.S. clerical staff spend 53.1 hours per physician per week on administrative tasks related to insurance, compared to 15.9 hours in Ontario. Most of the difference comes from the time U.S. clerical staff spend on billing (45.5 hours) and obtaining prior authorizations (6.3 hours).

Senior administrators of physician practices in the U.S. spend much more time per physician than their Canadian counterparts on overseeing claims and billing tasks: 163.2 hours a year in the U.S. compared to 24.6 hours a year in Ontario.

Physician practices spent very little time submitting quality data to health plans in either the United States or Ontario.

The authors note that per capita health spending in the U.S. is 87 percent higher than in Canada ... $7,290 vs. $3,895 annually ... saying that "many factors contribute to the high cost of health care in the United States, but there is broad consensus that administrative costs are high and could be reduced." They also note that Section 1104 of the Patient Protection and Affordable Care Act of 2010 ("Obamacare") instructs the Secretary of Health and Human Services to take steps to simplify interactions between providers and health plans. In addition, the reform law’s emphasis on new payment methods such as bundled payments and pay-for-performance, and new ways of organizing health care delivery ... like accountable care organizations ... could move U.S health care away from fee-for-service payment, and "reduce the administrative costs involved in producing, reviewing, and processing claims for each service provided."

April 18, 2012: The Real Hunger Games ... Conservatives Protect Millionaire Tax Cuts While Slashing Benefits for Families Struggling Against Hunger

Yesterday the Senate held a much-publicized vote on the “Buffett Rule,” a basic measure of fairness that would ensure millionaires don’t pay a lower tax rate than their secretaries. Conservatives dismiss this proposal as a distraction, scoffing at the fact that it would raise only $47 billion in new revenue over 10 years.

That’s actually a lowball estimate. The Buffett Rule legislation authored by Senatecritter Sheldon Whitehouse (D-RI) is expected to raise more than three times that amount, or at least $160 billion, because the number that Buffett Rule opponents cite assumes that all the Bush tax cuts expire, which would result in more than $800 billion in revenue over the next decade from high-income households. Housecritter Tammy Baldwin (D-WI) introduced companion legislation and is pressing for a House vote on it.

But even more telling is the fact that conservatives dismiss these sums as paltry while they are taking a knife to nutrition assistance in the name of reducing the deficit. [Jeanne Note: For many years during and after the debates over “Hillarycare” in the 1990’s and the HIPAA legislation that followed, I use to discuss in my presentations the testimony I gave before the Committee looking at what HIPAA’s “administrative simplification” might save in health care costs when fully implemented … an estimate of $50 billion over 10 years, according to the Workgroup on Electronic Data Interchange in healthcare (WEDi). My testimony was met with the response by a member of the committee, “is that all?” $ 50 BILLION!!! This not chump change by any standard. Remember way, way back in the 1960’s a Republican senator from Illinois, Everett Dirksen (for whom the “Dirksen Senate Office Building” is named, was quoted as saying, “a billion here and a billion there and pretty soon you are talking about real money.” Well $50 BILLION is REAL money!]

But yesterday, even as the Senate was debating the Buffett Rule, the House Committee on Agriculture released its own proposal to find budget savings. Rather than focus on subsidies to large agribusiness under their jurisdiction at a time of high farm profits, the TeaParty/Republican-controlled committee decided that kids, the elderly, the working poor, and people with disabilities should bear the brunt of deficit reduction.

The House Agriculture Committee found nearly all of its savings ($33.2 billion over 10 years and less than what the Buffett Rule would raise even under the low scenario) from the Supplemental Nutrition Assistance Program. This translates into an 11 percent cut in the monthly benefit for an average family of four. The proposal would also change the rules of the program to make it more difficult for families who fall on hard times to access benefits, reduce coordination with other forms of assistance, and force families who lose a job to spend nearly all their savings to get temporary help.

Here are the specifics:

These cuts would truly affect the most vulnerable in our society and the working poor. Three out of four households receiving nutrition assistance have a child, and 25 percent have an elderly person or a person with disabilities in them. Additionally, three times as many program households have income from work than from welfare.

But these cuts do more than hurt those struggling against hunger. They harm our overall economy. The Supplemental Nutrition Assistance Program provides the biggest “bang for the buck” in terms of job creation, creating $1.73 in economic activity for every dollar spent on the program. Similarly, a $1 billion cut from the program results in more than 13,700 lost jobs. In contrast, tax cuts for the wealthy are one of the weakest options for job growth because those households tend to save the extra cash from a tax cut rather than spending it in the economy.

Conservatives claim we need to cut nutrition assistance for struggling families to cut the deficit. But in the same week, they are rejecting the Buffett Rule proposal that would cut the deficit by an even greater amount by asking millionaires to pay the same tax rate as middle-class families. Their real priorities are crystal clear.

April 18, 2012: Free Market Man, R.I.P.

April 17, 2012: The Health Insurance Industry's Fuzzy Math

Want to find out what Congress is about to vote on? Take a ride on the Washington subway.

If you’ve been on the Metro in recent days, you might have seen an ad designed to make you feel sorry for our poor health insurance companies. So sorry that you’ll call your congressman and demand he support a bill that would gut an important part of the health care reform law: the provision requiring that insurers spend at least 80 percent of the premiums they collect from us on our actual health care.

Back in the early 1990s, when most insurance firms were still nonprofits, they were spending on average 95 cents of every premium dollar paying medical claims ... commonly referred to as the "medical loss ratio." As they began to convert to for-profit status, though, that percentage dropped because of pressure from Wall Street. Now that the industry is dominated by a handful of investor-owned corporations, the average is around 74 percent, according to an analysis by the Senate Commerce Committee. The members of Congress who drafted the Patient Protection and Affordable Care Act ("Obamacare" for all you troglodytes) felt that was way too low. And so they inserted language in the bill requiring insurers to pay rebates to their policyholders if their medical loss ratio went below a threshold of 80% for smaller health insurers and 85% for the large behemoths ... the United Healthcares, the Humanas, the Health Nets, the Aetnas, the WellPoints, and the Oxfords.

Shareholders hate that provision because the less insurance companies spend on health care, the more is available for profits. And because job number one for any investor-owned company is to “enhance shareholder value,” industry lobbyists have been at work ever since Obamacare's passage to get the medical loss ratio provision repealed or weakened. One way of doing that is by getting Congress to exempt the commissions insurance firms pay agents who sell their policies from the equation used to determine that threshold. The TeaParty/Republican-controlled House Energy and Commerce Committee is set to do that as early as today.

A key component of the industry’s ongoing campaign to convince lawmakers to gut the law is to convince us that they’re barely making ends meet. And for that they’ve enlisted the help of one of Washington’s pre-eminent spin doctors, Rick Berman.

One of Berman’s industry-funded front groups, the Employment Policies Institute, is behind the D.C. metro subway ads featuring a dollar bill divided into segments that, we are asked to believe, reveals how insurance companies really spend our premiums (35 cents to hospitals, 33 cents to doctors, 14 cents for drugs, etc.). The five words above the dollar: “Where Your Insurance Dollar Goes.” The one word below it: “Surprised?”

We’re told that the sponsor of the ad is rethinkreform.com, meaning that it is the work of a front group within a front group. Berman’s “Institute” created the Committee to Rethink Reform in 2009 to stir up opposition to the health care law.

Because it is a 501(c)4 organization, the Employment Policies Institute does not have to disclose where it gets its funding—and it doesn’t. But knowing just what lobbying and PR group paid a consulting firm to create that divided dollar bill several years ago should give us a pretty good hint.

It was none other than ... you guessed it ... the lobbying and PR group for the insurance industry, America’s Health Insurance Plans.

Surprised?



AHIP has commissioned the consulting firm PricewaterhouseCoopers to develop a number of “studies” over the years to help advance whatever agenda AHIP felt needed advancing. With a tagline, “Your agenda is our agenda,” PwC has a proven track record of being a reliable agenda advancer for AHIP.

So reliable, in fact, that it put out a widely discredited AHIP-commissioned study a few weeks before the Senate voted on reform in 2009 in an attempt to get people to believe that certain provisions of the reform bill would raise premiums. PwC was forced to disavow the study’s conclusions when reporters figured out that AHIP had instructed it to ignore other important provisions of the bill that would help hold premium costs down.

When we see that dollar and its cost breakdowns, what’s really supposed to surprise us is that just 3 cents go to health insurer profits. What AHIP/PwC and Berman’s groups don’t tell you is that the big for-profit insurers make far more than 3 cents profit off of every premium dollar they collect from us, and that the only way they were able to get the average down to 3 cents was by including several nonprofit insurers ... the ones that cannot by law make a profit ... in the equation.

AHIP thought up the dollar bill illusion to obscure the reality of just how profitable insurers really are. Over just the past two years, the five biggest insurers have reported more than $20 billion in profits. That’s money that could be used to provide millions of uninsured Americans access to needed care. Instead, a big chunk of our premium dollars are probably going into Rick Berman’s pocket and to pay for the bonuses and salaries of the top executives of the for-profit health insurance industry.

Surprised?

April 16, 2012: Proposed Obamacare Rule by Treasury Would Make Millions Ineligible for Subsidy

Consumer advocates, physician groups and several Democratic lawmakers are fighting a quiet battle over a key benefit in the health-care law: tax credits to help millions of people purchase insurance.

At issue is a section of the law that outlines when low- and moderate-income employees can opt out of their employer's coverage and instead get federal subsidies to buy insurance through new state-based marketplaces, called exchanges. The debate over who qualifies for subsidies has been overshadowed by more-polarizing issues such as the government's authority to require most people to buy insurance. But if the Supreme Court upholds the law - or even most of the law - the way the tax-credit dispute is resolved will help determine how many people can get subsidized coverage.

A proposed Treasury Department rule says workers and their families cannot qualify for those subsidies unless their employer's plan is unaffordable because it exceeds 9.5 percent of their household income.

Consumer advocates oppose the rule because it bases affordability on how much employees would pay to cover themselves, not on the cost of covering their entire family. As a result, they say, many workers will be unable to afford family coverage, yet their spouses and children will be ineligible to get help to buy insurance. An estimated 3.9 million dependents would be affected, according to one estimate.

"The proposed rule excludes people Congress intended to cover," said Bruce Lesley, president of First Focus Campaign for Children, which wrote a letter to Treasury signed by more than 100 advocacy groups, including the American Academy of Family Physicians, the Children's Defense Fund, the March of Dimes and the National Council of La Raza. The letter calls on the president and congressional leaders to take "administrative action or legislation" to clarify what Congress intended.

Treasury officials are reviewing the comment letters as they draft final rules expected to be released in the upcoming weeks.

"We are working with consumers, businesses and all interested parties to ensure women and families get the affordable care they need," Treasury Department spokeswoman Sabrina Siddiqui said in a statement, declining to elaborate.

'Self-only coverage'

Supporters of Treasury's proposed rule, among them employer groups and insurance brokers, say it closely follows wording in the law that defines affordability in terms of the cost of "self-only coverage." Critics, including the National Partnership for Women and Families, interpret the law differently, saying it allows for basing the affordability standard on the cost of family coverage. The group notes that Treasury officials plan to use the cost of a family plan as a basis for exempting some people from penalties for not buying insurance.

"It's unlikely that Congress intended affordability to be determined one way" for penalty fines and another for subsidies, the group's letter argues.

Seven Democratic lawmakers who played key roles in drafting and passing the law say the proposed rule doesn't reflect what Congress intended.

"The notion that Congress wrote the law in a manner that would exclude many families from access to more affordable coverage. . . is simply incongruent," the lawmakers, including Rep. Sander M. Levin (Mich.), the ranking Democrat on the Ways and Means Committee, and Rep. Henry A. Waxman (Calif.), the ranking Democrat on the Energy and Commerce Committee, wrote Treasury in a December 6 letter.

A lot is at stake for employers and taxpayers. For every worker who forgoes "unaffordable" job-based coverage and gets subsidized insurance, the employer would pay either a $3,000 per subsidized-worker penalty or $2,000 per employee, whichever is less. Employers with fewer than 50 workers are exempt.

The government's costs will also be lower if more workers retain job-based coverage, because fewer people will seek subsidies.

On the other hand, tax credits are the main way the law is expected to help low- and middle-income Americans buy insurance if they don't get affordable employer-based coverage. By 2019, for example, the Congressional Budget Office estimated that the government will spend $70 billion in tax credits to help 18 million people buy coverage through the exchanges, which are supposed to be set up by 2014.

Major differences in costs

The average amount workers paid for an individual health insurance policy last year was $921 ... or 18 percent of the total cost of the plan, according to an annual survey by the nonpartisan Kaiser Family Foundation and the Health Research & Educational Trust. (Kaiser Health News is a foundation program.)

Family coverage costs more than individual coverage, and employers often contribute a smaller percentage of the total cost.

Workers' share of a family plan averaged $4,129 last year, or 28 percent of the total cost, according to the foundation survey.

Based on those figures, a worker making $40,000 a year would be ineligible to seek subsidies because the $921 is less than 9.5 percent of income, even though the cost of the family plan would exceed that cap. In that case, the worker's dependents also would be unable to get help.

The policy is likely to hit women, who were nearly 2.5 times as likely as men to be insured as a dependent, the hardest, according to the National Partnership.

"It will force more people into not having an affordable option," said Dana Cope, executive director with the State Employees Association of North Carolina. According to Cope, the family coverage costs swelled the ranks of the uninsured in North Carolina, where the state subsidizes coverage for employees, but does not contribute toward family insurance.

"State employees . . . who earn on average $41,000 . . . cannot afford to cover their dependents," Cope testified before a Treasury panel in November.

Employers and insurance brokers support basing affordability on individual coverage because it's easier to administer.

"Everyone's family situation varies," said Jessica Waltman, a senior vice president at the National Association of Health Underwriters, "so this keeps it level and easier for employers."

The responsibility to assess a worker's household income would fall to the state-based exchanges, not to employers, under the proposal.

Employers say, however, that there are other things they need a final decision on ... such as the range of benefits they must offer ... before they can estimate the cost of their plans in 2014.

"It is difficult to create an accurate assessment for 2014," without additional federal guidance, said an October 31 comment from Employers for Flexibility in Health Care, a coalition representing employers in retail, restaurant and other service-related industries. If final rules retain the affordability definition as it now stands, Lesley and others say it will be important to maintain the Children's Health Insurance Program, which provides coverage for poor children and is funded only through 2015. Harder to resolve, he and other advocates say, will be finding coverage for spouses in families where dependents are ineligible for subsidies

April 15, 2012: Medicare To Tie Doctors' Pay To Quality, Cost Of Care

Kaiser Family Foundation reports that twenty thousand physicians in four Midwest states received a glimpse into their financial future last month. Landing in their e-mail inboxes were links to reports from Medicare showing the amount their patients cost on average as well as the quality of the care they provided. The reports also showed how Medicare spending on each doctor's patients compared to their local peers in Kansas, Iowa, Missouri and Nebraska.

The "resource use" reports, which Medicare plans to eventually provide to doctors nationwide, are one of the most visible phases of the government's effort to figure out how to enact a complex, delicate and little-noticed provision of the 2010 health care law: paying more to doctors who provide quality care at lower cost to Medicare, and reducing payments to physicians who run up Medicare's costs without better results.

Making providers routinely pay attention to cost and quality is widely viewed as crucial if the country is going to rein in its health care spending, which amounts to more than $2.5 trillion a year. It's also key to keeping Medicare solvent. Efforts have already begun to change the way Medicare pays hospitals, physicians and other providers who agree to work together in new alliances known as "accountable care organizations." This fall, the federal health program for 47 million seniors and disabled people also is adjusting hospital payments based on quality of care, and it plans to take cost into account as early as next year.

But applying these same precepts to doctors is much more difficult, experts agree. Doctors see far fewer patients than do hospitals, so making statistically accurate assessments of doctors' care is much harder. Comparing specialists is tricky, since some focus on particular kinds of patients that tend to be more costly.

Plus, properly assessing how a doctor affects costs must include not just the specific services she directly provides, but also care other providers may give, either because the patient was referred to them or because the original doctor didn't take the right preventive steps to avoid more expensive treatments later on. And without properly adjusting for patients' health problems, paying bonuses to physicians who use fewer Medicare resources might encourage doctors to stint on care or shun patients with expensive-to-treat ailments.

"It may be the most difficult measurement challenge in the whole world of value-based purchasing," said Dr. Donald Berwick, the former administrator of the federal Centers for Medicare & Medicaid Services, or CM². "We do have to be cautious in this case. It could lead to levels of gaming and misunderstanding and incorrect signals to physicians that might not be best for everyone."

Dr. Michael Kitchell, a neurologist and chairman of the board at the McFarland Clinic in Ames, Iowa, one of the state's biggest multi-specialist practices, predicted the Medicare reports "will be a huge surprise to almost every physician." That's because the calculations of how much those doctors' patients cost Medicare include not just the services of the individual doctor but of all the doctors that provided any treatment to the patient. Kitchell said his own patients saw on average 13 other physicians besides himself.

"You're a victim or a beneficiary of your medical neighborhood," Kitchell said. "If the primary care doctors are doing the preventative screening tests, you'll get credit for that, but if you're in a community where the community doctors are doing a poor job, you're going to look bad."

Medicare officials are trying to refine the way they judge doctors as they follow the health care law's directive to phase in the new payment system, called a Physician Value-Based Payment Modifier, starting in 2015. It will initially apply only to physician groups and some specialists selected by the government, but by 2017 the payment change is supposed to apply to most if not all doctors.

The assessment "is a very important change we're putting into place, one where we're going to need a lot of feedback and deliberation," said Jonathan Blum, CM²'s deputy administrator. "We're not blind to the challenges that are coming toward us."

Although the program is still being devised, it will become reality for many doctors starting in January, because CM² plans to base the 2015 bonuses or penalties on what happens to a doctor's patients during 2013.

As the nation's biggest insurer, Medicare's adoption of this approach would be "a game changer" in terms of making physicians directly accountable for costs, said Anders Gilberg, senior vice president at the Medical Group Management Association, which represents physicians groups. Medicare is "going to be shifting money from … physicians who are deemed to be high cost relative to their peers to low-cost physicians. That's going to create all kinds of new incentives in fee-for-service."

Private insurers may follow Medicare's lead, said Paul Ginsburg, president of the Center for Studying Health System Change, a Washington think tank. The formula Medicare ultimately designs to judge and pay doctors, Ginsburg said, could become "a valuable asset for private insurers, with a tool that will be somewhat bulletproof, that physicians won't attack because they've been part of the process of developing them."

But getting physician support may not be so easy, said Margaret O'Kane, president of the National Committee for Quality Assurance, a nonprofit in Washington. "Doctors are a very powerful political segment," she said. In addition, she added, "Patients are not behind this agenda. The public is very scared about managing costs."

In the reports, Medicare measures the average payments it made for each doctor’s patients, as well as subgroups of patients with common chronic conditions, such as chronic obstructive pulmonary disease, diabetes and heart failure. Medicare adjusts the costs to take into account differences in patients' age, gender, poverty and history of medical conditions.

35, 20, or Less

For the resource reports, CM² has come up with a preliminary method to determine how central a role a doctor played in a patient’s care. If a doctor was responsible for at least 35 percent of a patient’s evaluation and management services, they are presumed to have "directed" the beneficiary’s care. If they didn’t direct the care but accounted for at least 20 percent of the physician fees billed for the beneficiary, they are considered to have "influenced" the care. And if they did less than that, they are considered to have "contributed" to the care.

But that method is widely considered so crude that few expect CM² will ultimately use it in payment. CM² is trying to develop more refined methods to compare physicians’ parsimony or extravagance with Medicare dollars using software programs called "episode groupers." These programs determine the combined cost for all the services ... including doctors, labs, hospitals and pharmaceuticals ... that were used to treat a distinct medical situation, such as urinary tract infection or hypertension attack, over a set period of time.

Initially, Medicare attempted to use existing programs devised by commercial insurers but found they didn’t work with Medicare data, according to a report from the General Accounting Office. "It is not clear that all the problems identified with the commercial groupers can be solved by a Medicare specific grouper and the timeline for its development is challenging," the report said.

Dana Gelb Safran, who oversees quality measurement for Blue Cross Blue Shield of Massachusetts, says she doubts it will be possible for the government to judge individual doctors. She predicts CM² will ultimately have to find ways to evaluate doctors as parts of groups- either formal affiliations as part of group practices or informal affiliations among doctors who refer to each other.

"There really are very few measures that we can reliably evaluate on the individual doctor level," she said. "When they move forward with the value-based modifier, there is going to have to somehow allow physicians to identify other physicians with whom they say they practice and who they say they share clinical risk for performance."

April 14, 2012: Intelligent Life

April 12, 2012: HAPPY BIRTHDAY ROMNEYCARE!

Oh Mitt ... guess what, today is the 6th anniversary of your signing into law Romneycare in Massachusetts. Remember how happy you were that day. How proud you were of the law which you said was a model for the nation. Thank you Mitt. Obama thanks you.

Romney signing the Massachusetts universal health care law into law, April 12, 2006

April 10, 2012: Heights of Hypocrisy: Ryan Claims His "Catholic Faith" is Basis for His Plan to Cut Social Programs and Aid to the Poorest Americans

House Budget Committee Chairman Paul Ryan (T/R-WI) told Christian Broadcast Network this week that the House GOP’s budget, which he wrote, was driven by his Catholic faith. “A person’s faith is central to how they conduct themselves in public and in private,” Ryan said, and Catholic principles are what led him to cut programs for the poor so as to keep people from becoming “dependent on government.”

Ryan’s budget seems to ignore Catholic social teaching that calls for protecting the poor and improving access to food, jobs, health care, housing, and the social safety net. And now religious leaders are making the same case. The founder of the PICO National Network, the largest national coalition of religious congregations, slammed Ryan’s claim of adherence to Catholic teaching as “the height of hypocrisy” in a release circulated Wednesday:

“It’s the height of hypocrisy for Rep. Ryan to claim that his approach to the budget is shaped by Catholic teaching and values,” said Fr. John Baumann, S.J., founder of PICO National Network. [...] “A central moral measure of any budget proposal is how it affects “the least of these” (Matthew 25). The needs of those who are hungry and homeless, without work or in poverty should come first.”

“By these measures,” the release says, “the Ryan budget is a severe failure,” noting that it cuts Medicare, Medicaid, Pell Grants, food stamps, and “other programs that help vulnerable working families make it through tough times and live better lives,” while giving massive tax breaks to the wealthiest Americans and corporations. Overall, 62 percent of Ryan’s budget cuts come from programs that benefit the poor. “The mission of the Church is to ‘bring good news to the poor’ and to protect the vulnerable, not to justify the impoverishment of the very young, the very old and the sick in order to enrich the wealthy,” the release says.

This isn’t the first time religious leaders have criticized the House GOP budget. When Ryan released the budget in March, Bishop Gene Robinson called it an “immoral disaster” that “robs the poor,” and Father Thomas Kelly, a constituent of Ryan’s, said he was “outraged” that Ryan defended the budget “on moral grounds.” Last year’s Ryan budget faced similar criticism, as religious leaders blasted it for adhering more closely to the policies of anti-religion, anti-government author Ayn Rand than to the teachings of the Bible.

April 9, 2012: How Did Mitt Romney Get So Rich? Private Equity Explained in 8 Easy to Understand Steps (Robert Reich)

If this doesn't piss you off, you are either comatose or dead... <sigh>

http://www.youtube.com/watch?v=rodifJlis2c&feature=player_embedded

How Did Bain Capital, Mitt Romney and Other Private Equity Managers Make their Millions?

Step 1:They don't risk their own money; they risk other people's money (usually from pension funds ... and thus from millions of working Americans)

Step 2: They use: this money to buy up companies that they think they can squeeze higher profits from ....

Step 3 They squeeze out costs, and for most companies that means payroll costs ... they reduce payrolls by firing workers and/or reducing wages and benefits, and/or by shifting jobs overseas to low wage countries ...

Step 4: They use the company as collateral to borrow money from banks and because these highly leveraged new loans are deductible from the company's income, presto ... the company shows even greater profits ...

Step 5: They get the company to pay a special dividend to repay the original investors ... and presto ... everything after that is gravy ...

Step 6: They sell the company for much more than they paid for it, after all it is so much more profitable now ...

Step 7: They pocket 20% from the profits from the sale ....

Step 8: Because these profits are considered "capital gains," they are taxed at only 15% ... this is a sham because the justification for special treatment of capital gains is that the investor has taken a risk in making the investment ... but as noted these private equity investors have not risked a dime of their own money.

What are the consequences of all of this to the average American?

You and I and other taxpayers subsidize all of this:

.... when they fire workers who then collect unemployment benefits raising costs to everyone, who pays for this? ... WE DO!

--- when they pump up company profits by deducting interest payments from corporate taxes, who has to make up that lost revenue? ... WE DO!

... when they treat their multi-million dollar earnings as capital gains and pay only 15% in taxes, who has to make up all that lost revenue in higher taxes? WE DO!

... worst yet, when many of these companies later go bankrupt under the weight of all that added debt and loans (from which the equity players have pocketed so much of the gain) and their pension obligations have to be taken up by the federal government , who has to pay for it? WE DO!

As Robert Reich puts it: The "magic" of private equity is really a "magic trick" and it is played on you and me!

Here’s what has to be done to stop it:

1. End the “carried interest” loophole that allows private-equity managers like Mitt Romney to treat their income as capital gains, taxed at 15 percent, even though they don’t risk a dime of their own income. Their earnings should be treated as ordinary income.

2. Hold the managers of private-equity funds, hedge funds, and pension funds to a “due diligence” standard. So if the funds lose money and these managers didn’t exercise due diligence, the Pension Guaranty Corporation can claw back their bonuses.

3. Raise the capital-gains rate to match the tax rate on ordinary income – especially for short-term investments. Give a tax preference only to “patient capital” – that is, for investments held for, say, five years or more.

4. Resurrect Glass-Steagall.

Mitt and others like him won’t like any of these reforms. They’d eliminate the humongous profits they’ve enjoyed at the expense of the rest of us.

April 8, 2012: What Have Obamacare and the Recovery Act Done for You in Your State?

Two sites to visit:

An interactive map from the Center for American progress on the benefits of Obamacare ....

http://www.americanprogress.org/issues/2012/03/aca_benefits_map.html

And from the White House, a source document ...

http://www.whitehouse.gov/sites/default/files/methodology_for_sbs_spreadsheet_3-4-12_clean.pd.

April 6, 2012: GOP War on Women Supersized

House TeaParty/Republicans have made it clear that they aren’t finished with their war on women. It's not just about contraception and abortion any more. They’ve just taken their crusade to a new level: attacking women’s economic security.

The House-passed Republican budget targets poor women and their families at every juncture of their life cycle, from crib to rocking chair. It guts programs that help low-income children get the nutrition and educational opportunities they need to develop and thrive. It makes devastating cuts to the Supplemental Nutrition Assistance Program (formerly food stamps), or SNAP, which primarily helps women, children, the disabled, and the elderly put food on the table, while also boosting our economy. The House budget’s cuts to Medicaid would deal a tough blow to low-income and middle-class women and families supporting elderly loved ones in nursing homes and those who rely on Medicaid for often life-saving preventive health services.

Instead of “empower[ing] individuals with greater control over their futures” as it claims, this budget does just the opposite. By choking off opportunity for women and children of all ages, the budget leaves poor women to fend for themselves and puts the American Dream further out of reach. What’s more, these cuts are being made in order to finance more tax breaks for those who need them the least.

The table below illustrates the House Republicans’ war on women’s economic security at all stages of life:

*The $3.3 trillion figure also includes $463 billion in cuts to low-income mandatory programs other than SNAP and Medicaid.

April 5, 2012: Chart: New Unemployment Claims have Steadily Fallen Under Obama After Steadily Rising under Bush

April 4, 2012: Interactive Chart: How much Might You have Saved if the Medical Loss Ration Rule in PPACA ("Obamacare") was Fully Effective in 2010

http://www.commonwealthfund.org/usr_doc/site_docs/flash/EstimatedRebates.html?omnicid=20

April 4, 2012: Commonwealth Fund: PPACA 2010 Insurance Rebates Would Have Hit $2 Billion

Consumers would have received rebates of nearly $2 billion ... in some cases as much as $300 a member ... if the health-law cap on insurance profits and overhead had been in place in 2010, the Commonwealth Fund estimates in a new study.

Chart by The Commonwealth Fund

The paper, to be published tomorrow, makes no predictions about the rebates that insurers will be required to pay this year for the first time. But the study shows that insurers have been spending more on administrative costs than what the health law will allow, said Sara Collins, a Commonwealth Fund economist.

“The United States has insurer administrative costs that exceed those of private insurance companies in other industrialized countries,” she said. “It’s an indication that there is waste in the system that can be reduced.”

[Jeanne's Note: Yes indeed, those $20 million annual bonuses to for profit health insurer CEOs and top executives may have to be trimmed.]

The 2010 Patient Protection and Affordable Care Act ("PPACA" ... otherwise known as "Obamacare") allows insurers to devote no more than 15 to 20 percent of their revenue, in most cases, to overhead, profits, executive pay and the like. (This is the mirror of the requirement that they spend at least 80 to 85 percent of their revenue on medical care and quality improvements.)

Anything over the cap must be returned to the plan members and employers who pay the premiums. The rules for what’s known as the medical loss ratio took effect for 2011, with rebate checks of an undetermined amount scheduled to be sent out in August. [In Arizona, the rebates are estimated to be $163 per member]

If the cap had been in place for 2010, nearly a fourth of privately insured consumers would have received rebates, the study said. More than half of those with individual coverage would have pocketed refunds. Rebates would typically have been $100 to $300 per member, the study said.

Texas insurance customers collectively would have received the most in rebates ... $255 million ... followed by those in Florida, who would have gotten $202 million. One fifth of nonprofit insurers would have owed rebates. Among for-profit plans, 70 percent would have been required to send rebate checks, said the study, which was conducted by Mark Hall of Wake Forest University and Michael McCue of Virginia Commonwealth University.

[Jeanne's Note: Highly touted by TeaParty/Republicans is their "alternative" "Health care reform" plan ... allowing people to buy health insurance across state lines ... like in Texas and Florida, which have some of the weakest state insurance laws and which are the home bases for most of the nation's virtually fraudulent health insurance companies... you knows the ones with the "800" numbers tacked on telephone poles "Need Health Insurance, Call 1-800-" ... yep, that's the solution to rising U.S. health care costs.]

While 2011 insurer profits were substantial, some have suggested that moves by the industry to lower premiums last year will reduce rebates owed this year.

Even though the study doesn’t predict how much in rebates will be paid, it gives an idea of the administrative dollars that would henceforth be devoted to reduced premiums, rebates or medical spending in order for the industry to comply with the law, Collins said.

“What you would hope to see over time is a reduction in the premium dollar that goes to profits and administrative costs and more of that premium dollar going to medical care,” she said.

April 3, 2012: France best, U.S. Worst in Preventable Death Ranking

The U.S. has the best health care in the world, right? And Obamacare will just destroy it, right? Sorry, kids, both statements are wrong. The only thing the U.S. health care system is number one in is costs ... and our R.O.I. on that investment is terrible. Repealing "Obamacare" will just accelerate the bad.

WASHINGTON (Reuters) - France, Japan and Australia rated best and the United States worst in new rankings focusing on preventable deaths due to treatable conditions in 19 leading industrialized nations, researchers said on Tuesday.

If the U.S. health care system performed as well as those of those top three countries, there would be 101,000 fewer deaths in the United States per year, according to researchers writing in the journal Health Affairs.

Researchers Ellen Nolte and Martin McKee of the London School of Hygiene and Tropical Medicine tracked deaths that they deemed could have been prevented by access to timely and effective health care, and ranked nations on how they did.

They called such deaths an important way to gauge the performance of a country's health care system.

Nolte said the large number of Americans who lack any type of health insurance -- about 47 million people in a country of about 300 million, according to U.S. government estimates -- probably was a key factor in the poor showing of the United States compared to other industrialized nations in the study.

"I wouldn't say it (the last-place ranking) is a condemnation, because I think health care in the U.S. is pretty good if you have access. But if you don't, I think that's the main problem, isn't it?" Nolte said in a telephone interview.

In establishing their rankings, the researchers considered deaths before age 75 from numerous causes, including heart disease, stroke, certain cancers, diabetes, certain bacterial infections and complications of common surgical procedures.

Such deaths accounted for 23 percent of overall deaths in men and 32 percent of deaths in women, the researchers said.

France did best -- with 64.8 deaths deemed preventable by timely and effective health care per 100,000 people, in the study period of 2002 and 2003. Japan had 71.2 and Australia had 71.3 such deaths per 100,000 people. The United States had 109.7 such deaths per 100,000 people, the researchers said.

After the top three, Spain was fourth best, followed in order by Italy, Canada, Norway, the Netherlands, Sweden, Greece, Austria, Germany, Finland, New Zealand, Denmark, Britain, Ireland and Portugal, with the United States last.

PREVIOUS RANKINGS

The researchers compared these rankings with rankings for the same 19 countries covering the period of 1997 and 1998. France and Japan also were first and second in those rankings, while the United States was 15th, meaning it fell four places in the latest rankings.

All the countries made progress in reducing preventable deaths from these earlier rankings, the researchers said. These types of deaths dropped by an average of 16 percent for the nations in the study, but the U.S. decline was only 4 percent.

The research was backed by the Commonwealth Fund, a private New York-based health policy foundation.

"It is startling to see the U.S. falling even farther behind on this crucial indicator of health system performance," Commonwealth Fund Senior Vice President Cathy Schoen said.

"The fact that other countries are reducing these preventable deaths more rapidly, yet spending far less, indicates that policy, goals and efforts to improve health systems make a difference," Schoen added in a statement.

April 3, 2012: Repealing ‘Obamacare’ Would Explode Debt, Says GAO

A new report by an independent government auditor concludes that implementing President Obama’s health care law as intended will make a significant dent in the long-term debt forecast. The report comes as Supreme Court justices weigh striking some of “Obamacare’s” central provisions — and perhaps the law in its entirety — and as the Republican Party remains committed to repealing the law if it seizes control of government in November.

“[I]f the Patient Protection and Affordable Care Act (PPACA) is implemented as intended it would have a major effect on the [fiscal] gap but would not eliminate it,” the Government Accountability Office wrote in a Monday report ... a conclusion in line with its own past research and similar research conducted by other government and non-government analysts.

GAO doesn’t isolate PPACA’s stand-alone contribution to long-term budget consolidation. But it does conclude that if key cost-control measures in the law, and other automatic cuts to Medicare spending baked into current law, are ignored, or overridden by Congress, the implications for the national debt are vast.

If “Obamacare” is implemented as intended, and other measures, such as automatic payment cuts to Medicare physicians, take effect, “spending on Medicare and Medicaid grows from 5 percent of GDP in 2010 to over 7 percent by 2030.”

By contrast, if Congress overrides those provisions, “[s]pending on health care grows much more rapidly under this more pessimistic set of assumptions,” according to the report. “Absent changes to these programs, spending on Medicare and Medicaid under the Alternative simulation grows to over 8 percent of GDP by 2030.”

Congress has consistently passed temporary legislation to prevent Medicare doctors from experiencing a pay cut baked into current law. But the current patch expires on January 1 ... along with the Bush tax cuts and the payroll tax holiday ... just as other automatic cuts to Medicare are set to take effect as a penalty for the Super Committee’s failure to pass deficit-cutting legislation.

The confluence of these fiscal triggers suggests lawmakers will be forced to act quickly after the election to put the country’s budget on a more sustainable path. But if Republicans win big in November and move ahead with their plan to repeal the health care law, they’ll only make matters worse.

April 2, 2012: Future of U.S. Health Care: Rationing by Any Other Name

It sounds like such a simple concept: Study different medical treatments and figure out which delivers the best results at the cheapest cost, giving patients the most effective care. So simple that even the health care wonks employed by the George W. Bush administration endorsed it and pushed through legislation to study it and hopefully begin to realize the savings that might result. In 2003, as part of the "Medicare Modernization Act" that brought us Medicare Part D, the prescription drugs for seniors program, demonstration programs were funded to look into finding "what works and what doesn't" in health care. As I reflected in a slide from my presentations:

Of course all of this was pre-Obamacare ... when Republicans were pushing their alternative health care reform plans which included the concept of "comparative-effectiveness" ... "paying only for what works..." and definitely before the GOP was taken over by right-wing TeaParty fanatics ... before anything associated with President Obama was considered anathema ... before "Obamacare," was passed. Congress then, both with both Democrats and Republicans voting yes, appropriated $1.1 billion to fund these AHRQ and Institute of Medicine studies.. Comparative effectiveness was the cure-all and end-all ... but today, of course, it is nothing more than Obamacare's "health care rationing provision.

Over the next ten years, annual U.S. health spending is expected to balloon to $4.5 trillion. Despite this, current Republican re-election strategy is to undermine efforts at reforms, misleading the electorate at every opportunity, making allegations of callous rationing of health care and "European-style socialism," all designed as a self-serving, malicious plan to undermine public support for needed reforms and win elections ... destroying U.S. health care ... and most likely our nation;'s still fragile economy in the process.

Yet, an examination of one of the best-known examples of a comparative-effectiveness analysis shows how complicated such a seemingly straightforward idea can get. The study, known as "Courage" and published in the New England Journal of Medicine in 2007, shook the world of cardiology. It found that the most common heart surgery ... a $15,000 procedure that unclogs arteries using a small scaffold or stent ... usually yields no additional benefit when used with a cocktail of generic drugs in patients suffering from chronic chest pain.

The Courage trial was led by William Boden, a Buffalo, N.Y., cardiologist, and funded largely by the Department of Veterans Affairs. It tracked 2,287 patients for five years and found that trying drugs first, and adding stents only if chest pain persisted, didn't affect the rate of deaths and heart attacks, although stents did produce quicker pain relief.

Steven Nissen, then chairman of the American College of Cardiology, called the study a "blockbuster." Shares of leading stent maker Boston Scientific Corp. fell on the day the news broke, as many doctors and investors expected stent usage to fall off.

For a brief while, they were right. U.S. stent implants declined 13% in the month after the study's release. But as the headlines about Courage faded, stentings soon began to rise again, and are now back at peak levels of about one million a year, according to hospital surveyor Millennium Research Group.

"Most [cardiologists] haven't voluntarily incorporated the Courage criteria into their practice," says Dr. Boden. "What's going to continue to drive practice is reimbursement."

Without a way to keep insurers from covering procedures that studies find ineffective, projects like Courage face an uphill climb. Obamacare has provisions to disseminate study results, but wouldn't require private insurers or Medicare to adjust coverage or payments to doctors in response to findings.

Unlike automobile insurers, which pay for crash-tests themselves, or home insurers, which set up Underwriters Laboratories Inc. to test household products, health insurers rarely conduct controlled studies of medical products. America's Health Insurance Plans ("AHIP"), a political action and lobbying trade group for the for-profit health insurance industry, says it hopes to see the government establish a standardized way of conducting and interpreting comparative-effectiveness research in order to help insurance companies make decisions. Oops, AHIP is largely funding efforts to repeal Obamacare ... which is a pretty good indicator that the private for-profit health insurance industry really, really doesn't give a twit about controlling costs, only maximizing its own profits ... and they can make money on paying for unnecessary and duplicative care,

Since the 1970s, the "evidence-based medicine" movement has urged doctors to use studies like Courage as the best way to decide how to treat patients.

Many studies have had a substantial impact, especially those that boost a new therapy and its maker. Examples include studies that found benefits from antidepressants and cholesterol-lowering statins.

Studies that identify dangers have also been influential, including those linking salt to high blood pressure and the government's Women's Health Initiative, which in 2002 warned against overuse of hormone therapy after menopause.

But studies like Courage ... that find an already-popular and a lucrative treatment can merely be unnecessary, but not harmful ... have rarely altered medical practice to the same degree.

A 2002 government effort comparing treatments for high blood pressure found that generic pills worked better than patented drugs that cost far more, including Pfizer's Norvasc. But sales of Norvasc continued to grow, from $3.8 billion in 2002 to $4.9 billion in 2006, before the drug lost patent protection.

In a statement, Pfizer said most patients require multiple drugs to control high blood pressure.

"Pfizer medicines are evaluated by health plans and physicians every day when they decide what to offer beneficiaries and patients," a spokeswoman said. "We welcome additional and rigorous research to support those individual decisions."

Sanjay Kaul, a prominent cardiologist and researcher at Cedars-Sinai Heart Institute in Los Angeles, estimates that the U.S. could save $5 billion of the $15 billion it spends on stent procedures each year if all doctors followed Courage's guidance—that is, putting certain heart patients on generic drugs and turning to stents only if the pains persists.

The percentage of stent patients who had been prescribed such drugs at the time of their surgery hasn't changed since Courage, and remains at about 45%, according to data maintained by the American College of Cardiology.

Most stent patients never receive a cardiovascular "stress test" to verify that a clogged artery is the cause of their chest pains, despite professional guidelines that urge such a test before stenting.

"It's certainly remarkable that nothing has been done to put some checks and balances," into the stenting decision after Courage, says Eric Topol, the chief academic officer of Scripps Health, a hospital operator in San Diego. "I have a very strong disagreement with cardiologists who see no reason to do the stress test."

Ajay Kirtane, a cardiologist at Columbia University, believes that American expectations about medical "fixes" makes it hard to follow recommendations such as Courage's. If a doctor attempted to persuade a patient to delay stenting in order to see whether drug treatment would work by itself, he says, the patient would likely drop him and see another cardiologist instead.

Courage's findings apply to roughly a third of the people who get stents ... those with chronic, stable chest pain. Others who receive the devices have more serious heart disease or heart attacks.

Doctors and health-care watchers point to several reasons Courage didn't move the needle. Patients have little incentive to decline costly care when insurers are paying. Interventional cardiologists, on the other hand, have a financial incentive to use stents ... they receive about $900 per stenting procedure, roughly nine times the amount they get for an office visit.

Insurance companies face their own dilemmas. If they act alone to restrict coverage, private insurers fear employers will switch to insurers that do cover the procedure. And because insurers generally earn a profit by charging a premium on claims they pay, they don't necessarily have an incentive to crack down on excess spending.

Under federal law, Courage's findings about efficacy can't alter the amount Medicare pays doctors for stenting. The government insurance program is legally barred from considering a treatment's benefits when deciding how much to pay doctors for doing a certain procedure. Private insurance carriers, in turn, generally base their rate schedule on Medicare's.

Over the past 10 years, improvements in stents have coincided with an explosion in their use, as the hour-long procedure edged out bypass surgery as the preferred treatment for clogged arteries in all but the sickest patients. The average cardiologist who installs stents made about $500,000 in 2008, up 22% from 10 years prior, adjusted for inflation, according to the American Medical Group Association.

In 2008, the Courage study faced a key challenge. A Washington state agency called the Health Technology Assessment Program, or HTAP, announced it would consider putting Courage's findings into practice.

The agency, empowered to change coverage decisions for the state's Medicaid program and some public-employee health plans, commissioned a review of the evidence backing stents. That process could have led to limiting the procedure's use in the state's Medicaid program and health plans for some state employees.

Certain cardiologists, as well as stent manufacturers, rallied to resist the review. In policy papers submitted to the agency, they argued that the Courage study had not included the latest models of stents, which were introduced after the study began, and should not be used to require all patients to attempt drug therapy first.

Despite a number of similar trials, performed before and after Courage and that reinforce its findings, few private insurers have shifted procedure.

"There's no incentive on the part of the insurance company to do that," says George Diamond, a Los Angeles cardiologist who used to implant stents. "They would cause an uproar on the part of the physicians saying insurance companies were attempting to interpose themselves on the medical process."

April 1, 2012 (not an April Fool's joke, although it might look like one <sigh>:

March 31, 2012: Viral Anti-PPACA E-Mail De-Bunked

YOU ARE NOT GOING TO LIKE THIS: ObamaCare Highlighted by Page Number ...All of the above should give you the point blank ammo you need to support your opposition to Obamacare. Please send this information on to all of your email contacts."
--excerpts from an email zooming around the United States

Zygmunt Plater, a professor at Boston College Law School, sent The Fact Checker a copy of the above email, which purports to be an analysis of the new health care law by a judge, complete with page citations. Plater's brother, Marek, had sent him a copy of the email, asking if it could be verified, after receiving it Wednesday from a senior official at the company where he works. Under the subject heading of "Read and Heed," the official sent the email to company employees with the notation, "We are now officially out of control." There's some pretty scary stuff in here: cancer care will be rationed according to age, the government would have "real-time access" to an individual's bank accounts, the government will set all doctor's fees, and so forth. So what's truth?

The Facts

Just because it is in an email--or on the Internet--does not make it true, especially when it is woefully out of date.

There is indeed a former county judge named David Kithil who lives in Marble Falls, Texas, which is about 50 miles northeast of Austin. In August, 2009, he wrote a letter to the River Cities Tribune, a local newspaper with a circulation of under 5,000, detailing his objections to one of the health care bills then pending in the House of Representatives--H.R. 3200.

As a former judge of Burnet County, Texas, Kithil is not a health care expert--and congressional language can be obtuse. His analysis is often debatable. The assertion of "real-time access" to bank accounts appears to be referring to a benign section allowing electronic funds transfers. The claim about doctors' fees refers to boilerplate saying the government will not pay less than rates set under Medicare. Similarly, the bill does not ration cancer care, but allows for a study of whether specialty hospitals are charging more for the same service as general hospitals--and then would actually boost payments to general hospitals.

But in any case, he was analyzing a bill that had not yet passed the House. The language was changed before final House passage in November, 2009. Then the Senate in December passed its own, more conservative version of a health care overhaul. By March, 2010, the House accepted much of the Senate bill, with some adjustments. While the email refers to the dangers of so-called "Obamacare," Kithil's letter has little to do with the final version of the legislation--which Kithil readily acknowledges.

"What I wrote about was a bill that never became law," Kithil said in a telephone interview Thursday. He said he has not had an opportunity to go through the final bill, but knows that some of the items that had concerned him were not enacted into law.

But the letter is certainly an email and Internet sensation. A Google search for "David Kithil and Obamacare" turns up nearly 2,000 examples of his letter posted on websites, blogs and forums--including as recently as this month. Kithil said that someone had called the newspaper and asked permission to put the letter in an email. The next thing he knew, he was getting calls from around the country. The calls have actually picked up in recent weeks, he said, adding: "It really shows the power of the Internet."

The Pinocchio Test

The lesson here is that facts need to come from reputable, credible sources, not an email chain. Kithil is in many ways an innocent bystander. He never claimed to be an expert and merely offered his opinion to the local newspaper. There are many critiques of the health care law, both from the left and right, which have been written by health care and legislative experts. That's where people need to go for more information.

Four Pinocchios--not to Kithil, but to anyone who keeps forwarding this email.

March 30, 2012: Let the Private Sector Decide (How Large the Insurance Company's CEO's Bonus Will Be)



March 28, 2012: This Doesn't Bode Well for PPACA

March 27, 2012: SCOTUS and the Individual Mandate

Apparently the conservative 5 justices sitting on the SCOTUS had a lot of difficulty during today's oral arguments on the constitutionality of PPACA's "individual mandate" with the concept of negative responsibility ("failing to do something" ... like having health insurance) as distinguished from a positive action (like refusing to buy health insurance) and seemed to be leaning against the power of Congress to regulate inaction impacting Interstate Commerce. Since all five of them, CJ Roberts, J. Scalia, J. Thomas, J. Alioto, and J. Kennedy are Roman Catholics, perhaps they should have been reminded of the RC “Confiteor” prayer in which the penitent asks for forgiveness for “what I have done and for what I have failed to do…” But then they probably didn’t pay all that much attention during Catechism class. Inaction can be as sinful as direct overt action ..

March 26, 2012: The GOP Plan for the 50 Million Uninsured Americans (and for the the other 100 million who have jobs and some insurance now)

March 25, 2012: Coining the Term "Obamacare"

The credit (or discredit) for having been the first to use the term "Obamacare" has raised it's ugly head again ... when early (very early) this morning I received a call from a BBC reporter in London wanting to interview me on the Atlantic magazine web site's assertion that I (then using the name "Jeanne Schulte Scott") was the very first person to use the term "Obamacare" in published print. O.K., let's set the record straight: here is the column I wrote in the March 2007 issue of the Journal of the Healthcare Financial Management Association.

Was I such a bad girl (as many of my hate e-mails since the Atlantic made its assertion? Or can I now claim credit at least in part for having convinced the Obama administration to now embrace the "Obamacare" sobriquet and make it its own?   You be the judge.

March 22, 2012: Sojourner Truth: The Ryan Budget is Immoral

Remember TeaParty/Republican Housecritter Paul Ryan’s 2011 budget, The Path to Prosperity? Well, it’s baaa-aaack ... more perfidious than before.

Christianity and most of the world’s faith traditions explicitly demand protection for the poor and the preservation of the lives and dignity of all. Well, the Chair of the House Budget Committee, Ryan, high-tails it down his Path, budget rolled in-hand, in the exact opposite direction from those moral commitments.

Bob Greenstein, president of the Center on Budget and Policy Priorities (CBPP), concluded that the Ryan budget “is Robin Hood in reverse ... on steroids. It would likely produce the largest redistribution of income from the bottom to the top in modern U.S. history and likely increase poverty and inequality more than any other budget in recent times (and possibly in the nation's history)."

Any responsible budget plan requires a balanced approach that would both increase revenue and reduce spending. This proposal would cut taxes, merely hope for revenue, increase military spending, and slash most everything else that isn’t protected by large corporate interests. Ryan gives further tax cuts to the wealthy in a plan that would simultaneously increase the effective tax rates on low and moderate-income people. This completely fails to acknowledge that on our current course, well over half of our projected debt by 2019 has been caused by the Bush-era tax cuts and the wars in Iraq and Afghanistan. Yes, we have a revenue problem.

What you need to know about our federal budget is that about two-thirds of it is what’s called “mandatory spending.” Programs such as Social Security, Medicare, and Medicaid mostly make up that part of the budget. The other half is "discretionary spending" and includes money for core defense spending, education, roads, scientific research, and other programs for low-income people. About half of all “discretionary spending” is spent on defense.

Ryan claims that the budget is bold and makes tough choices, but it doesn’t.

When it comes to the “mandatory spending” Ryan’s plan kicks any problems down the road a decade. Cost reductions ... by turning Medicare into a voucher system ... would start in 10 years and undermine the primary commitment of the program: guaranteed health coverage for senior citizens.

When you look at the “discretionary spending” side, Ryan not only takes the idea of cutting military spending off the table, he significantly increases the core defense budget. While the plan doesn’t yet specify all of the additional “discretionary spending” cuts Ryan would like to see, the CBPP put it this way: If the Ryan plan were enacted, “by 2050, most of the federal government aside from Social Security, health care, and defense would cease to exist.”

SNAP (Supplemental Nutrition Assistance Program) ... an effective program that helps millions of families survive their toughest days by making sure that, if nothing else, they have food on the table ... would end up squeezed and then block granted.

One of the reasons why SNAP works so well right now is that its funding has the flexibility to fluctuate up and down when there is a change in need. Block granting the program would send a fixed amount of money to states and take away one of the main reasons it works so well in the first place.

Ryan, as a Catholic, has flagrantly disregarded the moral counsel of the U.S. Conference of Catholic Bishops, which released a statement on March 6 affirming the following:

“Congress should base decisions on the federal budget on whether they protect or threaten human life and dignity, whether they put the needs of the hungry, the homeless and the unemployed first, and whether they reflect the shared responsibility of government and other institutions to promote the common good of all, especially workers and families who struggle to live in dignity in difficult economic times.”

Not only does his budget fail to meet the basic teachings of Ryan’s religious tradition, the plan shows moral cowardice. I don’t know any world in which a “tough choice” is piling benefits on the already rich and powerful while asking people who are already struggling to pay for it.

Though the vulnerable may not have Super PACs or gangs of lobbyists fighting for them, they do have us ... people of faith. And our faith compels us to fight this immoral budget.

We are committed to pray and fast and write letters and raise our voices in the public square in the hope that America’s conscience might be awakened from a sound, silent slumber. And that together we might recommit our nation to the task of preserving the lives and dignity of all ... especially the least of these.

March 21, 2012: A "TruthList" on "Obamacare" Lies, Misrepresentations and Total Fabrications (from Politifact)

http://www.politifact.com/truth-o-meter/article/2012/mar/21/health-care-fact-checking/

The Affordable Care Act, the Democrats' health care law, has often been defined more by falsehoods than truths.

Claims that the law is a "government takeover of health care," that it contains "death panels" and that it will put a 3.8 percent tax on home sales have frequently drowned out true claims about what the law actually does.

So with the U.S. Supreme Court holding arguments next week about whether the law is constitutional, we thought it was a good time to review our fact-checks and highlight the most common falsehoods.

We're featuring 10 of the most significant falsehoods that we've checked in the past year -- some of which also made our list last year.

Pants on Fire!

We'll start with those that earned our lowest rating, which we reserve for the most egregious, most ridiculous distortions.

• "If you sell your house after 2012 you will pay a 3.8 percent sales tax on it." This statement, which comes from a popular chain email, made our list last year too. But that hasn't stopped this ridiculous claim. Almost every week we hear from readers asking if home buyers are on the hook to pay for the health care plan. "THIS WILL BLOW YOU AWAY!!!!!" said one recent version of the email, adding that "under the new health care bill, all real estate transactions will be subject to a 3.8% sales tax." Not true. There is a new 3.8 percent tax on investment income for the wealthy, who might have to worry if they sell their houses at a substantial profit. But most Americans won't be touched by it. Pants on Fire!

• "The IRS is already planning on 19,500 new employees to administer" President Barack Obama's health care mandate. Former Republican presidential contender Jon Huntsman warmed up a debate at Dartmouth College in New Hampshire with this claim, trying to get a word in edgewise as his opponents attacked the law. It wasn't the first time we had heard variations on this claim, but it was one of the worst misstatements. Not only did the figure originate with Republicans on the House Ways and Means committee rather than the IRS, but also the IRS' own budget request estimated about 1,300 new employees would be needed in 2012 to administer the health care bill, mostly in non-enforcement roles. That earned him a Pants on Fire.

• An independent payment advisory board created by the health care reform law "can ration care and deny certain Medicare treatments." Talk about your oldies but goodies. Pat Boone is the frontman for a "scare granny" ad for the 60 Plus Association, targeted at five Democratic senators. The law creates a 15-member Independent Payment Advisory Board to suggest ways to limit Medicare’s spending growth, but the board may be overruled by Congress, it makes no decisions about individual care, and it is specifically forbidden from making any recommendations that would ration care, reduce benefits, raise premiums or cost-sharing or alter eligibility for Medicare. The 60 Plus Association was spending $720,000 on a campaign in Ohio targeted at the state's Democratic Sen. Sherrod Brown when PolitiFact Ohio ran the ad through the Truth-O-Meter and called it Pants On Fire.

• The national health care reform is "a government takeover of health care." We've heard it before -- so often that it was our 2010 Lie of the Year -- and we'll surely hear it again. This time it came from New Jersey Gov. Chris Christie. While the law gives the federal government a larger role in the health insurance industry, it relies overwhelmingly on the private market. In fact, the reform is projected to increase the number of citizens with private health insurance. As PolitiFact New Jersey noted, what Christie said has "been proven wrong over and over again, making his claim simply ridiculous." That's why it warranted a Pants On Fire.

• "Unions don't have to comply with Obamacare." That's what Republican controlled campaign group Crossroads GPS said in an ad. The claim focused on an element of the law that allows waivers to some employers. The health care law phases out annual benefit limits so that people wouldn’t be caught without coverage. The phase-out started in 2011, with new rules saying that all insurance plans must offer at least $750,000 in payouts per year. The number goes up every year so that by 2014 no caps at all will be allowed. Some unions were granted waivers from this provision, but so were corporations, which were not mentioned. The ad text says, "Over 185 union waivers. All exempt from Obamacare mandate," gives the impression that unions are unique in receiving them and also exempt from the entire law. Pants On Fire.

• The Affordable Care Act contains "a series of slush funds, set up to stay on the books automatically, with little or no oversight." So said House Majority leader John Boehner, R-Ohio, in a press release and video. PolitiFact Ohio found that the health care bill provides several pools of money that the secretary of Health and Human Services can disburse for purposes designated by the legislation. But slush funds? Merriam-Webster defines a "slush fund" as "an unregulated fund often used for illicit purposes." The money in question is designated for programs specifically defined by the law. Congress also has the power to oversee the bill’s implementation. Another Pants On Fire.

Wrong, but not as over the top

We also found plenty of statements that warranted the rating False. Here are some of the most significant:

• "Obama care … will kill jobs across America." The U.S. Chamber of Commerce made this claim in an ad attacking former Democratic Virginia Gov. Tim Kaine, who is running for the U.S. Senate, for his support of the health care law. PolitiFact had heard that claim before from House Majority Leader Eric Cantor, also of Virginia, and had rated it False. PolitiFact Virginia looked at the best projections available, based on how the law is actually written, and found that they do not suggest that the law will "kill" jobs. PolitiFact Virginia also looked at evidence provided by the Chamber to support its claim, including a brief from the Heritage Foundation, a conservative think tank that has been critical of the law. When the authors were asked whether their brief supported the claim, they responded that "our paper does not provide evidence that the (health care law) would cause job loss." So the Chamber got a False.

• "Preventive care … saves money for families, for businesses, for government, for everybody." This sweeping claim came from President Obama. Is preventive care a good idea? It can often save lives and keep patients healthier, and certain preventive measures may save money as well. But the findings of the Congressional Budget Office and and physicians who have studied the medical literature say otherwise, including a Feb. 14, 2008, article in the New England Journal of Medicine that noted that "the vast majority" of preventive health measures that were "reviewed in the health economics literature do not" save money. False.

• Eliminating "Obamacare" … "saves $95 billion a year." Republican presidential contender Mitt Romney liked this claim so much he made it at least twice in the past year, on Nov. 4, 2011, and again in January 2012. It's true that the law spends money providing tax subsidies to help people buy insurance and expanding the Medicaid health insurance for the very poor. But it also slows the growth of future spending on Medicare and imposes new taxes and fees to help offset the deficit. If you look at both spending and new revenue the actual savings from repealing the law would be much smaller -- $16 billion. And, over the long haul, repealing the law actually adds significantly to the deficit. So this claim earns a False.

• The Affordable Care Act "is not the law of the land." Florida's Republican Gov. Rick Scott used that claim as justification for refusing millions of dollars in grants to implement the health care law. Depending on how the Supreme Court rules, he might be right in the future, but he wasn't in December 2011. PolitiFact Florida found that federal judges had said parts of the law to be unconstitutional, and several more had said it was fine. But none had asked that the law not be implemented, leaving the last word to the U.S. Supreme Court, which is now on the case. False.

March 20, 2012: House TeaParty/GOP Budget Fails

Just Between You and Jeanne: The latest House Republican budget plan asks low-income and middle-class Americans to shoulder the entire burden of deficit reduction while simultaneously delivering massive tax breaks to the richest 1 percent and preserving huge giveaways to Big Oil. It’s a recipe for repeating the mistakes of the Bush administration, during which middle-class incomes stagnated and only the privileged few enjoyed enormous gains.

Each component of the new House TeaParty/Republican budget threatens the middle class while doing nothing to add jobs or grow our economy. It ends the guarantee of decent insurance for senior citizens, breaking Medicare’s bedrock promise. It slashes investments in education, infrastructure, and basic research, all of which are key drivers of economic growth and mobility. And it cuts taxes for those at the top, asking the middle class to pick up the tab. It’s a budget designed to benefit the top 1 percent at everyone else’s expense.

The Republican leadership in the House of Representatives today unveiled their latest budget proposal. Though there are many questions yet to be answered, one thing is clear ... they have learned nothing from the damaging budget battles of last year. This latest budget blueprint not only mirrors last year’s disastrous effort but also manages to reject what little bipartisan budget agreement was forged in 2011.

This year’s proposed House budget for fiscal year 2013 starting in October would once again end the Medicare guarantee, once again slash investments crucial to the middle class and to future economic growth, and once again cut taxes for the rich and protect taxpayer subsidies for oil companies. It once again ignores current economic challenges by offering no credible job-creation measures, and it once more places virtually the entire burden of debt reduction onto the shoulders of those least able to bear it.

On top of all that, the new plan, designed by House Budget Committee Chairman Paul Ryan (T/R-WI), proposes spending levels that are well below those that were agreed to by both Republicans and Democrats just eight months ago. And so once again this appears to be a budget specifically designed to cater to the richest 1 percent while poking everyone else—including the middle class and anyone who wants to see bipartisan agreement on the federal budget—right in the eye.

Here are the six most important failures of the new House budget plan. It would:

Undermine the middle class

Rig the system even more heavily in favor of the richest 1 percent

End the Medicare guarantee and raise health care costs for seniors

Undercut the economic recovery

Deviate dramatically from a balanced approach to deficit reduction

Renege on last year’s bipartisan budget agreement

Let’s look at each in turn.

Undermining the middle class

Nearly every important element of the new budget proposal from the Republican leadership in the House would weaken the middle class in America. First and foremost, the plan ends the Medicare guarantee of decent health insurance in retirement. It also slashes critical middle-class investments, such as education and infrastructure by 45 percent and 24 percent, respectively. It includes not a single new measure to help the nearly 13 million unemployed get back into a decent job. And on top of all that, the middle class would end up paying higher taxes as well.

Rigging the system even more heavily in favor of the richest 1 percent

But this budget plan isn’t content just to take from the poor and middle class... it also gives generously to the rich. It protects existing tax breaks for those at the top of the income spectrum, and then goes the next step and offers them huge new tax cuts. Rep. Ryan and his colleagues insist that the more than $3 trillion in tax cuts for the rich won’t result in lower revenue, but are deliberately vague about how the numbers could possibly add up. The reality is that the only way to pay for such huge tax cuts for the 1 percent is to make the 99 percent pick up the tab.

Ending the Medicare guarantee and raising health care costs for seniors

Their plan for Medicare is similar to their proposal from last year to end the program as we know it. This year’s plan, just like last year’s, calls for replacing the system we currently have with a capped voucher that seniors would use to purchase health care coverage on the private market. Unlike last year, however, the new plan claims to maintain traditional Medicare as an option that seniors could choose to purchase. (How ???) This sounds a little better, but in reality their latest health care scheme for senior citizens would inevitably result in a “death spiral” for Medicare that means higher costs for seniors.

Undercutting the economic recovery

Though we’ve recently enjoyed several months of solid job growth, our current economic recovery is by no means assured, and we still have a long way to go to get back to full economic health. Not only does the House Republican budget plan fail to propose even a single new idea for spurring job creation, it would also force an immediate swerve into severe austerity. It’s an economic prescription that, as Europe is finding out, will make matters much worse.

Deviating dramatically from a balanced approach to deficit reduction

TeaParty Rep. Ryan is fond of starring in videos in which he gravely lectures on the need to address our long-term fiscal challenges. He’s not wrong about that. We do need to address those challenges. And over the past 18 months, many a detailed plan have been put forth to do just that. Several of those plans have even garnered bipartisan support. What they have in common is a commitment to balanced deficit reduction ...which includes both spending cuts and revenue increases ... and realistic proposals with numbers that add up.

Ryan’s new plan doesn’t come close to fitting that bill. It’s definitely not balanced. Not only would he place the entire burden of deficit reduction on the middle class and the poor but also would actually give the rich additional tax breaks at the same time. And the numbers don’t even add up to real deficit reduction. The tax proposals alone would break the bank, and the spending cuts are unrealistic in the extreme. It’s no wonder that Ryan didn’t allow the Congressional Budget Office to evaluate the budget’s actual policy proposals.

Reneging on last year’s bipartisan budget agreement

The debt-limit debacle of last summer did have one positive outcome ... after narrowly avoiding a government shutdown several different times in 2011 it cleared the way for a smooth budget process this year. The debt-limit deal, known as the Budget Control Act, included an agreement on overall “discretionary” spending levels ... the money that Congress appropriates each year ... for the coming fiscal year. The Budget Control Act passed both houses of Congress with wide bipartisan majorities and was signed into law by President Obama in August last year.

For his part, President Obama adhered to the enacted law when he presented his proposed budget for FY 2013 earlier this year. The new House Republican plan, however, completely reneges on it. It’s tough to see how a bipartisan deficit reduction agreement can ever be reached when even previously agreed-to bipartisan deals fall through.

Conclusion

There is no question that the United States today faces enormous economic challenges. We lost over 8 million jobs during the Great Recession, the middle class just suffered through a decade of stagnant or even declining incomes while those fortunate enough to be in richest 1 percent are collecting an increasingly large share of the national income. And of course, the federal budget is in need of a serious recalibration to put it on a more sustainable path.

For most of these problems, the House TeaParty/Republican budget offers no solutions at all. It has nothing to offer the middle class aside from more struggles and fewer protections. It completely ignores widening income inequality except to exacerbate it by delivering the rich more tax cuts. It wouldn’t even balance the budget for decades, and in the meantime, by brushing off a previously agreed-upon budget law, it signals an utter rejection of the very concept of compromise.

In short, today was not a good day for American economic progress

March 2, 2012: Commonwealth Fund Reports on Income Disparities and Access to Health Care

First Commonwealth Fund health insurance tracking survey of US adults finds a profound income divide in health care. The Patient Protection and Affordable Care Act ("Obamacare" for all you troglodytes) will narrow these inequities starting in 2014.

February 29, 2012: Six Things Rich People Need to Stop Saying

#6. "Well, $500,000 a Year Might Sound Like a Lot, but I'm hardly Rich."

The amount that I have to reinvest in my business and feed my family is more like $600,000 ... and so by the time I feed my family, I have maybe $400,000 left over ..." -- Congressman John Fleming

What They Think They're Saying:

"Come on, we're all in this together! It's not like I have infinite money."

What We Hear:

"When my family's Aruba vacation went over budget, that was exactly like you being unable to afford medication for your child's excruciating chronic illness!"

Hell, you've probably heard it in real life, from a boss or some guy sitting nearby at Starbucks. "I guess I'm considered rich now! Well, if I'm so 'rich,' why am I broke at the end of the month?!?" Uh, I think it's because your mortgage is $3,000 a month, since you live in a [bleep]ing palace. And because you took your family on that Disney cruise last summer. And because you pay for your kids' college, so that, unlike us, they won't be crushed under six figures of student loan debt at age 22.

For people who are grinding through overtime just to keep up with their bank's late fees, this induces an urge to storm a gated community with pitchforks and torches and make those people go spend a year in a trailer park or in a city apartment so small that when you flush the toilet, little droplets of piss splatter onto the bed.

But don't get too mad at the rich for saying this -- we shouldn't, as a rule, get as angry at people for being oblivious as we should when they're being intentionally evil. Besides, they can't help it -- that obliviousness is hard-wired, a product of evolution that, really, kind of explains all class tension in the world. The rich, along with all of us, are biologically programmed to not notice their advantages.

It is apparently entirely possible to stay in that mindset, ignoring each new asset, right up until you're sleeping on a platinum bed under covers made of fur from a cloned woolly mammoth. If someone tries to offer you a little perspective and remind you of the tremendous advantages you no longer even notice, you'll reply with something like ...

#5. "Hey, I Worked Hard to Get What I Have!"

"Why, oh why, does the media bolster President Obama's rhetoric by using his term: 'the rich'? Would it not be more appropriate to say 'the successful,' or 'those who work harder? "

-- Letter to the Editor, Feb 21, 2012 Wall Street Journal

What They Think They're Saying:

"I'm not Paris Hilton! I work 70-hour weeks to make this salary!"

What We Hear:

"The only reason I have a hundred times more money than you is because I work a hundred times as hard!"

Most high-income earners do put in a ton of hours. Bill Gates seemed to never sleep (an employee once said that putting in 81 hours in four days still couldn't keep up with Gates' schedule). So yes, it's unfair that we tend to think that "being rich" means "lounging by the pool while an albino tiger massages our feet with his tongue." So, "Hey, I work hard for what I have!" is perfectly true. It's also insulting.

It's insulting for the exact same reason "Hey, I love my country!" is insulting: It implies that the listener doesn't. Otherwise there'd be no reason to say it. It implies a bizarre alternate reality where society rewards you purely based on how much effort you exert, rather than according to how well your specific talents fit in with the needs of the marketplace in the particular era and part of the world in which you were born. It implies that the great investment banker makes 10 times more than a great nurse only because the banker works 10 times as hard.

He doesn't.

And even stranger, it implies that money earned is a perfect indicator of a person's value to society -- if you're broke, it must mean you're a loser who contributes nothing to anyone's life. And that's downright bizarre when it comes from the same people who also go on and on about the importance of parenting and family values. Surely they've noticed that being a great stay-at-home parent makes you exactly zero dollars a year.

And volunteering to work at a shelter for battered women? Doesn't pay shit! Diving into a creek to save a toddler from drowning? It pays infinitely less than throwing a touchdown pass during the Super Bowl. So, mister rich person who clearly is not reading this, when we say you're "lucky," we're not saying you're lucky in the way that a lottery winner is lucky. We're saying that you're lucky if you were born in a time and place where the hard work you're good at (say, stock speculation) is valued over the hard work that other people are good at (say, store-clerking, or poetry-writing).

You can reply that if some other field paid more, you'd have just simply switched to it and been equally successful, due to your smarts and determination. You know, like how the smart and determined Michael Jordan was equally successful as a basketball player (six titles, $70 million a year) and baseball player (batted .202 in the minors) and team owner (his Charlotte Bobcats are currently 4-28).

So to sum it up: If you make good money, but have to work 80-hour weeks to get it, you're still lucky. Just swallow your pride and [bleep]ing acknowledge it.

#4. "If I Can Do It, So Can You!"

"We do not accept that ours will ever be a nation of haves and have-nots; we must always be a nation of haves and soon-to-haves." -- Mitch Daniels, Governor of Indiana

What They Think They're Saying:

"This is the land of opportunity, where anyone can make it! Instead of complaining, just go out there and get rich!"

What We Hear:

"If everyone at my country club makes good money, it can't be that hard!"

This is such an impossibly strange idea that I'm not sure if the people saying it actually believe it. But ... I guess our entire philosophy about money kind of revolves around this premise -- that there is no poor or working class, but only people who have chosen to not buckle down to the task of getting rich (and thus deserve whatever salary, insecurity or poor work conditions they get). So there should be no talk about improving the lives of the non-rich, since any of them can simply choose to elevate themselves out of that group, right?

Seriously, now. How much time do you really have to spend off your goddamned yacht to see that this isn't true? You don't even need to leave the dock -- there's a guy standing right there who you pay to fix your boat's engine. You know that 1) you absolutely need guys like him and 2) he will never get rich doing what he does. He could be great at his job, he might be the Michael Jordan of mechanics, he might work 100 hours a week -- it doesn't matter. Sure, if that one guy somehow also has the head for management and finance and the networking skills, he could maybe open his own chain of yacht repair shops. But they can't all do that.

So "anyone can get rich" isn't just untrue, it's insultingly untrue. You can't have a society where everyone is an investment banker. And you can't have a society where you pay six figures to every good policeman, nurse, firefighter, schoolteacher, carpenter, electrician and all of the other ten thousand professions that civilization needs to survive (and that rich people need in order to stay rich).

It's like setting a jar of moonshine on the floor of a boxcar full of 10 hobos and saying, "Now fight for it!" Sure, in the bloody aftermath you can say to each of the losers, "Hey, you could have had it if you'd fought harder!" and that's true on an individual level. But not collectively -- you knew goddamned well that nine hobos weren't getting any hooch that night. So why are you acting like it's their fault that only one of them is drunk? You're intentionally conflating "anyone can have the moonshine" with "everyone can have it." And you are doing it because you're hoping that we will all be too busy fighting each other to ask why there was only one jar.

But if we do ask, the response will probably be something like ...

#3. "You're Just Jealous Because I Made It and You Didn't!"

"I think it's about envy. I think it's about class warfare. When you have a president encouraging the idea of dividing America based on the 99 percent versus one percent -- and those people who have been most successful will be in the one percent -- [it] is entirely inconsistent with the concept of one nation under God." -- Mitt Romney

"Part of it is jealousy. I stand by that. And here's why I don't have a lot of patience for that. My parents, they never played the victim card. My parents never said that we hope the rich people lose something so that we can get something." -- Herman Cain

What They Think They're Saying:

"It's wrong to tear down others instead of improving your own life!"

What We Hear:

"All complaints about unfairness in the system are the equivalent of 12-year-old girls spreading mean rumors about the popular ones!"

Look, I get it. You worked your nuts off to start a business (or get your MBA or become a lawyer or whatever) so that you can finally have what you dreamed about when you were in high school: a huge swimming pool in the shape of the Van Halen logo. You obey the law, you pay your taxes. Then suddenly, this Occupy Wall Street freak show declares you to be the "one percent," and therefore the enemy. Obviously you've done nothing wrong, so their hatred must be irrational. They only hate you because you're rich!

Hell, let's look at the annual poll of the most admired people in America for 2011. There are 20 people on that list, and all 20 are rich enough to be in the "hated" 1 percent. I count four billionaires on that list, and another person who is a member of a billionaire family. Now go into the bedroom of any child in America. Even before the parents have the chance to call the cops, you'll see posters of pro athletes and Disney pop stars and famous actors dressed as action heroes. Millionaires, all.

That's because all of our [bleep]ing heroes are millionaires.

Hell, every Christmas we celebrate the tale of the wealthy Ebenezer Scrooge in A Christmas Carol. We hate him in the first part of the story, and then we love him by the end. Not because he gave away all of his wealth and became poor (he didn't), but because he stopped acting like a shithead. Do you get the incredibly subtle and nuanced message of that story?

You might be tempted to say, "What business is it of yours what I do with my money! Whether I use my cash to give to the poor or for gold paint to spread on naked women like goddamned Goldfinger, it's none of your business!" Oh, dude, wouldn't life be easier if that were true? If we didn't have to answer to anybody, or feel social pressure based on the choices we make?

But, sadly, all civilization and morality rests on the fact that we have to answer to each other -- the only reason I haven't murdered a dozen people in traffic is because society will bring consequences if I do. And when you're powerful (due to being a politician, or a rich man, or having a position of authority like a priest or police officer), we turn up the heat even more. See, your power eliminates many of society's checks on your shitheadery (i.e., you can afford better lawyers), and so we have to make up for it in other ways. It's how we keep you in line. The fact that you don't like it only proves that you need it.

And when we hate people, it's always for the same reason: They refuse to acknowledge that their power brings with it any responsibility. It's why we hate bullies and dictators and supervillains. It's why we hate people who benefit hugely from society and then pretend like they're living on an island with a population of only them.

Which leads us nicely to ...

#2. "You Shouldn't Be Punishing the Very People Who Make This Country Work!"

"There is a deeply disturbing message coming out of the Occupy Wall Street movement ... Simply put, it boils down to this: We must punish success ..." -- John E. Kramer, Washington Times

"There'll always be those who earn more than I do, and I say, God bless them. I'm sure they work hard, did what was necessary to get ahead and should not be penalized for or feel ashamed of their accomplishments." -- Bernard Goldberg

"The top 1 percent of wage earners in the United States pays 40 percent of the income taxes and the top 10 percent of wage earners pay 90 percent of the income taxes ... the very people that we expect to reinvest in our economy and to create jobs in our country." -- Speaker of the House John Boehner

"I never got a job from a poor person." -- Sean Hannity

What They Think They're Saying:

"If you punish success, society will collapse into communism!"

What We Hear:

"I have to pay higher taxes than my gardener! Waaaah!"

There are two elements to this, and I don't want to get too much into the first one because it gets into a tedious debate about tax policy and shit like that. But, very briefly, it's the concept of "You have your job because of a rich person."

This is true, I suppose, if that rich person inherited their money and you are personally working for them as a gardener. But if you are working at a Toyota factory, your paycheck doesn't come from under the mattress of the owner of the company. That money came from lots and lots of regular Joes who bought Toyota cars. The guys in suits are just middlemen between the supply and the demand.

So as for the popular talk radio joke, "I've never gotten a job from a poor person"? Well, Sean, a lot of your listeners are poor, and your advertisers are paying you with money they made by selling goods to those poor people. So, yeah, the cash you make does in fact bear the smelly fingerprints of the lower classes. It's the same for somebody working at Walmart, or a grocery store, or a liquor store. You didn't get your job from a poor person, but collectively their money made it happen. Which is just a long way to say the obvious: That rich people don't make the world go around. It takes everybody.

But the second part is this idea that asking the rich to pitch in is "punishing" them.

So, Rich Guy, let me explain this as calmly and logically as I can:

Are you [bleep]ing 6 years old? Do you still think mom made you clean up your room because she was mean? In the adult world, we get asked to do things because shit needs to get done. It has nothing to do with fairness, it has nothing to do with judging you. It has nothing to do with you at all. There's a whole world out there, with people who need helping and projects that need accomplishing.

You're only being asked to pitch in because you have the resources. You're not a tall person who us dwarfs are jealously trying to cut down to size. You're a tall person being asked to get something down from a very tall shelf because nobody else can [bleep]ing reach it.

Really ... I'm not trying to be condescending. We're all adults here.

Just ... here, how about this: Remember when Yoda told Luke he had to confront Darth Vader if he wanted to be a true Jedi? Do you think that was because Yoda hated Luke and assigned him that awful task to punish him? Was it because Yoda was jealous? Of Luke's ... height, or whatever?

Or was it because it needed to be done and Luke was the only one who could do it? Because he had the Force?

See, in our society, money is the Force.

Yes, I know you think you already give more than your fair share. So did Luke. So does everyone. Welcome to the human race -- we all think we're getting the shit end of the deal.

#1. "Stop Asking for Handouts! I Never Got Help from Anybody!"

"I've been on food stamps and welfare. Did anybody help me out? No." -- Craig T. Nelson

What They Think They're Saying:

"I pulled myself up by my bootstraps!"

What We Hear:

"Because I didn't inherit millions of dollars, impoverished children don't need food stamps!"

All right.

You "never got help from anybody."

All right.

Let's say you scratched and you clawed and climbed the ladder of success. You never took a welfare check or charity, you worked three jobs to get through college. And at the end of it you look back on your labors and feel justified in saying, "I never got help from anybody."

So ... you were never a child? From birth, you were hunting and gathering your own food? You never had a mother to "hand" you milk?

You're completely self-educated? At age 4, you sought out your own knowledge, and paid teachers out of your own pocket?

I don't think you did. I'd have seen something about it on the news.

I think your parents poured untold resources into your hungry mouth. I think you had a roof over your head that was paid for by other people, I think you went to schools that were built and staffed and paid for by other people, I think you felt safe because the streets were patrolled by other people, I think you drove to your three jobs on roads paved by other people, in a car built by other people and burning oil that was drilled by other people in a nation whose borders were defended by other people.

Look, I understand why "I ain't asking for help from nobody!" individualism works as an attitude, or a philosophy. No, you shouldn't wait for help to come along. I'll even agree that we don't impress that message hard enough on kids when they're growing up. Kids, if you're reading this, and you [bleep]ing shouldn't be, but if you are, let me tell you now:

The world doesn't give a shit about you, and you'll have to wrestle it for every good thing you get.

But, for the rich, this somehow gets extended to the absolutely delusional idea that they exist on a purely self-sufficient island, in an ocean full of shiftless layabouts always asking to borrow their stuff.

And you literally hear people express it this way -- in libertarian circles they refer to it as "Going Galt" (as in John Galt, the hero of Atlas Shrugged) -- fed up rich people just disconnecting from this annoying "society" thing that's bleeding them dry. If you live in my part of the country, you'll hear hard-working, rural farmer types say, "I got my own piece of land, I grow my own food, all I want is to be left alone." All right, well tell me this, cowboy:

Let's say some mean, even richer guy, like a wealthy gangsta rapper, hired a bunch of armed thugs to come take your farm. What would you do? Your shotgun won't fend them off -- they have a hundred bigger shotguns. What will you do, call the cops? That is, other people, who will risk their lives while being paid with still other people's tax money, who will try these bad guys in a court funded by yet other people's tax money, under laws passed by legislators paid with other people's tax money? Whoa, slow down there, welfare queen!

But if none of that stuff existed, there would be nothing stopping Jay-Z from taking your farm. In other words, you don't "own" shit. The entire concept of owning anything, be it a hunk of land or a house or a [bleep]ing sandwich, exists purely because other people pay other armed men to protect it. Without society, all of your brave, individual talents and efforts won't buy you a bucket of farts.

So when I say "We're all in this together," I'm not stating a philosophy. I'm stating a fact about the way human life works. No, you never asked for anything to be handed to you. You didn't have to, because billions of humans who lived and died before you had already created a lavish support system where the streets are all but paved with gold. Everyone reading this -- all of us living in a society advanced enough to have Internet access -- was born one inch away from the finish line, plopped here at birth, by other people.

So when somebody else asks for your help, in the form of charity or taxes, or because they need you to help them move a refrigerator, you can cite all sorts of reasons for not helping ("I think you're lying about needing help" or "I don't care" or "I'm too tied up with my own problems"), but the one thing you can't say is, "Why should you need help? I've never gotten help!" Not unless you're either shamefully oblivious, or a lying asshole.

You get the idea.

February 23, 2012: TeaParty-Republicans Set to Kill Independent Payment Review Board; Advance Their Privatization Plans for Medicare.

House Republicans are poised to advance legislation next week to repeal President Obama’s health plan's Independent Payment Advisory Board (IPAB) ... the one real and potentially most effective mechanism to cut future Medicare costs ... and provide a clear model for controlling the inexorable rise in all U.S. health care costs. the Medicare cost-cutting board, a provision enacted in the health care reform law. The Energy & Commerce Committee is set to mark it up next Wednesday March 1), and the repeal bill already has enough cosponsors to pass the House. It’s not expected to survive the Senate or Obama’s veto pen, but the debate over this provision cuts to the heart of the battle over how to save Medicare in the long run.

Some background: The Independent Payment Advisory Board (IPAB) is set to take effect in 2014, and would comprise 15 President-appointed and Senate-confirmed experts charged with holding down Medicare per-beneficiary spending by restricting reimbursements to providers. It is forbidden from cutting payments to beneficiaries. Congress can override the panel is by passing an alternate way to save the same amount of money, or with a three-fifths Senate majority. The health care industry has been outspoken in its hatred for IPAB. Republicans are united in their effort to kill it, and even some House Dems are on that page.

The question now is: Why is the party that’s hell-bent on reining in Medicare pushing to repeal this powerful tool for doing just that? Part of it is to score political points by slicing off a key piece of the Affordable Care Act. But more importantly, Republicans don’t want to keep Medicare in its current form. Many of them don’t think that’s feasible. They want to transition it to a privatized model a la the Paul Ryan plan, where seniors get a fixed subsidy ... or “premium support” ... to buy their own insurance on a private health exchange, effectively ending direct government payments for health care and turning what will be left of the "Medicare" program over to the ravages of the for-profit health insurance industry ... the industry that has contributed mightily to increasing overall U.S. health care costs while rewarding executives and stockholders with multi-million dollar bonuses and tax-free capital gains.

With Medicare costs exploding and the trust fund set to be depleted by 2024, the two parties increasingly agree that the program’s per-beneficiary spending ought to be held down to roughly per-capita GDP plus 1 percent, a significant cut from projections. The disagreement is on how to get there. Republicans want to achieve that by reducing benefits and reshaping Medicare itself; Democrats believe that money can be saved by cutting improper or unnecessary payments to providers.

Republican Senatecritters Tom Coburn (OK) and Richard Burr (NC) recently unveiled a plan to transition Medicare to a “premium support” model with larger subsidies than the Ryan budget ... and repeal the IPAB immediately. “One thing that we do in this bill right up front is we eliminate IPAB,” Burr said. “We believe that the way you get efficiencies in health care is structural changes ... it’s not an independent board that sets or cuts reimbursement or scope of coverage.”

That’s why the debate over IPAB is more important than meets the eye: it’s the best idea Democrats have come up with to keep Medicare alive over time in its existing “defined benefit” structure. IPAB is their most credible weapon against the push to move to a voucher system. But repealing it adds momentum to the increasingly industry-backed GOP push for a “defined contribution” model that ends the coverage guarantee for America’s seniors.

Housecritter Phil Roe (R-TN), the chief sponsor of the repeal bill, has warned that IPAB could become another Sustainable Growth Rate (SGR) ... the dreaded “doc fix” problem ... by setting in motion provider pay cuts that would have a destabilizing effect on the health care system, and which Congress wouldn’t let go into effect. His bill has 224 cosponsors, including over a dozen Democrats. Partner legislation in the Senate has a number of signatories, all Republicans.

Coburn was asked whether the IPAB could achieve the basic goal of holding down Medicare spending. “You can do it that way. That’s right,” he said. “But remember what that does ... that puts the government right in between you and the decisions made very personally by you and your caregiver… And so I reject that way.”

That’s where the great divide lies. As I have preached to a sometimes hostile audience for years, health care services will have to be rationed and not just in Medicare and Medicaid, but across the board. The question is who does the rationing: a government-sponsored independent panel or private insurance companies.

Democrats currently have the advantage because unlike the GOP plan, the IPAB is already signed into law. But there’s a potentially fatal flaw in their plan: Senate Republicans have already threatened to filibuster confirmation of any members to the panel. So unless Democrats defend the need for the IPAB and persuade the public that the alternative is a Ryan-style plan that privatizes Medicare, it’s going to be a tough slog to keep traditional Medicare around over the long run. So far neither Obama nor congressional Democrats have talked much about IPAB.

That’s why moves like next Wednesday’s markup ... and the eventual, expected House passage of IPAB repeal ... serve as an ominous sign for those who don’t want to drastically alter Medicare’s structure. Republicans are playing the long game, attacking the IPAB while introducing a variety of “premium support” proposals that are less harsh than Ryan’s version. And although renditions like Ryan-Wyden and Coburn-Burr keep traditional Medicare alive as a sort of “public option” in the insurance exchanges, the eventual aim for conservatives is to ultimately phase out Medicare as a program that directly pays for health care services.

For now Democrats are resting on their laurels. If that doesn’t change, history might look back on this episode as an important milestone in the battle to end Medicare.

February 13, 2012: Mitt ("Cayman Islands") Romney isn't Against Every Bailout, Just ... Well, Just One of Them

February 10, 2012: Is Romneycare Working in Massachusetts?

Voters are hearing a lot about health care this year. Republicans want to make the 2012 elections a referendum on the health care law that President Obama signed two years ago. That law was largely based on one that then-Gov. Mitt Romney signed into law nearly six years ago in Massachusetts. Romney is now a leading GOP presidential contender, and that has made the Massachusetts universal health care law a political football. Romney's rival Rick Santorum recently called it "an abject failure."

But "Romneycare," as Santorum and others call it, isn't controversial in its home state. And a lot of people there don't call it Romneycare because it took the support of a lot of other people … Democratic legislators, business leaders, insurers, hospitals and doctors, consumer groups … to get it passed. But it's true that Romney got the ball rolling. In a 2006 interview (Romney seems to have a lot of “short-term” memory loss these days, forgetting that so much of what he has said has been recorded some place and is readily available to refute his 2012 “claims.”), Romney said he got the idea from talking to Massachusetts business leaders.

"The key insight was this: People who don't have insurance nonetheless receive health care — and it's expensive," Romney said.

Romney saw a state fund set up to provide free care … paid for by a growing surcharge on private insurance premiums — was spending a billion dollars a year.

"My question was, could we take that billion dollars and help the poor purchase health insurance — let them pay what they could afford? We'd subsidize what they can't," Romney said.

Universal Health Care: How It's Working In Massachusetts



The percentage of uninsured people has gone down. Nearly everybody in Massachusetts has health coverage, while the rate of uninsured nationally has gone up to one in six. And he proposed a requirement that people buy private health insurance if they're able. That's the "individual mandate" that has become a curse word in Republican politics these days.

"We're going to say, 'Folks, if you can afford health care, then, gosh, you'd better go get it,' " Romney said back in 2006. " 'Otherwise you're just passing on your expenses to someone else.' That's not Republican, that's not Democratic, that's not Libertarian — that's just wrong."

Flash forward to 2012. Romney's successor, Democrat Deval Patrick, says the health plan Romney launched is no abject failure — it's working.

"I think it's just been a terrific success," Patrick said in an interview. "And [it's] a statement of value — about our values here, about how people aren't all on their own, that we are in this together."

Patrick says no state can match Massachusetts' record of getting more than 98 percent of its citizens insured for health care … and virtually every last child. And, he boasts, "It has cost the state about 1 percent in additional new state spending." The Massachusetts law has had strong and steady support … and little opposition. Last year, an attempt to repeal the "individual mandate" … the part that requires most people to have insurance … couldn't get enough signatures. Last week, only 39 people had "liked" its Facebook page.

To get an idea of how it's working at the ground level, I stopped by the office of Dieufort Fleurissaint, a self-employed Haitian-American businessman. He has a tax prep and insurance business. He's also an evangelical minister who worked with the group Greater Boston Interfaith Organization, which helped get the health law passed.

"Close to 500,000 people didn't have health insurance," Fleurissaint says. "Now, because of the passing of the law, they have health insurance." And one of them, it turns out, is Fleurissaint. He used to be a mortgage broker, but his business crashed in 2008. He couldn't pay his health insurance premiums. But under the new law, Fleurissaint qualified for state-subsidized insurance. "My premium ... dropped from $1,200 on a monthly basis [to] $770 for the same coverage for the same family of four," he says. And when his income dropped again during the recession, so did his health insurance costs. "The law has been extremely good for me," he says, but he admits that not all his business colleagues like the law. "They complained that they were forced, basically obligated to purchase health insurance," Fluerissaint says. "So I explained to them that it's much better to have health insurance than not having it."

In fact, despite some initial grumbling, more Massachusetts businesses of all sizes have begun offering insurance. Even many of the most ardent opponents to "Obamacare" nationally, the National Restaurant Association and the National Federation of Independent Businesses, have seen their local state chapters in Massachusetts break from the national party line. The Massachusetts Restaurant Association, it said it didn't know of any members that don't offer coverage.   Similarly, Bill Vernon, who heads the Massachusetts office of the National Federation of Independent Businesses, says the law "works for Massachusetts." The NFIB is a plaintiff in one of the lawsuits challenging the constitutionality of the Obama health plan that will be argued later this month before the U.S. Supreme Court. But in Massachusetts, Vernon says, "my guess is that we would probably be pretty much split on the issue of whether to repeal the law or not. That suggests repeal is not something we would favor. And I don't think it's politically realistic, either."

Likewise, the individual mandate has not met with nearly the resistance that many predicted. "The sky did not fall," says Andrew Dreyfus, president of Blue Cross Blue Shield of Massachusetts, the state's largest insurer. "And by the way, we have much stronger penalties around the individual mandate than the national law has, and despite that, the sky did not fall." The penalty for not buying insurance can be on the order of $1,200 a year for a 37-year-old single person in Boston. But only about 1 percent of taxpayers end up paying any penalty. Meanwhile, a new study in the journal Health Affairs shows that more Massachusetts citizens are seeing a doctor regularly, fewer are going to emergency rooms for care, and the percentage who rate their own health as "good" or "excellent" is going up.

But that doesn't mean everything about Massachusetts health care is wonderful. The 2006 law didn't do anything about controlling the state's health costs, which were already among the nation's highest. So now the conversation in Massachusetts has turned to cost control. And some very interesting things are beginning to happen. They didn't happen overnight. When Patrick took over the governor's office in 2007, he called together top insurers, hospital executives and doctors to talk about controlling costs. He says it was an exercise in frustration.

"I finally lost my patience," Patrick says. "Because they'd sit around the table and everyone would start their response the same way — 'Well, governor,' they'd say, 'it's complicated.' " Patrick says the insurers would point to the hospitals, the hospitals would point to the doctors, the doctors would say it's malpractice suits or red tape or the imaging center down the street. Patrick says he got fed up. "I understand it is complicated," he says. "But the point is, we have to stop being defeated by that complexity." So, two years ago, the governor directed his insurance commissioner to exercise a little-used power to turn down a requested rate increase because it was excessive. Not every state has this power.

Insurance companies were outraged. But Dreyfus of Blue Cross Blue Shield now says it was a pivotal point. "It sent a message to the entire health care community and the business community that we had to change," Dreyfus says. And change seems to be happening. Insurers have torn up their contracts with hospitals calling for annual reimbursement increases of 8 percent and 10 percent, and negotiated agreements providing for 3 percent, 2 percent and even zero percent increases. Blue Cross Blue Shield has persuaded some of the state's biggest hospitals, and thousands of doctors, to accept a new kind of payment. Instead of getting paid every time they do something … a venerable system called fee-for-service that encourages them to provide more and more services — they're paid a fixed amount each month for each patient. That was tried in the 1990s, and it failed, largely because of backlash over its incentive to stint on care. The new wrinkle is that this time hospitals and doctors have to meet 60-some different quality measures to show they're not cutting back on care.

Dreyfus says a third of his company's 2.8 million subscribers are now on these so-called "global payment" plans, and he's hopeful that most of the state will be on this kind of reimbursement within the next two to three years. The various steps seem to be working to moderate Massachusetts' historically high health care inflation rates. "We've got some more work to do here," the governor says, "but average premium increases were almost 17 percent two years ago. They are less than 2 percent right now." But he doesn't trust that it will automatically go on that way. Patrick and many others, inside and out of government, say Massachusetts now needs some legislation to lock in these changes and go further … cut down on administrative costs, reform the malpractice system and other innovations.

The big idea you often hear these days is to hold total Massachusetts health spending to a target tied to the state's overall economic growth. "I want to assure ... that it's sustainable," Patrick says, "that we don't continue to have increases above the rate of growth in the economy." Otherwise, he says, health care will "eat up everything else."

Legislators, who are wary of tampering with a health sector that accounts for 20 percent of the state's economy, are expected to come up with their own proposals this spring. But significantly, no one is talking about repealing the 2006 law. Not even businessmen like Fred Difinis, who runs a small business selling parts for playground equipment. He's unhappy with the Massachusetts health plan because it requires him to buy coverage for prescription drugs, which he says he doesn't need. "I'm not sure I necessarily want to see the law repealed," he says. "What I want to see is some balance on the cost side of the equation."

If Massachusetts can do that, it might become a national model — again.

February 8, 2012: Republican House Hearing on 'Private Market' Solutions to Health Care Costs: Result? Implement Obamacare

What if a Republican House Committee held a hearing to consider ways to use private market forces to help control health care costs and found out that the best ideas and suggestions offered by witnesses are ALREADY in the Patient Protection and Affordable Care Act (read: "Obamacare")?

House Ways and Means Committee Republicans Tuesday turned to the private market for inspiration on a new physician payment system, while Democrats emphasized the role government can play in improving the quality and efficiency of care. Health Subcommittee Chairman Wally Herger said at his hearing that it was important to hear from the private sector about ways "competition and market forces" could be incorporated into the Medicare program to reduce costs. He again called for a full replacement of the sustainable growth rate (SGR), the often-ignored formula that determines reimbursement rates for physicians who see Medicare patients.

"Our end goal in all of this remains addressing the Sustainable Growth Rate formula through comprehensive physician payment reform done in a fiscally responsible manner," said Herger, R-Calif., at the hearing.

Witnesses discussed advancements their groups have made to develop new payment methods, including accountable care organizations and medical homes, which the 2010 health care reform law (PL 111-148, PL 111-152. i.e., "Obamacare") encouraged. The keys to success for new payment systems are transparency and physician involvement, the witnesses agreed.

"Without full engagement of physicians, explicit vision and purpose, and a focus on community ... any payment system will fall short."

-- David Share, vice president of value partnerships at Blue Cross Blue Shield of Michigan warning that providers will resist any system that payers attempt to impose without first getting their input.

Lewis G. Sandy, senior vice president for clinical advancement at UnitedHealth Group, said his company had implemented successful assessment programs that rate physicians' quality and effectiveness and give feedback to both providers and consumers. He said that making the quality criteria transparent helped providers know what they were doing well and where they could take action to improve. His group is also trying pilot programs in 13 states for patient-centered medical homes, primary care practices designed to improve care coordination for the chronically ill.

John Bender, the president and CEO of Miramont Family Medicine in Colorado, said the committee should "compel the Department of Health and Human Services to immediately deploy the patient-centered medical home standard nationally." He said it would help the primary care workforce, increase quality of care and reverse rising costs. Share and Sandy said their groups were also working on accountable care organizations, which bring providers together under new payment incentives to help streamline care.

Several witnesses said that the government and private payers could work together to encourage new payment system advances in both sectors. Len Nichols, director of the Center for Health Policy Research and Ethics at George Mason University, said that collaboration would help providers have one set of standards to follow, rather than forcing them to meet a variety of different requirements from private payers and the government.

American College of Cardiology CEO Jack Lewin said Congress should move quickly on payment incentives to spur progress. He praised the new grant program under the Center for Medicare and Medicaid Innovation but said it would take a few years before the program has real results. Lewin suggested that CMS run a series of national demonstration programs for payment models wherein the savings are shared between Medicare and the provider community. That will help payers move away from the fee-for-service model, without losing income due to the reduced volume of services. With a different financial incentive, providers would be motivated to adopt new models more quickly, he said.

Nichols said the health care law brought about the end of "business as usual," and that all groups should work together to find savings—or else face blunt cuts across the board.

"We could cut our way to fiscal balance, and in so doing, reduce access to care for millions of Americans. I fear this pathway would likely fail. Alternatively, we could align incentives so thoroughly that we actually link the self-interest of clinicians with our common interest in cost reduction and quality improvement while covering all Americans."

February 7, 2012:   See Sue Run ... a Childhood to Adult Reader

February 6, 2012: The "Doc-Fix" ... GOP Plans to Screw Over the Medical Community to Fight Obama

But first a little history, the backstory: Listen my children and learn, there actually was once a Congress and a President who worked together to try to solve a national problem, Way back before the turn of the century in 1997, both Houses of Congress were controlled by Republicans and the President was a Democrat who they would soon try to impeach. Nonetheless, they found common ground in trying to balance the federal budget. Yes, I know that's almost impossible to fathom in today's dysfunctional political world, but yes, it did happen. Congress passed something called the "Balanced Budget Act of 1997" ("BBA") which among a variety of other actions established a baseline for future Medicare provider payment increases, something called the "sustainable growth rate" or "SGR." Under the SGR, using a very complicated formula, an annual cap was set on how much and how fast Medicare payment rates could go up each year for Medicare providers (hospitals, doctors, nursing homes, home health agencies, and durable medical equipment manufacturers). The result, starting in 1999 and for two years thereafter, using the BBA, the United States of America actually had a budget surplus and had started to pay down its national debt. Yes. kids, a SURPLUS! Of course, we all know what happened after that in 2001 under the Bush tax cuts for billionaires and two senseless wars, budget deficits blew through the roof and deregulation led to mayhem in the financial markets and the virtual meltdown of the nation's financial system. But that's another story.

Back to the story of the BBA. The annual limits set by the SGR formula on provider reimbursement played havoc in the provider community. Starting in 1998, hospitals, doctors, nursing homes, home health agencies, and durable medical equipment manufacturers saw their Medicare reimbursement capped annually at 1-2 percent under the actual rate of growth and inflation. For a couple of years, you couldn't give away a home health agency and many of the nation's for-profit nursing home chains faced bankruptcy and financial restructuring. Every year, starting in 1999, hospitals, doctors, nursing homes, home health agencies, and durable medical equipment manufacturers came running to Congress and asked that their BBA/SGR pay-cuts be restored. And every year since 1999, Congress has told hospitals, nursing homes, home health agencies, and durable medical equipment manufacturers to take a long walk on a short pier. Well mostly, there was a tinkering here and there but for the most part, non-physician Medicare providers have had to find ways to eat their Medicare payment cuts and stay in business. Not so among physicians, almost every year since 1999, doctors have gotten their BBA/SGR pay-cuts restored and in a couple of the years, Congress threw in an extra 1/2 to 1 percent sweetener as well. The doc lobby has paid off well. These annual "give-backs" to the docs have come to be called the "doc-fix" and more recently, despite past bipartisan support for the medical community, have led to near stalemates and close-downs of Congress as Republicans have demanded cuts in other government expenditures to pay for them, mainly cuts in social services benefits to the middle class and poor.

Fast forward to fiscal year 2012 ... and if the accumulated BBA/SGR pay-cuts were to be retroactively applied to Medicare physician reimbursement, the docs would face approximately a 28% cut in their Medicare pay, effective March 1, 2012 (when the last Congressional "doc fix" is scheduled to expire). The 2012 "doc-fix" was supposed to have been settled earlier this year when Republicans and Democrats agreed to extend the payroll tax cuts until after this fall's elections. But no, Republicans now see another chance to "blame Obama" and enflame their base, even if it hurts the nation in the process. Anything to defeat that Muslim, Kenyan usurping terrorist in the fall and deny him a second illegal term. But I digress... back to the 2012 "doc-fix" story.

House GOP leaders are now set to shoot down a silver-bullet pay-for to fix Medicare physician payment rates, sources close to leadership tell me, even though the idea has strong support among Democrats and some key Republican lawmakers. The so-called “doc fix” is being negotiated as part of the payroll tax cut package and momentum to use war savings to eliminate the Medicare flaw has recently halted due to GOP divisions over the idea.

The idea of using unspent Overseas Contingency Operation (OCO) funds from troop withdrawals Iraq and Afghanistan has the support of top Democrats as well as influential Republicans like Senate Minority Whip, Senatecritter Jon Kyl (R-AZ) and GOP Doctors Caucus chairman Housecritter Phil Gingrey (R-GA). While President Obama and Dems want to tap into the $838 billion fund for infrastructure as well, GOP backers say it shouldn’t be used for anything other than a doc fix.

But two former Republican staffers turned health industry lobbyists say House GOP leaders are now opposed to tapping into the money even for that.

One of the sources said he heard directly from House Republican leadership that the prospect of using OCO money for a “doc fix” is moot. The second source added that leaders have issues with it from a messaging and process standpoint. Both agreed the GOP caucus is divided on the idea and making things tough for leadership — while also exacerbating headaches for physician and hospital groups that are relentlessly pushing for the offset.

The provider community is still salivating about it as the silver bullet. The desperation is palpable. In their view, this like passing up an opportunity to go to confession and start with a clean slate. Multiple House GOP leadership aides, will not confirm their position but declined an opportunity to deny or challenge what has been leaked. Speaker John Boehner dodged a question about it at his press conference last Thursday.

The current Medicare Sustainable Growth Rate (SGR) formula contains steep 27.4 percent reductions to physician reimbursements that take effect March 1, which could destabilize the health care system and which both sides overwhelmingly want to avoid. But many Republicans prefer to fix it with real spending cuts, and see the war savings fund as fake money that shouldn’t be used as an offset because it wouldn’t otherwise be spent anyway.

On one side of the GOP divide are Kyl, Gingrey and other members who have close ties to the physician community and see OCO as their best opportunity to fix the problem for good — they argue that both OCO and SGR are gimmicks so they can cancel each other out. But that view is opposed by staunch conservatives who see OCO as a sleight of hand and fear that it could open the door to letting Dems use the fund for additional stimulus measures. Some GOP lawmakers also want to use the “doc fix” as leverage to cut health care reform and Medicare, which House Republicans passed in their December payroll tax package.

Top Republicans say they want at least a two-year “doc fix” if not a permanent solution, although given the current polarized climate could lead to yet another short term patch of between two and six months, despite their hopes to the contrary.

The split on the war savings offset is one of many reasons negotiations over the payroll tax cut package have hit a brick wall this wee. Senate Democrats have indicated that they intend to push forward with the OCO offset in the fallback plan they are developing to save face in case the negotiations fail. Dems have been quick to note that House Republicans counted OCO savings in the Paul Ryan budget they passed last year.

The idea is seen as dead in the payroll talks unless House GOP leaders sign off on it.

February 2, 2012: The Super Pac, Super Donors

What are we to make of the funding of these "Super PACs" ... when 80% or more of the so-called funding comes from just a handful of mega-millionaire contributors, all trying to protect their favored tax status, most at the same time continuing to send American jobs overseas.

Restore Our Future PAC (Mitt "Cayman Islands" Romney): 83% of its funding from just 58 donors ($14,825,000/$17,947,953)

Make Us Great Again (Rick "George W" Perry): 87% from just 28 donors ($4,750,000/$$5,485,170)

Our Destiny PAC (John "Who?" Huntsman): 87% from just 4 donors ($2337,040/$2,680,290)

Winning Our Future PAC (Newt "Mad Dog" Gingrich): 96% from just 5 donors (#2,000.000[$2,080,250)

Endorse Liberty PAC (Ron "Dr. No!" Paul): 88% from just 1 donor: ($900,000/$1,020,055)

Red, White and Blue PAC (Rick "Mad on Dog" Santorum): 80% from just 2 donors ($587,000/$729,935)

Overturn Citizens United and Save American Democracy from the Oligarchs.

February 1, 2012: Oh Horror of Horrors: For-Profit Medicare Advantage Plans are Suffering

The for-profit health insurance industry is going absolutely apoplectic over claims being made by the Obama Administration that the industry's predictions regarding the future of the Medicare Advantage program are being proven false. The industry and its bought-and-paid-for industry lobbyists and Republican Congresscritters have suggested that PPACA would effectively destroy the Medicare Advantage program.

But so far at least, enrollment is up and prices are down in Medicare Advantage, which offers Medicare beneficiaries private health plan alternatives ... mostly managed care .. to the traditional fee-for-service program. The Department of Health and Human Services is hailing the numbers as proof that predictions that the 2010 health law would damage Medicare Advantage were wrong.

But celebrations may be premature, according to Robert Zirkelbach, spokesman for America’s Health Insurance Plans, the for-profit industry's leading lobbying organization. He warns that the biggest impact of the health law on Medicare Advantage won’t hit for another couple of years.

The health law required the federal government to decrease payments to Medicare Advantage plans, but now there are temporary bonuses that mostly counter the effect of some cuts that take effect this year, Zirkelbach says. The biggest cuts won’t come until 2015.

About a quarter of Medicare beneficiaries are enrolled in these private insurance plans, and Medicare had been paying about 14% more for people in these plans than in the traditional fee-for-service program. The new health law, PPACA, aims to equalize what the federal government pays for beneficiaries in both programs.

“When you take $200 billion out of the program, it’s going to have a real impact on seniors,” he said. “These cuts will result in higher out-of-pocket costs and reduced benefits for seniors in Medicare Advantage.” He cited projections from the Congressional Budget Office that enrollment will decline to 13 percent in 2019.

About a quarter of Medicare beneficiaries are enrolled in these private insurance plans, and Medicare had been paying about 14 percent more for people in these plans than in the traditional fee-for-service program. The health law aims to equalize what the federal government pays for beneficiaries in both programs.

“When you take $200 billion out of the program, it’s going to have a real impact on seniors,” he said. “These cuts will result in higher out-of-pocket costs and reduced benefits for seniors in Medicare Advantage.” He cited projections from the Congressional Budget Office that enrollment will decline to 13 percent in 2019.

Jeanne's Thoughts: And this bad, how? Medicare Advantage plans are being paid 14% more than traditional Medicare and this is saving what? According to that ultra-socialist magazine Forbes, Humana, one AHIP-dues-payer and heavy-hitting lobbyist-driven insurer members, earns upwards of 50% of its profits marketing Medicare Advantage plans, spending millions on advertising promotions, television ads and executive bonuses in the process. Medicare Advantage was "sold" as a mechanism to hold Medicare costs down, but by AHIP's Zirkelbach's own admission, it is costing U.S. taxpayers at least $200 billion more ... (and probably a lot more than that) ... than traditional old-fashioned Medicare. So what if, in the near future, affluent seniors in white glove retirement communities won't get their health club memberships paid for by Medicare. This is a program cut that can help preserve the basic Medicare program and assure benefits for ALL Americans.

White House adviser Nancy-Ann DeParle blogged on Wednesday’s report from DHHS that premiums are 7 percent lower this year compared to 2011 and go beyond the 4% decrease projected in September. Republicans in Congress said the health law would virtually end the Medicare Advantage program by increasing premiums and lowering choice and enrollment. “Those predictions turned out to be wrong,” she said

Poor, poor for-profit health insurers, the horror, the horror.

February 1, 2012: The Big GOP Lie: Low Capital Gains Tax Leads to New Investments in Capital

I'll ask the same question I have been asking over and over again for many years now, as we've watched the U.S. national indebtedness grow and grow while the income gap between America's rich and your every day average middle income American has widened and widened:

Will someone please explain to me why income earned from "investing" deserves favorable tax treatment while "income" earned from teaching school, nursing in a hospital, building housing, assembling widgets ... whatever ... has to pay a less favorable tax rate? Income is income, whether earned by the sweat of one's brow, or by studying profit-loss reports and making "smart" investment decisions.

Mitt "Cayman islands" Romney and all his SuperPac billionaire contributors should have paid the 35% high rate on ALL of their income above the $300,000 tax code threshold, regardless of whether it was "earned" from cashing in capital gains or digging a ditch.

January 31. 2012: Where Did the 2012 U.S. Deficit Come From?

January 27, 2012: Justice Department Files Severability Brief Before the Supremes in the Individual Mandate Case

The Obama administration on Friday, in a brief filed with the U.S. Supreme Court, sought to counter arguments that the entire health care law should be struck down if its individual mandate is found unconstitutional. Friday was the deadline for the Justice Department to file a brief with the high court on the issue in the legal fight known as severability -- how much of the law should die if part is found unconstitutional. It is one of four questions the justices will take up in four separate oral arguments scheduled for March 26-28.

In its brief, the DOJ said that arguments by plaintiffs in the suit -- that the entire law (PL 111-148, PL 111-152) should fall if the requirement that all Americans have health insurance is found unconstitutional -- is "not properly presented in this case and is meritless in any event." If the requirement that all Americans should have insurance is found unconstitutional, the only other sections of the law that also should be struck are those dealing with guaranteed issue and community rating, the brief says. Otherwise, "bizarre results" would occur, it says, such as the end of an extension of a pre-existing Medicare payment provision involving air ambulance services, more rigorous enforcement of drug pricing regulations, reauthorization of immunization programs and more.

The guaranteed issue section of the law requires insurers to provide coverage to all comers and prohibits exclusions for pre-existing conditions. Community rating bars plans from charging higher premiums except on the basis of how old the applicant is, where the applicant resides, whether the applicant uses tobacco, and whether the policy covers individuals or families.

The mandate, guaranteed issue and community rating must stay together, DOJ says. "Congress specifically found that in a market with guaranteed issue and community rating, but without a minimum coverage provision, 'many individuals would wait to purchase health insurance until they needed care,' " DOJ says. Congressional intent is a key issue for courts in considering this question of whether or not to break up the various pieces of the law.

"The guaranteed issue and community rating provisions ensure that all individuals have access to health insurance priced according to communitywide rates rather than individual risk factors," says the brief.

If the mandate and the consumer protections were to fall but the rest of the law remained intact, items such as the sweeping Medicaid expansion, the employer mandate and the premium tax credits would remain. The plaintiffs in the case have not shown how those provisions have to be tied to the individual mandate, the brief says.

Even before the Justice Department submitted its brief, the National Federation of Independent Business, one of the parties challenging the law, said in a written statement that it continues to argue that if the mandate is struck, the entire law should be as well, not just the consumer protections.

"What NFIB will argue is simple: The mandate to purchase health insurance is unconstitutional, and the health care law cannot exist if the court strikes down the unconstitutional mandate that holds it together," said Karen Harned, executive director of the NFIB Small Business Legal Center.

"To argue otherwise would be like arguing a house can stand after its foundation has crumbled," she said.

Twenty-six state governors and attorneys general and four individuals are also plaintiffs.

January 26, 2012: For-Profit Medicare Advantage Plans Continue to Rip-Off Medicare and the U.S. Taxpayer

Medicare administrators are using a flawed payment calculation methodology that has led Medicare to overpay private for-profit health insurers under the Medicare Advantage program by $1.2 billion to $3.1 billion in 2010, according to a recent study released by the Government Accountability Office (GAO). GAO analysts urged Medicare officials to change the methodology for the Medicare Advantage (MA) program. And House Democrats, who requested the report, pounced on the news as further evidence that Medicare is paying private plans too much.

Medicare payments to private health plans are already poised to go down in 2014 as part of the 2010 health care overhaul (PL 111-148, PL 111-152). But Democrats said officials at the Center for Medicare and Medicaid Services (CM²) should change its methodology as another way to hold down costs for the program. CM² officials said in a letter to GAO officials that they found the conclusions "informative," but did not say whether they will change the way payments are calculated. Well, isn't that just fine and dandy ... ignore the report and continue to overpay the for-profit health insurers so that they can spend more on lobbying to head off much-needed, long-delayed regulations and reforms to their industry.

The GAO, a non-partisan congressional watchdog group, is concerned that Medicare Advantage plans are getting paid more to treat patients than providers in the traditional fee-for-service program for beneficiaries with the same medical problems.

Medicare pays health plans a set amount for each patient. The payment is adjusted by the health status of the patient. Plans get paid more for sicker patients and less for relatively healthy people. But GAO officials found that health plans are categorizing patients differently than the traditional program is. Because of these diagnostic coding differences ... Medicare fraud by any other name ... "upcoding" ... Medicare Advantage plans got paid more than they would have if the two programs had used the same criteria.

CM² officials had previously found that coding differences exist and, as a result, reduced Medicare Advantage rates in 2010. But the CM² estimates showed a smaller gap than the GAO estimates found. So even after lowering health plans' payments to make up for overpayments in 2010, the agency still paid more than GAO analysts believe it should have.

The GAO report also said that CM² officials are compounding the problem because they have not recalculated the differences every year. Instead, CM² officials lowered Medicare Advantage payments in 2011 and 2012 by the same percentage that they did in 2010, instead of figuring out what the reductions should have been for each of those years. That exacerbates the overpayments, said GAO officials, because the cumulative effect in later years is greater than it originally was in 2010.

Overpayments to plans could contribute to the high costs of the entire Medicare program, which lawmakers are seeking to cut.

"The accuracy of the adjustments can have important consequences for both Medicare spending and MA plans," the report said.

The federal government spent $114 billion in 2010 on Medicare Advantage, which covers about one-fourth of Medicare beneficiaries.

"As we continue to look for opportunities to eliminate waste, fraud and abuse in Medicare, this should be part of the larger solution to lower the cost curve," Sander Levin of Michigan, ranking Democrat on the House Ways and Means Committee, said in a written statement. "Making this fix would improve payment accuracy for Medicare Advantage and make the program more sustainable."

Ways and Means Health Subcommittee ranking Democrat Pete Stark of California, who has repeatedly characterized MA plans as greedy and a bad value for patients, said in a written statement that the plans shouldn't get more money than the traditional program does for the same types of patients.

"With new data showing the health insurance industry was more profitable in 2010 than ever before, it makes no sense for Medicare beneficiaries and American taxpayers to continue to subsidize them," Stark said.

Lobbyists for health insurers said their plans are doing a better job of overseeing patients' medical services by coordinating their care. They also noted that the report does not say that the Medicare Advantage plans are gaming the system but simply that the fee-for-service and Medicare Advantage programs are not identifying patients' conditions in the same way. The plans may be doing a more thorough job than the fee-for-service system of documenting patients' conditions.

"Conclusions about whether the MA payment system appropriately pays plans should not be based on GAO's analysis," said Robert Zirkelbach, press secretary for the trade association America's Health Insurance Plans (AHIP). "There is widespread agreement among policy makers and stakeholders that our health care system needs to move beyond the outdated fee-for-service system to one that rewards quality, value and better health outcomes.

"Unlike the FFS [fee-for-service] part of Medicare, Medicare Advantage plans work to identify and address beneficiaries' specific health care needs through integrated care coordination, disease management, and quality improvement initiatives,'' Zirkelbach added. "Recent research has found that these programs are improving the quality of care for seniors in Medicare Advantage compared to" the traditional program.

Jeanne's Note: One problem with Mr. Zirkelbach's arguments, "adverse selection" or "cherry-picking" ... that is the practice clearly mastered by Medicare Advantage sellers ... market your plans heavily to fairly affluent, upscale seniors. Make the plans virtually invisible to poorer people. Why? Poor people are often poor because they are sick. Having chronically sick people in a Medicare Advantage plan could lead that plan to having to pay out more in services thus reducing its profit margins. Leave the sick people to the traditional Medicare program. I live in a moderately upscale age 55+ community outside of Phoenix, Arizona, We have three golf courses, two large community pools, a recreational center, tennis courts, a health club and related facilities. Seniors here take belly-dancing lessons, line-dancing and yoga ... they are continuously active ... and for their age groups statistically far healthier than their inner city neighbors. During the recent "open enrollment" period for Medicare Advantage plans, my mail box was flooded with expensive mailers, many including DVDs describing the "advantages" of the Medicare Advantage plan being marketed.. Trust me on this (I am a lawyer after all) ... they don't send DVDs to the inner city addresses. The old saw, that most Medicare Advantage plans have their enrollment offices on the second floors of walk-up buildings, and thus keep out those too weak to manage the stairway, may be more euphemism than truth, but the implications are evident. Stick old-fashioned traditional Medicare with the sick, insure the healthy and laugh all the way to the bank.

And do Mr. Zirkenbach's arguments about the extra value and quality benefits ring true: A study in 2009 by Austin Frakt, a health economist at Boston University, provides the dismal numbers:

"My work (with Steve Pizer and Roger Feldman) shows that for each additional dollar spent by the federal government (taxpayers) on the program since 2003, just $0.14 of it can be attributed to additional value (consumer surplus) to beneficiaries.... What do we make of the other $0.86? That goes to the insurance companies but doesn’t come out “the other end” in the form of value to beneficiaries. In part it pays for the additional benefits themselves and in part it is captured as additional insurer profit."

GAO report (pdf)

January 24, 2012: How Did the U.S. Tax Code Get Turned into a Playground for the 1 Percent?

Why Does Mitt Romney Want to Keep His Tax Returns From the Bain Years Under Wraps?

By Dave Johnson, AlterNet
Posted on January 24, 2012, Printed on January 26, 2012
http://www.alternet.org/story/153881/why_does_mitt_romney_want_to_keep_his_tax_returns_from_the_bain_years_under_wraps

Before Republican presidential candidate Mitt Romney was, as he describes it, "unemployed," he used to get up in the morning and go to work, like the rest of us. Did he pay taxes, like the rest of us have to? He doesn't seem to want us to know.

If you are lucky enough to still have a job, you get dressed, go to work, sit in a noisy cubicle, pound a nail, teach a class, take care of someone, or any of the other things we do most days. You get your paycheck, you pay your taxes. Let's say you do pretty well, making ...wow ... more than $379,150 (after all deductions). According to the IRS your federal income tax should be 35 percent on every dollar that is above that amount. But maybe not, if you are as wealthy as Mitt Romney.

Mitt Romney has released his most recent tax returns. They tell us some eye-popping things about Romney and about the wealthy 1 percent and the low taxes they pay on the gains from invested wealth. But they only raise questions about Romney's controversial years "working" at Bain Capital. What would we learn from seeing his tax returns from the Bain Capital years, and what would that tell us about the transformation of our economy into a playground for the 1 percent and a sweatshop for the rest of us?

What We Did Learn From Romney's Tax Forms?

Romney has released an "in-progress" estimate of his 2011 taxes, and the tax returns for 2010. It is not yet known why he did not release tax returns from earlier years before he was running for president, but it could be that returns from earlier, pre-candidate years might provide details he would not want the public to see. Since even these returns show he has foreign holdings, including a Swiss bank account, the failure to release earlier returns is likely to raise concerns.

Romney's 2011 estimate is 104 pages. The 2010 tax returns consist of Mitt & Ann Romney Return, 203 pages; Mitt Romney Blind Trust, 37 pages; Ann Romney Trust, 83 pages; Romney Family Trust, 81 pages; and Tyler Charitable Foundation, 39 pages.

These documents tell us that the Romneys received more than $42 million in income for the two years of self-described "unemployment." In 2010 $7.4 million of Romney's income was "carried interest" from Bain Capital. Most of the rest was also capital gains income. ("Not very much" -- about $374,000 -- was from speaking fees. This was seven times the country's median household income of all wage-earners in a household the same year.)

In 2010 with income of $21.6 million, he gave $3 million to charity (including $1.5 million to the Mormon Church) and paid about $3 million in taxes. And, finally, the Romneys paid an effective tax rate of 13.9 percent in 2010 and estimate they will pay a 15.4 percent effective tax rate in 2011. This compares to the top federal income tax rate of 35 percent the rest of us are supposed to pay.

From these tax returns we have learned a few things about Romney, but also about the divide between the vastly wealthy -- "the 1 percent" -- and the rest of us -- "the 99 percent." We learned why he thinks making $374,000 from "speaking fees" is, as he put it, "not very much." We learned why he can casually say to Rick Perry, "I'll bet you $10,000." We learned that he has investments in Bermuda and the Cayman Islands and a Swiss bank account. And, of course, we learned the big one: The tax rate on his enormous income is only 14 percent, which is almost certainly "less than his secretary."

But we did not learn what tax rate Romney paid when he "worked" at Bain Capital.

What About When Romney Was "Working"?

We go to work, and we pay our taxes. Mitt Romney went to work at the private-equity firm Bain Capital from 1984 until 1999. We have heard the stories of Romney's company Bain Capital, and how it "earned" its millions. According to the Christian Science Monitor, this is the story of what happened when a Bain-owned company "came to town":

The new owner, American Pad & Paper, owned in turn by Bain Capital, told all 258 union workers they were fired, in a cost-cutting move. Security guards hustled them out of the building. They would be able to reapply for their jobs, at lesser wages and benefits, but not all would be rehired.

This is how "job-creators" like Romney make their money. But Republicans claim that their tax rates are much too high. So why won't Romney release tax records that show what tax rate Romney paid when he was "working" and raking in millions upon millions at Bain Capital by buying companies, laying people off, cutting wages and benefits, getting rid of unions, selling off pieces and closing down others?

Clues to the Mystery

Since we don't have access to Mitt's past tax returns, we don't know how much Mitt claimed as salary and paid in taxes on that salary when he showed up at the office and "worked" at Bain Capital. But we can gather clues from the taxes we do know were paid by those in similar positions. Recently the infamous private-equity firm, the Carlyle Group, decided to "go public" (sell stock to the public) and had to disclose the income made by its partners. Forbes magazine looked through the disclosure documents, and tells us:

"Carlyle's disclosure opens a small window into how this works. In 2011, its three founders were each paid about $140 million. But they received just $275,000 in salary and another $3.5 million in the form of a bonus (also taxable at ordinary income rates). But each also got $134 million -- or 96 percent of their compensation -- from investment profits."

This is the key. While "working" at the Carlyle Group the key players took very low "salaries" but received very high compensation -- 96 percent -- as "investment profits." Since "investment profits" are taxed at a much, much lower rate than salary, this means they paid very low taxes while they "worked" there.

Romney's Bain Capital was a private equity firm very much like the Carlyle Group, and this disclosure tells us that Mitt's earlier returns would almost certainly show that he also took a modest salary and tens of millions in "carried interest."

By deferring much of their compensation into "investment profits," Carlyle's partners paid only a 15 percent tax rate on this income. This is because of a tax loophole known as "carried interest." This loophole lets the managers of a fund like Carlyle -- and Bain Capital -- arrange compensation to look like a share of profits, which are taxed as long-term capital gains, instead of as standard compensation for services, which would be taxed as normal income from work. Long-term capital gains have a maximum tax rate of 15 percent.

So the question for Romney is, what tax rate did he pay when he worked at Bain Capital? Did he pay income taxes like the rest of us who work for a living? Or did he take advantage of this special loophole that is only for the wealthy 1 percenters when they engage in "job creation" activities like Bain Capital did.

Today Romney claims that much of this income is from "investments" (much as continued income from Bain Capital) and not from working. This means that he is receiving money from "capital gains," which are taxed at a very low maximum rate of 15 percent. A lot of this is gains from Bain Capital, indicating that he may have used the carried interest loophole to keep from paying the taxes the rest of us have to pay.

Why Special Low Taxes For Investments?

Corporate/conservatives say that we need a special low tax rate for gains from investing capital to provide an incentive to invest. They say this incentive to invest is necessary because the usual reason to invest, making a bundle of cash, is considered insufficient motivation. But many economists say that this addition of a special "incentive" on top of making a bundle of cash creates what they call "market distortions" which cause investors to pursue various tax-reduction schemes instead of investing based on the value and merits of a given investment.

People don't understand taxes and brackets. For example, American Public Media's Marketplace carried a segment Tuesday titled, "Americans' feelings on the tax code," in which they talked about "little old ladies" who make $40,000 off of investments who would have to pay more taxes if the capital gains tax rate was changed. The thing is, such a person would almost certainly have deductions, and the tax rate on taxable income of $34,500 is ... still 15 percent. This is not a tax break that "little old ladies" need.

The necessary precondition for investing capital is having capital. So a tax break on the return from investing capital is by definition a break for the well-off. It means the kind of income that you get from already having a lot of money is taxed at a much lower rate than the income from having a job. Instead of rewarding work, this tax structure rewards wealth.

In other words, Romney and other 1 percenters get a lot of their income from already having a lot of money. You and I can't do that. This chart shows who in our economy owns the kinds of investments that generate this kind of income:

As you can see from the chart, the top 1 percent own 50 percent of the capital-gains-generating investments, and the top 10 percent own 90.3 percent. The bottom 50 percent of us own 0.5 percent of the kinds of investments that generate these kind of low-tax gains. Here is the simple reality: capital gains are taxed at a lower rate because most of the income of the 1 percent is from capital gains, and most of the income of the 1 percent is from capital gains because the tax rate is lower.

You and I do not have the wealth needed to buy into the special tax loopholes that allow people like Mitt Romney to pay only about 15 percent on income in the tens of millions. Mitt Romney and Newt Gingrich and the rest of the Republicans should stop claiming that taxes are too high, and start paying them so we can repair our aging infrastructure, have good schools that pay teachers well, good courts that serve all of us, sufficient police and fire protection for us to feel secure and safe, and start paying off that Reagan/Bush tax-cut debt.

Republicans claim that taxes on wealthy "job creators" like Romney are too high. According to the New York Times, Romney's own tax proposals would cut his federal income taxes by 40 percent, and Newt Gingrich's proposal to eliminate capital gains taxes entirely would mean Romney pays almost no federal taxes. Yet so many of the wealthy 1 percenters have access to tax loopholes like special capital gains tax rates in investments and the special carried interest deduction used by Romney and others. Are the taxes on these self-proclaimed "job creators" really all that high?

If Mitt would release his tax returns from the Bain Capital years, we might have some answers.

January 23, 2012: Why Do Americans Pay So Much for Their Prescription Drugs?

January 22, 2012: Were the early 1960s a Golden Age for American Medical Care? ... NOT!

Something I hear almost every time I am out on the speaker's circuit: someone in the audience will hearken back to the "good old days" before Medicare and Medicaid and tell me that the government has just screwed things up and cannot run a health care program... only the private sector can do that. TeaParty-favorite and GOP presidential candidate Dr. Ron Paul echoed these sentiments during the South Carolina GOP debate this past week. Fortunately www.factcheck.org took it upon themselves to review the record:

Were the early 1960s a golden age for American medical care? To hear Ron Paul tell it, they were.

"I had the privilege of practicing medicine in the early '60s before we had any government" involvement in health care, Paul said during the Jan. 19, 2012, Republican presidential debate in Charleston, S.C. "It worked rather well, and there was nobody out in the street suffering with no medical care. But Medicare and Medicaid came in and it just expanded."

As soon as we heard this, we wondered whether his portrayal was accurate. We considered putting his comment to the Truth-O-Meter, but we decided that it was impossible to do so. We couldn’t prove a negative -- that "there was nobody out in the street suffering with no medical care" during that era.

But we amassed research on the way to making that conclusion, most of it new to us. So we thought we’d share what we found about health care in the early 1960s.

We’ll start with one quibble with part of Paul’s statement -- that the early 1960s was a period "before we had any government" involvement in health care. That’s certainly true of two big programs passed into law in 1965 -- Medicare, primarily for senior citizens, and Medicaid, for the poor.

However, there were limited federal programs prior to 1965, notably the Kerr-Mills legislation (P.L. 86-778), which provided federal funding to states to cover medical costs for the indigent elderly. Kerr-Mills initially had been envisioned as serving 10 million people, but by 1965 -- when it was effectively supplanted by Medicare and Medicaid -- it only covered 264,687 Americans. So its impact was not that great.

As for the broader picture of pre-1965 health care in America, Rosemary Stevens, a historian and sociologist at the University of Pennsylvania, wrote that "in the early 1960s, the choices for uninsured elderly patients needing hospital service were to spend their savings, rely on funding from their children, seek welfare (and the social stigma this carried), hope for charity from the hospitals or avoid care altogether."

To double-check this assertion, we turned to a study by the Social Security Administration known as the Survey of the Aged.

The survey was taken in 1963, and its findings were published in 1964 -- the "early '60s" Paul is talking about. One downside of the data is that it only looks at Americans 65 and older. So it doesn't give a full picture of how the health care system functioned in the early 1960s. However, as we’ll discuss later, senior citizens are a key to analyzing the state of American health care, since their health needs were, and remain, more acute than the overall population's.

Overall, the study found that "the complex task of paying for necessary health services and providing adequate insurance for non-budgetable expenses remains beyond the economic capabilities of most aged persons."

In all, slightly more than half of Americans 65 and older had health insurance at the end of 1962. That works out to 64 percent of couples, 49 percent of un-married women and 37 percent of un-married men.

"And what they had was terrible insurance -- it didn’t do much to cover them," said
Dorothy Pechman Rice, a retired professor at the University of California at San Francisco who served as director of the National Center for Health Statistics from 1976 to 1982.

The study found that nine out of 10 couples, and eight out of 10 elderly individuals, "assumed responsibility for their own costs without help from government sources or private voluntary agencies." Some paid from their own savings or with the help of insurance, and some could pay "only because doctors or hospitals adjusted their rates in light of the patient’s limited resources."

Depending on the marital category, between 18 and 26 percent of seniors without health insurance relied on public assistance to pay some of the costs they incurred. The report concluded that such rates were "evidence of the fact that many of the aged simply cannot afford a hospital stay."

Indeed, the biggest distinction the surveyors found was between elderly patients who needed to be hospitalized and those who didn’t. For instance, in a year without hospitalization, married couples incurred median medical costs of $173, or $1,289 in today’s dollars. In contrast, a year with at least one hospitalization meant incurring median costs of $938, or just short of $7,000 in today’s money.

In other words, in the pre-1965 era, if you had to go to the hospital, the hospital may not have turned you down -- but if you were in the sizable percentage of Americans who had to pay all or much of the costs out of pocket, you’d be paying for your misfortune for years to come.

The report concluded that "the cost of medical care is high for the aged, principally for those requiring hospital care. Many aged persons never recover from the economic effects of a single hospital episode. Unfortunately, the heaviest burden is likely to fall on those with the least resources. Those with insurance are better able to absorb the blow than those without such protection, but even for the insured, there is no present guarantee against dependency in old age caused by catastrophic medical expenses."

None of this data demonstrates that there was "nobody out in the street suffering with no medical care" in the early 1960s. That’s why we’re unable to rate the accuracy of Paul’s statement on the Truth-O-Meter. As Paul has often noted, charitable care was an accepted part of the health care system during that period. "There were physicians who simply would not refuse care anyone who appeared in their offices and did God’s work," said Henry Aaron a health care specialist at the Brookings Institution, a Washington think tank.

But even if the 1950s and early 1960s were a golden age for medical care as Paul suggests -- a notion Aaron derides as "delusional’ -- experts we talked to suggested that the era’s model isn’t of much use for policy discussions going forward.

In the early 1960s, Aaron said, "health care was much less costly than it is today; and there was much less that doctors or hospitals could do for patients. It didn’t cost much for a hospital to let a heart attack victim lie in a bed or for a physician to stop by and prescribe nitroglycerin for someone with angina. It is rather different when pain in the chest calls for angiography and possibly for angioplasty and costly maintenance drugs. It is the rare physician today who can afford to give a full work-up to a person who presents with persistent chest pains, which calls for thousands of dollars worth of tests."

January 18, 2012: Closing the "Health Disparity Gap" ... PPACA is Helping

The health care overhaul can play a key role in addressing health disparities among racial and ethnic groups, advocates told supporters of the law this past week. While infant mortality, obesity and diabetes rates still show significant inequities among different communities, speakers at Families USA's 17th annual conference said implementation of the law is an opportunity to help close those gaps.

"Health care reform won't end health disparities, but the law does provide us a foundation to build on and to move the conversation forward," said Janet Murguia, president and CEO of the National Council of La Raza, a Hispanic civil rights organization.

Murguia said the coverage options created under PPACA (PL 111-148, PL 111-152) are "vital" to tackling disparities, particularly in the Latino community. She praised the expansion in Medicaid for low-income families and the private insurance marketplace set up by the law, but urged supporters not to treat health equity as a side issue as implementation progresses.

"Health care reform implementation without intentional and deliberate action on disparities only serves to widen the gaps in health," she said. "On the up side, addressing the needs of these communities could potentially strengthen support for reform, and broad reforms, as it faces challenges in the future."

David Satcher, who served as surgeon general under President Bill Clinton, and L. Toni Lewis, chairwoman of SEIU's health care division, also emphasized the importance of education in counteracting attacks on the health care law. Satcher said how little people know about the overhaul is "amazing" and cautioned that misinformation could have a real impact.

"People distort what it is, what it says," said Satcher, who currently serves as director of the Satcher Health Leadership Institute at Morehouse School of Medicine. "If we're not careful ... that distortion is going to end up with us right back where we were, trying to figure out how people are going to get health care." [Jeanne's Quote of the Month: One of the biggest faults I lay at the feet of the Obama administration is it's failure to respond to the massive campaign of misrepresentations, distortions and outright lies that have been spread about PPACA. The media has also failed in its responsibilities to set the record straight, reporting the innuendo and fabrications without clarification or correction.]]

While advancements in the health care system are critical, Satcher also highlighted the link between health outcomes and social conditions, particularly poverty.

"The fact of the matter is that there are a lot of people who live in conditions that make it very difficult for them to get out in the morning and be physically active. It's not safe. And there are others who live in communities where there are no grocery stores and fresh fruits and vegetables that are affordable, or none at all," he said. "We have to deal with the social conditions that also surround these problems."

November 23, 2011: Commonwealth Fund Compares U.S. to 13 Other National Health Systems

The Commonwealth Fund has published a report:

International Profiles of Health Care Systems: Australia, Canada, Denmark, England, France, Germany, Italy, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United States

...that is very enlightening. Four Charts in particular need to be emphasized. TeaParty/Republicans are signaling that they intend to make "American Exceptionalism" their campaign theme for 2012. America is a great nation... perhaps in many respects the greatest nation in history. What other nation across the millennia broke with the Old Testament Biblical proclamation to destroy your enemies, killing the men, selling the women and children into slavery and sowing your enemies land with salt so they might never again rise up against you ... and re-built it's enemies from WWII, making them today its strongest economic competitors, but also its strongest allies, Germany and Japan ... but America is not exceptional in many areas, not the least of which is health care. Look at these charts and see where we are falling behind.

November 21, 2011: SUPERCOMMITTEE Collapse and What it May Mean for Health Care USA

The failure of the congressional super committee could mean automatic budget cuts totaling billions of dollars for everything from Medicare to biomedical research, starting in 2013. But some health care interests stand to fare better than others.

Two major health entitlement programs, Medicare and Medicaid, have protections under the law that set up the super committee. Automatic cuts would not affect Medicaid, the joint federal-state health program for the poor, and Medicare spending would be cut by 2 percent – all from payments to hospitals and other care providers.

But unless Congress steps in to rework the legislation mandating the automatic cuts, a series of across-the-board reductions would kick in 2013. The House and Senate appropriations committees will have to decide how to spread the cuts among various programs. And some of the larger, better-financed lobbies may have the upper hand.

It is not yet clear how the process would work, but health care spending is considered in the same annual appropriations legislation as labor and education spending. There are questions about how much authority the committees will have to limit cuts in some areas while increasing the hit to others.

Congress laid out this scenario for cost cutting – dubbed "sequestration" in legislative lingo – when it created the super committee in August as part of a deal to raise the debt ceiling and avoid the first U.S. default in history. Half of the cuts are supposed to come from defense, and the other half from domestic spending.

While the cuts to Medicare are limited to hospitals and other medical providers and would not exceed 2 percent, they argue that is too much and that they sacrificed plenty in the 2010 health care law.

Rich Umbdenstock, president and CEO of the American Hospital Association, said across-the-board cuts would hurt Medicare beneficiaries and their families and “also have an impact on the ability of hospitals to provide essential public services to the communities they serve given the impact that Medicare has on the entire health care system.”

But the hit to other health programs – those that depend on “discretionary” annual appropriations -- would be more severe. At stake is federal money that, among other things, helps HIV patients pay for lifesaving medication, funds biomedical research and helps prevent and respond to food-borne illnesses and disease outbreaks.

Automatic reductions, for example, could translate into less staff to pinpoint and combat food contamination, said Georges Benjamin, executive director of the American Public Health Association.

If the full $1.2 trillion in automatic cuts go into effect, funding for non-defense discretionary programs in 2013 would face reductions of 7.8 percent, dropping each year to 5.5 percent in 2021, according to Congressional Budget Office estimates.

Research groups Monday urged Congress to reverse the planned cuts for 2013. “The mindless, irresponsible across-the-board cuts of the sequester would drain the lifeblood from our efforts to improve the health of our nation and could cause the loss of our 65-year leadership in science, technology and innovation,” Research!America chair, former Rep. John Porter, R-Ill., said in a statement.

The American Medical Association, which had urged panel members to enact a permanent change to the way Medicare pays physicians, said Congress must act before the end of the year to stop a scheduled 27 percent payment cut in January.

“The AMA is deeply concerned that continued instability in the Medicare program, including the looming 27 percent cut scheduled for January 1, will force many physicians to limit the number of Medicare and TRICARE patients they can care for in their practices,” AMA president Peter W. Carmel said in a statement. “Congress has ignored the reality that short-term patches have grown the problem immensely. The cost of repealing the formula has grown 525 percent in the past five years and will double again in the next five years.”

Health advocates fear deep cuts will harm the public by reducing services and investment in several areas, including:

Public health. The Centers for Disease Control and Prevention is particularly vulnerable because it was hit hard in the last round of budget cuts. In fiscal year 2011, federal funding for the CDC declined by $740 million.

The agency plays an important role in detecting and responding to emergencies such as tornadoes, hurricanes, food-borne illnesses and infectious disease outbreaks. It also helps fund state and local public health departments and labs, which Benjamin said is extremely important as states struggle with massive budget deficits. Since 2007, he said, 44,000 jobs in local and state health departments have disappeared.

The CDC also subsidizes the cost of vaccines for uninsured and underinsured children. The prices of standard childhood vaccines are rising.

Medical research. U.S. investment in biomedical research is beginning to lag behind some other nations, namely China and India, at a time when robust funding could help with job creation, NIH Director Francis Collins said at a May hearing of the Senate Appropriations subcommittee on Labor, Health and Human Services and Education.

Collins said at the hearing that the BGI genome center in Shenzhen, China, "is capable of sequencing more than 10,000 human genomes a year. The capacity of that one Chinese institution now surpasses the combined capacity of all genome sequencing centers in the United States."

Congress in recent years has given NIH small increases that haven’t kept pace with medical inflation, advocates claim. Funding actually declined in 2006. Lawmakers are still negotiating funding levels for fiscal year 2012, which began October 1. Reductions in NIH funding "will lessen the chance of research breakthroughs in cancer. It will interrupt clinical trials at the National Cancer Institute," Dick Woodruff, vice president of federal relations and strategic alliances at the American Cancer Society’s Cancer Action Network, said earlier.

HIV/AIDS. About 500,000 HIV-infected people currently get help with expensive care and lifesaving medication through the Ryan White HIV/AIDS Program. Ronald Johnson, vice president of policy and advocacy at AIDS United, says that automatic cuts would be devastating.

Ryan White help is a last resort for many people who are low-income, uninsured or underinsured. On average, a year's worth of medication costs about $15,000 to $20,000, and total care for an infected person can run about $100,000, according to Johnson.

He also fears cuts to federal funding that help states provide free or subsidized HIV testing. The Centers for Disease Control and Prevention sent $800 million to states in fiscal year 2011.

Disease prevention. Prevention funding in the health law is already under fire, by both Democrats and Republicans. Republicans have pushed to repeal the funding and President Barack Obama said recently that he would support decreasing it by $3.5 billion over 10 years.

The prevention fund has provided money for programs aimed at reducing obesity and tobacco use, among other public health priorities.

But reductions are short-sighted, said Jeffrey Levi, executive director of Trust for America's Health, since prevention can reduce future health costs.

Many Republicans and some Democrats are already talking about new legislation to block or alter the automatic 2013 cuts to defense programs. But even if Congress acts, Jennings doubts that health care would benefit. If anything, he said, health programs could wind up facing deeper cuts.

November 7, 2011: Did Jeanne Schulte Scott (now: "Matthews") Coin the Term "Obamacare?"

September 29, 2011: One Chart Explains it All, Starting with St. Ronnie of Reagan, the Downfall of the American Dream

September 4, 2011: Exxon and Bank of America Tax Bill

September 2, 2011: Government is the Problem, Too Many Regulations

August 31, 2011: Too True to be Funny <sigh>

August 30, 2011: PPACA Reignites Health Care Fraud and Abuse Activity

After grinding to a near halt during the George W. Bush years, the Patient Protection and Affordable Care Act has jump-started federal anti-fraud and abuse activity once again. The Bush focus on deregulation (mainly for because "regulations (of any kind) were stifling business", had resulted in cuts to the funding and attention paid by the Justice Department and DHHS Inspector General's Office and a dramatic increase in health care fraud and abuse. Television muckrakers had begun to take notice and Florida once again was so much the hotbed of Medicare fraud that both CBS' "60 Minutes" and ABC's "Nightline" did features on the renewed problem in 2009 and 2010. But then came PPACA, and new funding and new attention to the issue.

The industry has taken note. No more free ride as they bought under Bush. Health care fraud will be and is being prosecuted to the fullest extent. Statistics, released by the non-partisan Transactional Records Access Clearinghouse, show 903 prosecutions so far this year. That's a 24% increase over the total for all of fiscal year 2010, when 731 people were prosecuted for health fraud through federal agencies across the country. Prosecutions have gone up 71% from five years ago, according to TRAC.

In 2010, after years of decline from the highs of the 1990's, the government recovered a record $4 billion from health fraud cases after PPACA created one agency and expanded another. The actuary for Medicare predicted provisions of the law would ultimately net $4.9 billion in fraud and abuse savings over the next 10 years, which will be rolled back into Medicare.

August 30, 2011: TeaParty/Republicans Argue AGAINST "Skin-in-the-Game" Changes to Medicare Medigap Program

From the Kaiser Family Foundation:

A provision of the 2010 federal health law seeking to increase Medicare beneficiaries’ share of health care costs is meeting resistance from an unlikely group of 33 state insurance regulators, health insurers and consumer advocates charged with revising Medigap insurance policies that cover most out-of-pocket expenses.

[Note from Jeanne: Most of these "insurance commissioners" are newly installed or newly "converted" TeaParty/Republicans from red states who are simply looking for additional ways to throw roadblocks in the way of implementing the Patient Protection and Affordable Care Act, "PPACA" (or "Obamacare for the troglodytes out there). These are the same TeaParty/GOPers who are arguing out of the other side of their mouths that the 46% of American families who pay no federal income tax should have some "skin-in-the-game." But then consistency has never been one of the right wing's best attributes.

The National Association of Insurance Commissioners assembled the group to come up with ways to raise the beneficiaries’ cost for the most popular and generous Medigap policies, a task Congress assigned to the association in the health law. Since then, the idea of shifting some costs to beneficiaries in Medigap policies has emerged as one of several proposals to reduce the federal deficit.

The proposals suggest that if Medigap policies cover less of beneficiaries’ costs, some seniors will be less likely to overuse Medicare-covered health care services. The Congressional Budget Office estimated in March that such changes could save the government $53 billion in Medicare spending over a decade by strengthening incentives "for more prudent use of medical services."

In a conference call later this morning 9August 30, 2011), the group will discuss their congressional assignment as well as the broader proposals limiting Medigap policies, which help more than 7 million Medicare beneficiaries – about one sixth of those in traditional Medicare – pay for their out-of-pocket costs. Those costs include monthly premiums, 20 percent of allowed charges for out-patient services such as doctor’s visits and other costs Medicare doesn’t cover. The most comprehensive — and expensive — plans pick up nearly all the costs.

Many of the Medigap group's members have raised questions about their task, including the effects it could have on seniors’ health and whether changing the plans is legal. Such consensus is something the group's chairman, Guenther Ruch, an administrator at Wisconsin’s insurance department, doesn’t see very often.

"This is a unique situation where such diverse interests have the same concerns about the potential changes to the Medigap insurance market," he said.

"Some of those proposals are fairly dramatic in the cost shifting effect onto seniors," said Mary Beth Senkewicz, Florida's deputy insurance commissioner, who chairs the NAIC's senior issues committee, which includes the Medigap group. "This has been a product that has worked very well for a number of years, helping to maintain seniors' peace of mind, knowing that they have coverage for the gaps in Medicare."

Note from Jeanne: Yes, an appointee of Florida's Medicare-fraud-committing Governor Rick Scott is telling us taht the product has been working well. We might ask how much Rick Scott made from the Medigap portion of his Medicare fraud?Bonnie Burns, a policy specialist at California Health Advocates and another member of the Medigap group, questioned whether patients need incentives to reduce their use of medical services.

"Beneficiaries don't order services, providers do," she said. "To suggest that Medicare beneficiaries overutilize services on a whim because they don't have 'skin in the game,' is pretty disturbing."

Note from Jeanne: O.K., I admit some left-leaning types also oppose the "skin-in-the-game" argument ... but at least they are being consistent, they oppose the idea across the board and not selectively as do the TeaParty fanatics.

Although some studies have found that seniors with Medigap policies use more Medicare services, Burns said they may be sicker than the average Medicare beneficiary, which is why they bought Medigap coverage.

Note from Jeanne: BULL-HOCKEY! Wealthier seniors are the ones who can afford and who buy the most comprehensive Medigap coverage. For them it is but a blip in the budget. Given the prices for-profit Medigap policy insurers charge, seniors who are "sicker than average" are most likely those left out of the equation.

Senkewicz said members of the group have also questioned the legality of making changes that apply to policies seniors have already purchased. The policies are contracts between the insurer and the beneficiary which contain certain promises of coverage. When state regulators require changes in insurance, those typically apply only to future policies, she said.

Note from Jeanne: And this creates a legal issue how?

Several members have suggested that Medigap policies aren't responsible for Medicare's growing costs.

"These carriers only pay for what Medicare has already determined to be medically necessary," said Senkewicz. "Those determinations are not made by the insurance company."

Note from Jeanne: It's determined to be "medically necessary" based upon the reports and claims filed by the physicians providing o0r ordering the services. This is the whole point of the :skin-in-the-game" argument, when the patient and the provider know of dollar-one coverage, all restraints are off. Senkewicz continues as a shill for her Medicare fraud-committing boss.

William Schiffbauer, a member of the group and an independent health care attorney who has represented insurers, said the health law requires the group to suggest raising beneficiary cost-sharing in Medigap plans in order to encourage more appropriate use of physicians services, based on evidence published in medical journals. Schiffbauer said that the medical literature reviewed so far does not identify which services are inappropriate and should be discouraged by making them more expensive for patients.

The group is being asked to decide what's medically necessary -- an impossible task, he said.

Note from Jeanne: O.K., blame it on the lawyers ... but remember he represents the for-profit insurance industry. And on top of that, Schiffbauer is flat out wrong when he suggests that we have no evidence as to medical effectiveness and necessity. The Agency for Health Research and Quality (the little federal agency that could, which was originally charged by the George W. Bush administration in 2003 to develop a comprehensive "comparative effectiveness" capability has made substantial progress in dong just that ... Of course, now, because Bush's plan was adopted by Obama in PPACA, it's become the devil incarnate and the worst form of health care rationing. But then consistency and right-wingers ... well you know.

***

Reducing Medicare spending for the wrong reason – by making it inaccessible -- also worries members of the Medigap group, including Ruch. "There may be seniors who would forego medically necessary care because they can't afford it -- even though they have a Medigap policy," he said.

Note from Jeanne: Ruch is only partially right ... yes seniors may forego some treatments but without some "skin-in-the-game" dollar one supplemental coverages simply allow uncontrolled growth in Medicare health care coverage. TeaParty/Republicans propose to replace Medicare with "Vouchercare" and the out of pocket expenses born by the poorest and the sickest will go through the roof. What we need is an effective use of AHRQ's "comparative effectiveness" guidelines, expanding them and improving them as we go along.

Note from Jeanne: Finally, I added the above vignette cartoon. Medigap sales efforts have long been criticized because of the high-pressure, senior-terrorizing tactics employed by the many for-profit underwriters. These for-profit insurers have bought and sold state insurance regulations and commissioners over the years and they don't want to change that practice now.

August 29, 2011: The TeaParty Re-Writes the Founding Father History

August 28, 2011: TeaParty/Republican Plans for America

August 27, 2011: Are U.S. Corporations Over-Taxed?

The following is excerpted from an article publish in This Week, a web news service. I have added some highlights and interspersed my own thoughts in my "Just Between You and Me" sidebars.

How much tax do corporations pay?
In theory, their top tax rate is 35% ... one of the highest in the industrialized world. In reality, most U.S. companies pay far less by exploiting tax breaks and loopholes. Of the 500 major companies in the S&P 500 stock index, 115 paid a tax rate of less than 20% over the past five years. Nearly 40 paid less than 10 percent. Boeing, for example, paid 4.5% in taxes on its profits over the past five years, Southwest Airlines paid 6.3 percent, and Yahoo paid 7 percent. General Electric, one of America's largest corporations, reportedly will pay little or no federal tax on its $14.2 billion in global profits for 2010.

Just Between You and Me: GE, one of the brightest lightbulbs in the pantheon of "American" corporations, pays almost no U.S. income taxes. GE, whose CEO serves on Obama's "Jobs Council," and who recently transferred the headquarters of its 115-year old "medical imaging" business component from Waukesha, Wisconsin to Beijing, China, pays almost no U.S. income taxes. GE, founded in 1890 by Thomas A. Edison, but which has shed more than 36,000 U.S. manufacturing jobs over the past 10 years, while adding 25,000 overseas, pays almost no U.S. income taxes. Need I say more?

GE is not fleeing the United States because its tax bill is too high. GE is just the leading example of the new industrial paradigm: the "international" corporation, which owes allegiance to no country, which is willing to traitorously deal with anyone, any dictator, any political system, as long as it can make a buck more for its investors (and reap bonus incentives for its executives). For this TeaParty/Republicans, all while protesting their "patriotism" and suggesting that Obama is a socialist, have sold the nation down the river. For this, we are told we must cut the share of corporate taxes (and the taxes of their owners and so-called "investors," who are supposedly the "job-creators") in order to insure jobs. Problem? The only jobs these creators are creating are in China and other third world nations. They are the cause the solution for U.S. economic woes.

Has it always been this way?
No. As a result of the loopholes and deductions added to the byzantine tax code in recent decades, corporations pay a far smaller share of total U.S. taxes than they once did. In the 1950s, Washington collected 30% of all its federal revenue from business taxes. Last year, it was just 9 percent. Individual taxpayers contribute far more revenue: $899 billion last year, compared with corporations' $191 billion. "It's unpatriotic, it's unfair, and we can't afford it," said Samuel Kang of the Greenlining Institute, which recently released a report on corporate tax avoidance. "Congress is looking to cut the deficit by slashing Medicare, Social Security, food safety, education, and health without collecting another dime from these wealthy companies."

Just Between You and Me: TeaParty/Republicans extol the golden era ... the Eisenhower era ... the 1950's. Life was beautiful then. Mom packed the kids lunches as they went off to school; Dad held a job that allowed the family to have a shiny new car every 3-4 years, a nice house in the many fast-growing "Levittowns" that were popping up in the burgeoning cities all across America. People dressed for Church on Sunday. Neighbors would gather for a barbecue on Saturday evenings, and while the women chatted the men would gather with a beer around the fire and tell war stories while the kids sat around their feet, mesmerized the tales. Life was beautiful ... if you were white.

But there is one thing TeaParty/Republicans refuse to remember about the 1950's: taxes were high, especially on the very rich whose marginal tax rates on incomes above the almost fantastic $100,000 a year, was 95 percent. Of course, there weren't very many "super-rich" $100K a year men around in those days. Oh, a few Hollywood types and heirs of old fortunes, but the average corporate executive was earning only about 8 times the pay of the average corporate worker. The wealth gap between the rich and the moderate middle income had narrowed to one of the lowest levels in American history. No, the TeaParty/Republicans don't talk about that.

How do businesses avoid paying the full tax?
Through a mix of deductions, accounting gimmicks, and tax shelters created by lobbyists and lawyers. One increasingly popular strategy is to shift jobs, operations, and profits to overseas subsidiaries in low-tax countries. It is estimated that U.S. companies have parked more than $1.5 trillion offshore in this way. Companies say they would be willing to bring these profits home and invest them in creating jobs if Washington would agree to a "repatriation holiday," a temporary period when the tax paid on the incoming money would drop from 35 percent to about 5 percent. But skeptics point out that during the last repatriation holiday, in 2004, 92% of the more than $300 billion that U.S. companies brought home went to stock buybacks and shareholder dividend payments, not to creating more jobs.

Just Between You and Me: Today, the fat-cat corporate executives are taking home salaries that range from 250 to 1,000 times the average worker ... and these incomes are being taxed at the lowest marginal rates EVER! Under the Bush tax cuts of 2001 and 2003, we are using tax-policy to reward corporate executives for moving jobs overseas. If they bring the cash they have stockpiled in tax-sheltered accounts overseas back to America, they don't create new jobs here, they simply pass it on as dividends and bonuses all taxed at lower and lower rates. And now TeaParty/Republicans want to lower these rates even more ... while cutting Social Security and gutting Medicare, replacing it with a plan of expensive private for-profit coverage, Vouchercare.

Are taxes lower abroad?
Yes. The U.S. federal corporate tax rate is the second highest in the world, behind only Japan. At least on paper, the U.S. rate is several times higher than in countries such as Ireland (12.5 percent), Germany (15.8 percent), and Canada (16.5 percent), not to mention zero-tax havens like Bermuda and the Cayman Islands. But in practice, loopholes allow most U.S. corporations to pay about the average of other industrialized countries ... about 25 percent. "The effective tax rates that corporations pay actually go down a lot with deductions and put us closer to the middle of the pack," said Roberton Williams of the nonpartisan Tax Policy Center. And when measured as a percentage of GDP, corporate taxes are lower in the U.S. (2.1 percent) than in most of the 33 other countries in the Organization for Economic Co-operation and Development, such as Japan (2.4 percent), Canada (2.5 percent), and Korea (3.7 percent).

Just Between You and Me: Hey, the facts have never gotten in the way of your TeaParty/Republican, they won't change any minds today. Cut taxes, cut taxes, cut taxes, cut taxes

Why the call for reform?
Both liberals and conservatives believe the corporate tax code can be drastically revised and improved. "Whether the test is fairness or efficiency, the U.S. system gets really low marks," said MIT accounting professor Michelle Hanlon. American business leaders say the 35% tax rate hurts their competitiveness, forcing them to engage in nonproductive strategies to pay a lower rate, and rewarding them for moving business and hiring abroad. On the Left, critics argue that the federal government needs more revenue to reduce deficits, and that closing corporate tax loopholes is necessary. Those loopholes, critics say, will cost the government $102 billion in lost revenue this year alone.

Just Between You and Me: American business leaders say ... WHAT? Show me the jobs created by companies who pay no income taxes in the U.S. and I may be convinced. Obama has tried to meet them halfway, cut the rate from 35% to 23% but close the loopholes. But halfway measures don't appeal to TeaParty/Republicans. Compromise doesn't appeal to TeaParty/Republicans. Making things work for all Americans doesn't appeal to TeaParty/Republicans.

What changes are possible?
President Obama's deficit-reduction commission recommended last year that the corporate tax rate be cut to as low as 23 percent, in conjunction with closing most loopholes. Business leaders generally support that idea. General Electric CEO Jeff Immelt, for example, said in a speech last week that his company would accept the elimination of loopholes "in a heartbeat" if the tax code were simplified and rates were reduced. "I'd take Germany's or Japan's or the U.K.'s corporate tax policy today, sight unseen,'' Immelt said. But because the politics surrounding the issue of tax reform remain highly polarized, it may take several years—and the end of the 2012 presidential election — before the code is actually revamped. "The ball has gotten rolling," says Caroline Harris, chief tax counsel for the U.S. Chamber of Commerce. "[But] if tax reform were easy, we would have already done it."

Just Between You and Me: Business leaders say ... WHAT? Oh, this time they say that's what we need to do. O.K., let's do it. What? TeaParty/Republicans say no. That's right, I forgot about their pledge of allegiance to Grover Norquist.

'The world's best tax law firm'
How does General Electric get away with paying little to no federal taxes? By employing a tax department of some 975 lawyers and accountants, often called the world's best tax law firm. Headed by John Samuels, a bow-tie-wearing former Treasury Department official, the tax department has more than tripled in size over the past two decades, all in the interest of reducing the company's tax bill. The department is widely admired for its artful accounting, crafted by the dozens of former IRS officials and former employees of congressional tax-writing committees that GE has hired. The company's defenders say it doesn't evade taxes; it simply finds legal tax breaks. Any complaints, they say, should be directed at the U.S. code, not the company. What's more, the company says, its tiny 2010 tax bill was a result of writing off $32 billion in losses incurred by its financial services division during the Wall Street meltdown. But GE also files tax returns in 250 global jurisdictions, many of them low-tax countries where profits are parked to avoid the U.S. taxman.

Just Between You and Me: Yeah, blame it on the lawyers <sigh>.

August 27, 2011: The Rich Get Richer; the Middle Class Just Struggles Harder

A cartoon analogy for the current U.S. wealth gap ...

August 25, 2011: Generation Aspirations: Down, Down , Down

August 21, 2011: Lost and Found

August 18, 2011: What is the American Legislative EXCHANGE Council (… and why is it threatening American democracy?)

The Koch Brothers, big tobacco, insurance companies, and the drug industry: all behind the shadowy corporate front group known as the American Legislative Exchange Council (ALEC). On the surface, ALEC is mostly comprised of thousands of state legislators, each paying a nominal fee to attend ALEC retreats and receive model legislation. In reality, corporations pay ALEC a king’s ransom to access legislators to distribute radical legislation that puts corporate interests over American workers and consumers.

So, while the membership appears to be public sector, corporate money dominates ALEC. In fact, public sector membership dues account for only around one percent of ALEC’s annual revenues. ALEC claims to be nonpartisan, but its pro-corporate, anti-consumer mission is clear.

By now many thought they had heard everything to be heard about ALEC and its undemocratic activities. This is simply not true. We once thought ALEC was the complete picture of an “Evil Empire,” but after all this research we have to realize that in reality ALEC is merely a single frame of a huge panoramic picture. ALEC only represents one tool in the arsenal of a well organized, well thought out, well funded and well oiled cabal. Using ALEC's ability to advance legislation beneficial to the collective is ALEC's purpose for existence. It is why Koch, Scaife, Coors' and DeVos' money is invested in these activities: (Should you see materials, position papers¸ viral e-mails, so-called “fact sheets,” newspaper articles, letters-to-the-editor, or other “arguments,” referencing, relying on or using “facts” from any of the organizations listed here below, know immediately that what follows is “bull-hockey” and it should be immediately debunked and trashed.)

DC-BASED PARTNERS

American Council of Trustees and Alumni
American Legislative Exchange Council
Atlas Economic Research Foundation
Bill of Rights Institute
Center for Excellence in Education
Fund for American Studies
Heritage Foundation
Institute for Energy Research
Institute for Humane Studies
Mercatus Center at George Mason University
National Center for Policy Analysis
National Federation of Independent Business Legal Foundation
National Taxpayers Union Foundation
Reason Foundation
Students for Liberty

PARTNERS BASED OUTSIDE OF DC

Bluegrass Institute for Public Policy Solutions
Foundation for Economic Education
Foundation for Individual Rights in Education
Illinois Policy Institute
Jack Miller Center
John W. Pope Civitas Institute
John William Pope Foundation
Lucy Burns Institute
Sam Adams Alliance
South Carolina Policy Council
Texas Public Policy Foundation

ADDITIONAL PARTNER ORGANIZATIONS
Partner organizations change from session to session; additional organizations the Foundation has worked with through the Koch Internship Program and/or Koch Associate Program include:

Acton Institute
American Enterprise Institute
American Spectator Foundation
Americans for Tax Reform Foundation
Boys and Girls Club of South Central Kansas
Cato Institute
Center for College Affordability and Productivity
Commonwealth Foundation
Competitive Enterprise Institute
Federalist Society
Free to Choose Network
Galen Institute
George C. Marshall Institute
George Washington University Regulatory Studies Center
Hudson Institute
Independent Women's Forum
John Locke Foundation
John William Pope Center for Higher Education
Mackinac Center for Public Policy
Network for Teaching Entrepreneurship
Philanthropy Roundtable
State Policy Network
Victims of Communism Memorial Foundation
Washington Legal Foundation
Youth Entrepreneurs Kansas

August 17, 2011: New Regulations on Standard Health Insurance Terminology and Forms Published. For Profit Insurers Protest:

The Obama Administration has published proposed new rules to help consumers make better choices about the health insurance coverages they buy. The rules anticipate 2017 when most Americans will be able to buy their health insurance, even that offered through their jobs, on "insurance exchanges," but will apply to all sales of health insurance starting next March 23, 2012. Finding the best insurance plan for diabetes or breast cancer patients may soon be almost as easy as reading the side of a cereal box to compare calorie counts and sodium content. Under a set of proposed federal regulations issued under the Patient Protection and Affordable Care Act, (the health reform law, "PPACA" or “Obamacare” for all the troglodytes out there), insurance companies and group health plans would need to provide all potential customers with an easy to understand fact sheet that breaks down information about benefits, co-pays, deductibles, and coverage limitations. Some plans already offer that kind of information, but typically not until after customers have already purchased the insurance. And too often, the packet is so long and dense it makes the average American's eyes glaze over.

The new rules would mean all insurance companies would need to provide a simplistic breakdown of pricing and benefits in a standardized, four-page document that can be compared -- "apples-to-apples" -- to other plans, according to Dr. Don Berwick, chief of the Centers for Medicare and Medicaid Services.

For too long, Berwick said, patients have learned what's covered by their insurance plan only after they become sick.

"How can you pick the plan that is best for you and your family if insurance plans are written in words you cannot understand or in type so small you can barely read it?" he asked in a blog post on the White House website Wednesday. "And how can you take advantage of the health benefits you have if you don't know what your plan covers?"

The rules would take effect in March 23, 2012 allowing 180 million Americans with private health insurance to rest assured that "help is on the way to make sure you understand your health insurance," he said.

In 12-point font -- larger than most newspaper type face -- the insurance providers will be required to lay out exactly how much a consumer will pay for everything from emergency care to mental health services and child eye care.

Three "coverage examples" will also be provided to illustrate what proportion of coverage a health insurance plan would cover for three scenarios: having a baby, treating breast cancer and managing diabetes.

To help cut the confusion even further, the packet will be accompanied by a glossary of terms commonly used in the health insurance marketplace, making clear the definitions for terms like co-pay and deductible.

Lynn Quincy, senior health policy analyst for Consumers Union, publisher of Consumer Reports, said in a conference call Wednesday that her organization found that most Americans like the new requirements and say that full disclosure helped them better understand their options.

"By making the terms of health insurance plans easier to understand, consumers are less likely to find themselves in health plans that don't meet their needs," she said. "Creating this health insurance disclosure will help reduce that confusion much in the same way that recent disclosures for mortgage terms or credit cards have helped to better inform consumers."

Obama administration officials based the rules on recommendations from the National Association of Insurance Commissioners, which included representatives from insurance companies, consumer groups and academics.

But many industry representatives remain displeased and have thrown up staunch opposition to the announcement, which was supposed to have been made about five months ago. (Jeanne's Insider Note: The health insurance lobby has fought this regulation tooth and nail and managed to delay its publication and sought to weaken many of its provisions ... at least until now.. In my opinion, the Obama administration has decided "no more coddling" to health insurance interests. The "for-profit" health insurers want their cake and they want to eat it too ... having a law that will expand their market by 35 million covered lives, but with little regulation and doing business as usual when it comes to how they administer their plans ... getting rid of the PPACA requirements about pre-existing conditions and lifetime limits and allowing them to routinely sell coverage and set their rates without regulatory oversight. You know, the same old private insurance racket that has quintupled health insurance rates in just 10 years, while seeing coverage drop, and has paid their top executives hundreds of billions in bonuses. The same old private insurance racket that TeaParty/Republicans suggest we should have when they eliminate Medicare and replace it with "Vouchercare.")

Robert Zirkelbach, press secretary for the industry group America's Health Insurance Plans, said in a statement that the benefits of providing the new summaries were not properly weighed against "the increased administrative burden and higher costs to consumers and employers."

"Since most large employers customize the benefit packages they provide to their employees, some health plans could be required to create tens of thousands of different versions of this new document -- which would add administrative costs without meaningfully helping employees," he said. And that, in turn, could drive up premiums.

The Department of Health and Human Services will take such comments into consideration for the next 60 days before issuing a final decision.

August 15, 2011: Helping You and Your Patients Take Advantage of New Healthcare Reform Provisions

Medscape, the medical education and information service of WebMD which is primarily directed at the medical community itself, has published a short paper advising physicians as to how they can help their patients better understand what the new health care refomr legisltion is giving to them. Since Medscape requires a log-in account, I am re-printing the article below:

Helping You and Your Patients Take Advantage of New Healthcare Reform Provisions

Ronald Viggiani, MD; Emma Hitt, PhD (Authors and Disclosures)

Posted: 08/08/2011

Recent provisions in Medicare and insurance oversight aim to improve the quality of healthcare, lower the cost of care, provide access to affordable care, and protect consumers. This advisory highlights several current provisions of the Patient Protection and Affordable Care Act (PPACA) and outlines what clinicians should know to help patients benefit now. Although many provisions are expected to roll out over the next several years, a number of important ones are already in effect.

Improving Quality of Care While Lowering Costs

PPACA provides assistance for patients with Medicare who have reached the coverage gap (i.e., "donut hole") in medication coverage (Medicare Part D). Patients paying for drugs in this gap will get a 50% discount on covered brand-name drugs and a 7% discount on generic drug purchases; additional savings are expected as this gap is closed over the ensuing years.^[1] Despite these discounts, the entire drug cost counts toward the amount required to qualify for catastrophic coverage.

Patients with Medicare can now take advantage of a variety of preventive services without the need for copayments/coinsurance or deductibles. For more information on Medicare preventive services see this Medscape Healthcare Advisory.^[2]

Patients enrolled in job-related health plans or in individual health insurance policies created after March 23, 2010 also may avoid copayments/coinsurance or deductibles when receiving recommended preventive health screenings, vaccinations, and counseling.^[3] Additional details on this provision can be found at HealthCare.gov.^[3]

Improving Access to Affordable Care

If a parent's or guardian's health insurance policy covers children, they can now add or keep their children on the policy until they turn 26 years old.^[4] (Before PPACA, health plans could remove enrolled children usually at age 19 or sometimes older for full-time students.)^[4] Additional information on this provision can be found at HealthCare.gov.^[4]

The Pre-existing Condition Insurance Plan (PCIP) provides access to insurance for people with pre-existing conditions who have been denied coverage and meet other eligibility criteria (Figure); more information on this plan can be found on the PCIP Website.^[5] Recent updates to this benefit have reduced premiums by as much as 40% and eased eligibility standards.^[6]

Figure. Pre-existing Condition Insurance Plan eligibility criteria. From HealthCare.gov. Available here. Accessed June 19, 2011.^[5]

Providing Consumer Protections

PPACA has a number of provisions in place to protect consumers. Health plans that began on or after September 23, 2010 can no longer retroactively cancel insurance coverage solely because the patient or employer made an honest mistake on their insurance application.^[7]

All job-related health plans that cover children and individual health insurance policies issued after March 23, 2010 cannot limit or deny benefits or deny coverage for a child younger than age 19 simply because the child has a "pre-existing condition."^[8]

Lifetime limits on most benefits are prohibited in any health plan or policy issued or renewed on or after September 23, 2010, and PPACA also restricts and phases out the annual dollar limits many health plans can place on most covered benefits.^[9]

As patients look to health care providers for guidance on how PPACA will benefit them, it is important for clinicians to have a clear understanding of the new law and its provisions.

For more information on these and other provisions of PPACA, visit HealthCare.gov.

References

HealthCare.gov. Making Medicare Prescription Drug Costs More Affordable. Available at: http://www.healthcare.gov/law/provisions/prescription/drugdiscounts.html Accessed June 19, 2011.
Medscape Healthcare Advisory. Making the Most out of Medicare Preventive Services. Available at: http://www.medscape.org/viewarticle/743624 Accessed June 19, 2011.
HealthCare.gov. Preventive Care and Services. Available at: http://www.healthcare.gov/law/provisions/preventive/index.html Accessed June 18, 2011.
HealthCare.gov. Young Adult Coverage Until Age 26. Available at: http://www.healthcare.gov/law/provisions/youngadult/index.html Accessed June 18, 2011.
HealthCare.gov. Pre-existing Condition Insurance Plans. Available at: https://www.pcip.gov/Eligibility.html Accessed June 18, 2011.
HealthCare.gov. Changes to the Pre-existing Condition Insurance Plan in Your State. Available at: http://www.healthcare.gov/news/factsheets/pcip05312011a.html Accessed June 18, 2011.
HealthCare.gov. Curbing Insurance Cancellations. Available at: http://www.healthcare.gov/law/provisions/Curbing%20Insurance%20Cancellations/cancellations.html Accessed June 18, 2011.
HealthCare.gov. Insurance Protections for Children in the Affordable Care Act. Available at: http://www.healthcare.gov/law/provisions/ChildrensPCIP/childrenspcip.html Accessed June 18, 2011.
HealthCare.gov. Eliminating Lifetime and Annual Limits on Your Benefits. Available at: http://www.healthcare.gov/law/provisions/limits/limits.html Accessed June 18, 2011.

August 14, 2011: PPACA Exchange Rules Published: Red States Say No!

Obama administration officials on Friday outlined three new proposed regulations totaling more than 400 pages and awarded $185 million more in grants to states to build the insurance marketplaces. The three new rules are meant to address: (1) establishing exchanges; (2) interacting Medicaid with the exchanges; and (3) determining tax credits and exchange eligibility. No fewer than eight administration officials got on a press call with reporters Friday morning to answer questions about the three regulations and influx of dollars pushing the states forward with their exchange development efforts. Tea party activists and Republican officials in many red states have decried the creation of exchanges as cooperating with “Obamacare” and have passed on the federal support and dollars.

In general, everyone is required to have insurance under the Patient Protection and Affordable Care Act (PPACA) health insurance reform law (PL 111-148, PL 111-152), but it’s not necessarily clear what kind of coverage an uninsured person is qualified to obtain. It could be the tax credits available to buy private coverage in the exchanges; Medicaid; the Children’s Health Insurance Program; or none of the above. The proposed regulations announced Friday aim to make exchanges a place that quickly determines eligibility and speedily enrolls people in the appropriate plan.

The intent is to “establish streamlined, coordinated eligibility determination systems for premium tax credits, Medicaid and CHIP that allow people to buy on line, by mail, or by phone through one simplified streamlined application,” DHHS said.

Exchange Eligibility and Employer Standards

One of the three proposals, the “Exchange Eligibility and Employer Standards,” in most cases “will allow for a near real-time eligibility process so that individuals can receive an eligibility determination and enroll in a plan in a single session,” according to an DHHS fact sheet. “Exchanges will make it simple for individuals and families to access the coverage for which they are eligible, whether that is private coverage, Medicaid or CHIP.”

DHHS added that “no matter how an application is submitted or which program receives the application, an individual will use the same application and receive a consistent eligibility determination, without the need to submit information to multiple programs.”

The 139-page proposal also deals with the creation of exchanges for small employers, called the “Small Business Health Options Program” (SHOP).

These exchanges will make it easier for employers to find out what plans cover, how much they charge, and the quality of their care. Employers that buy coverage through the SHOP may qualify for a tax credit of up to 50% of the employer’s contribution toward employee coverage. The SHOP is also supposed to reduce administrative hassles for small employers.

Medicaid Proposal Not Just About Exchanges

The 203-page proposed rule pertaining to Medicaid would require that exchanges conduct eligibility determinations for Medicaid but it deals with a lot more than that. It also implements the policy to provide additional federal funding for the states when Medicaid expands in 2014 under the health law to enroll an estimated 16 million uninsured people.

For example, the rule creates a new Medicaid coverage group covering adults with incomes up to 133% of the federal poverty line. In 2011, that’s $14,500 for an individual and $29,700 for a family of four. It outlines new federal payment matching rates for newly eligible enrollees providing 100% federal funding for calendar years 2014 through 2016, declining to 90% in 2020, the permanent federal matching rate after that point.

In addition, the rule proposes matching rates for states that expanded coverage in Medicaid for adults before the health law was passed. A DHHS fact sheet on this proposal also notes that it “offers states a choice of new approaches for how they can access new federal funding for newly eligible individuals. Rather than require them to track who would be eligible before and after the health reform laws passed, the proposal lets states opt to use ‘proxy’ rules for who is newly eligible, statistical sampling, or data-driven estimates of the proportion of spending associated with newly eligible individuals.”

The proposal says that determining financial eligibility for both Medicaid and CHIP would be made simpler by relying on modified adjusted gross income. Eligibility categories would be collapsed into four primary groups: children, pregnant women, parents, and the new group of adults with incomes up to 133% of the federal poverty standard. Coverage renewals would be conducted once every 12 months unless the enrollee reports a change or the state agency has information prompting a reassessment of eligibility.

Tax Credits for 20 Million

The 67-page rule proposed by the Treasury Department “lays the foundation to deliver tax credits to help make health insurance affordable for middle-class Americans,” the department’s fact sheet said. When the health law is fully phased in individuals getting the credits will receive an average subsidy of $5,000 a year and a total of 20 million Americans will benefit, it added.

Recipients do not have to wait until they file a return to get the credit; they get it in advance in the form of an IRS payment to the insurance company in which they enroll. If it turns out that the credit was greater than they should have received, the overpayment is recaptured when they file their returns the following April.

In general, the premium tax credit is available to individuals and families with incomes between 100% and 400% of the federal poverty level, or $$22,350 to $89,400 for a family of four. To qualify, people in those income groups must use the credit on a “qualified health plan” offered by an exchange, and they can’t be eligible for Medicaid, Medicare, or “affordable” employer-sponsored coverage.

Official took pains Friday to say they want public comment and that the proposals will be improved depending on what they hear. The proposals have a 75-day comment period. In addition, DHHS will hold forums to get public comment in Atlanta, Chicago, Denver, New York City, Portland, Oregon, and Sacramento, California.

Separately, DHHS Secretary Kathleen Sebelius wrote to state governors Friday seeking their input. “Based on your feedback, HHS is already developing information technology initiatives to make eligibility determinations easier for states, including a federal ‘hub’ through which HHS will provide certain data verification services to all Exchanges as well as Medicaid and CHIP, rather than requiring Exchanges and these other programs to separately interact with multiple federal agencies,” Sebelius wrote.

August 13, 2011: Peter Schiff Was Correct: Right-Wingers Laughed ... America Crashed!

http://www.youtube.com/watch?v=zz_yw0kq3MM

August 12, 2011: Divided Appeals Court Rejects Individual Mandate.

The 11th U.S. Circuit Court of Appeals in Atlanta today upheld in part, and reversed in part, a lower Florida federal district court decision holding the Patient protection and Affordable Care Act unconstitutional. The Appeals Court held that the "individual mandate" in PPACA ("Obamacare" for all you troglodytes) does not pass the interstate commerce test in the U.S. Constitution. It reversed the lower court in holding that the remainder of PPACA can still be enforced without the mandate provision. This is the second appeals court to rule. Earlier the 6th Circuit out of Cincinnati upheld the law in full. The Atlanta court is just wrong.

My defense of the Individual Mandate:

At Least Not Yet …

Opponents of the Patient Protection and Affordable Care Act (PPACA) love to refer to this critically important health care insurance reform law as “Obamacare.” They have managed to covert that term to an epithet which by its mere mention conjures up all sorts of negative connotations, everything from “death panels” to “rationing health care” to “Obama’s private army.” Say “Obamacare” to the average America, and a visceral reaction is almost sure to result … socialized medicine and government bureaucrats saying “no” to Grandma.

But discuss the actual provisions in PPACA without identifying them as being part of “Obamacare,” and the public reactions almost across the board are directly the opposite. Should for-profit insurance companies be prohibited from denying coverage to people with pre-existing conditions … or for that matter simply prohibited from charging them unreasonably higher premiums? YES! Says the American public, by a wide margin, everyone should be able to buy reasonably-priced health coverage regardless of their pre-existing conditions. And the list goes on:

And the results show the same support on virtually every other major component in the law: when the specifics of each provision are explained, public support on a piece-by-piece basis is almost overwhelming, even among many Republicans … as long as the explanation is devoid of references to “Obamacare” and so-called “health care reform.”

This axiom is true across the board except for one blaring exception: the requirement that everyone must have health insurance … the individual mandate. The mandate has become the shibboleth for all that the right considers wrong about Obamacare.

All of which got me to thinking (… which by itself is a very dangerous thing!) WHY AN INDIVIDUAL MANDATE?

The principle legal argument against the individual mandate in the Patient Protection and Affordable Care Act (Obamacare to all the troglodytes out here) is that the Commerce Clause of the Constitution cannot be used by Congress as authority to impose a law requiring individuals to buy health insurance. A negative act – not doing something – cannot impact interstate commerce, say the detractors.

The argument that not-buying health insurance has no impact on interstate commerce and is therefore outside the purview of Congress and thus cannot be mandated might be a valid argument if we lived in society that routinely denied people without health insurance access to health care services for which they would otherwise be unable to pay. This circumstance does not exist in America -- at least not yet.

For many years now in my presentations to health care groups across the country, I have drawn an analogy … noting that the United States does not have Mother Teresas picking up the dead and dying on our streets and alleys -- again, at least not yet. We have a variety of laws and mandates, mainly falling on licensed health care providers, requiring them as a condition of their licenses and participation in the Medicare and Medicaid programs, to at a minimum provide basic health care stabilization services to individuals who are in an emergency medical condition or active labor. The federal law, the Emergency Medical Treatment and Active Labor Act, or EMTALA₁, is augmented in many states by laws and regulations for the various licensed healthcare facilities and health professions to not abandon care and to continue to provide care even though the patient may be unable to pay the going fees and costs_.₂

But even more than through governmental laws and regulations, we are an ethical and moral people with a societal mores that won’t let us abandon the poor and leave them on the steps to our hospitals bleeding and dying … at least not yet.

Recently, I was taken aback, shocked actually, when using the Mother Teresa analogy before a group of health care managers, to hear one of them say, “Well maybe that’s what we should start to do!” What was I hearing? I asked for clarification, and this individual said again, “Maybe it’s time for the free-loaders to pay the price, and go without. Just let them die! People will find a way to get coverage after that starts to happen.”

Has the Tea Party taken this nation that far back … not even in 1776 did the nation leave its dying on the streets. If my questioner’s attitude (and he was supported by several others in the audience as I was bracing for a full TeaParty assault on the speaker) is becoming the accepted norm for an America under the TeaParty “Don’t Tread on Me” flag, then I am pretty sure I don’t want to be part of that society. And yet, that is the only position that makes sense when one goes before the United States Supreme Court and tries to argue that “not having health insurance,” has no impact on interstate commerce.

If the United States is to be really a moral and just society (after all, according to the TeaParty, we are a “Christian Nation”) … one that at a minimum can and does assure basic human services to all its inhabitants, rich and poor, young and old, healthy or not … then it must make sure that we never need Mother Teresas to care for our dead and dying. Oh, we can, and hopefully will have, lots of “Mother Teresa-types” working in health care, dedicating themselves to caring for the sick in hospitals of all types and sponsorship. But this costs money, lots of money, more money than we currently have … which instead of arguing against Congressional intervention, argues forcefully for it.

To quote a leading Republican (while I still can before he flip-flops on this one as well): "Some of my libertarian friends balk at what looks like an individual mandate. But remember, someone has to pay for the health care that must, by law, be provided: Either the individual pays or the taxpayers pay. A free ride on government is not libertarian." Mitt Romney, April 11, 2006 in a Wall Street Journal Op-Ed, promoting his own health care reform package in Massachusetts which included an individual mandate.

Free ride? Again, unless we buy into the argument that the uninsured should be abandoned at the hospital door step, Congress has ever right and the Constitutional authority to impose a mandate that all citizens must have health insurance.

[1] According to the Organization for Economic Cooperation and Development (OECD), a 37 nation consortium of industrialized nations to which the United States is a charter member, the United States is the only industrialized nation which does not have some system of universal health care coverage for all its citizens. But we do, it’s called EMTALA. What we don’t have is a system for paying for it.

[2] But EMTALA is full of holes, but that has not stopped many in arguing that because we have EMTALA, all Americans have access to health care, and we do not need nor should we have a system to assure universal coverage. As another prominent Republican once put it: “All Americans have access to health care. After all, you just go to an emergency room!” President George W. Bush, vetoing an expansion of the State Children’s Health Insurance Program (S-CHIP) August, 2007

August 11, 2011: The Debt Deal Costs (in one easy chart)

August 8, 2011: Political Feeding Frenzy

August 7, 2011: Granddaughter Hannah's Sunday Comic

August 6, 2011: "We have met the enemy and he is us." ... with apologies to Walt Kelly and his "Pogo" comic strip.

TeaParty types love to cite the percentage of the nation’s Gross Domestic Product (GDP) resulting from federal government spending during their beloved era of the 1950's ... a time when government spending was only 18-19% of GDP, not the 23-24% it is today. One problem with their equation, when they argue we must bring government spending down to these same “golden era” 1950 levels, they "conveniently" forget that government revenues in those days, were much higher than today’s 14-15% as a percentage of GDP. In the 1950’s, government revenues averaged around 17.9% of GDP ... approximating a balance in federal spending with federal revenues (albeit still running what today would seem as “manageable” deficits in most years).

Today, TeaPartiers want to bring government spending down to 1950's percentage levels but are UNWILLING TO RAISE GOVERNMENT REVENUES to the same 1950's percentage levels. Today, with the Bush-era tax cuts primarily benefiting the very rich. government revenues from taxation are only 15-16% of GDP -- thus the gap and thus the deficit. Solution: Bring revenues and spending closer into balance, if we want to reduce spending to 18%, raise taxes to 18% of GDP ... or more likely since we are at war against terrorism, and because we are a far different nation in the 2910s then we were in the 1950s, to "war-time" era levels, spending at 20%, revenues at 20.5% ... significantly reduced spending but with higher taxes.

To address only one side of the equation without addressing the other, as TeaPartying Republicans demand, is not a solution only a road to even more perverse outcomes and economic distress for this nation and the world. We are getting the government we are paying for and it is isn’t pretty. We have met the enemy and he is us.

August 5, 2011: The Work of TeaParty/Republicans is Done!

August 4, 2011: U.S. Physician Practices Spend Nearly Four Times as Much Money Interacting with Health Plans and Payers Than Do Their Canadian Counterparts

Per capita health spending in the United States is 87 percent higher than in Canada ... $7,290 versus $3,895 annually. Many factors contribute to the high cost of health care in the U.S., but there is broad consensus that administrative costs stemming from interactions between physician offices and health insurance plans are a leading culprit. In contrast to physicians in Canada, which has a single-payer, predominantly public health insurance system, most U.S. practices must interact with many health plans, each with its own insurance products and rules regarding formularies, prior authorization, billing, and claims submission. For this Commonwealth Fund ... supported study published in Health Affairs, researchers surveyed physicians and administrators in Ontario, Canada, about the time they spend interacting with payers. Results were compared with a national companion survey in the United States.

Key Findings

Physician practices in the United States spent $82,975 per physician per year interacting with payers, compared with $22,205 in Ontario.
If U.S. physicians had administrative costs similar to those of Ontario physicians, their total savings would be approximately $27.6 billion per year.
In the U.S., nurses and medical assistants spent 20.6 hours per physician per week on administrative tasks related to health plans, nearly 10 times the 2.5 hours spent by Canadian nursing staff. U.S. nursing staff spent more time in every category of interactions, most notably obtaining prior authorizations, which accounted for 13.1 hours per physician per week.
Very little time was spent submitting quality data in either the United States or Ontario.

Addressing the Problem

Higher administrative costs in the United States stem from a multi-payer system encompassing multiple insurance products and varying rules and administrative standards. "Having multiple payers clearly generates more administrative costs than a single-payer system," the authors write. The authors add that "these costs should be balanced by possible benefits generated by such a system." However, they believe that the U.S. system could be much more efficient. In interviews with U.S. and Canadian physician leaders and administrators, the authors found widespread agreement that interactions between practices and health plans in the United States could be performed much more efficiently, reducing costs for both physicians and plans alike. For instance, standardizing transactions and conducting them electronically would reduce costs and administrative burden. In addition, provisions in the Patient Protection and Affordable Care Act fostering the adoption of new payment methods, like bundled payment, and new ways for organizing health care delivery, like accountable care organizations, could reduce administrative costs in the long term.

Just Between You and Jeanne: And for all the shouting and screaming about alleged failings in the Canadian health system, the bottom line for our two nations ... nations ethnically and culturally similar ... shows that for Canadians the system is working ... for the U.S., not so much. In addition to the annual per capita costs differentials: $3285 in Canada vs. $7290 in the U.S. ... the quality and effectiveness of the two systems seems to have varied dramatically. Canada began it's system of single-payer" universal health care coverage in 1971. The U.S. under Richard Nixon debated doing something similar, but the U.S. plans were stymied by private insurance and health care opposition. In 1971, the U.S. and Canada exhibited virtually identical demographic profiles with regard to infant mortality, life expectancy and per capita spending. Now 40 years later, the U.S. spends twice as much per capita but is getting far less in results. You do the math ...

August 2, 2011: Dr. Boehner has the Cure for America's Rising Health Care Costs:

August 1, 2011: Former Clinton Medicare Chief, Bruce Vladeck Sounds Off on Proposed Medicare Cuts in 2011

Bruce Vladeck, PhD, was administrator of the Health Care Financing Administration (now the Centers for Medicare and Medicaid Services) from 1993-1997, and was subsequently appointed by President Clinton to the National Bipartisan Commission on the Future of Medicare. In an interview with the Kaiser Family Foundation, Dr. Vladeck offers a rather negative view on one of the more prominent suggestions about Medicare cost-savings ... elimination of first dollar coverage via caps on Medicare supplemental insurance (so-called "MediGap" coverages) and on Medicare Part C "Advantage" plans.

While it appears that major policy changes to Medicare are absent from the first stage of the debt-ceiling deal approved by Congress this week , it's inevitable that Medicare "restructuring" will surface, if not in the second stage of the deficit reduction process this year, then sometime soon thereafter. The usual laundry lists of proposals for Medicare savings are already being circulated throughout official Washington. Most of these ideas have been around for years, and have never gotten past the talking stages because of political opposition or because they are simply bad ideas. But one especially pernicious proposal appears to have increasing traction among both politicians and policy analysts: the prohibition of first-dollar coverage in Medicare supplemental insurance, whether purchased in the individual markets or provided as a retiree benefit.

This proposal is based on a simple and seemingly self-evident syllogism. Medicare beneficiaries with supplemental insurance that provides them with first-dollar coverage by paying their deductibles and co-payments use more services than the small minority of beneficiaries without such coverage. Hence, forbidding such coverage would reduce use, thereby saving Medicare a pile of money. Sometimes this poison pill is sugar-coated, as in the recent proposal from Sen. Joe Lieberman, I-Conn., and Sen. Tom Coburn, R-Okla. In their plan, the structure of Medicare out-of-pocket liabilities would be altered to create protection against catastrophic out-of-pocket expenses for some, in exchange for higher out-of-pocket liabilities for most beneficiaries. But whatever form the proposals take, they would have seriously adverse consequences for the sickest and most needy Medicare beneficiaries.

American policymakers, and the health economists who enable them, are obsessed with issues of consumer demand, and the notion that health care is so expensive because Americans are so eager to consume it. In fact, insured Americans already have the highest out-of-pocket liabilities in the developed world, and use fewer services initiated by consumers. In the absence of supplemental coverage Medicare beneficiaries would have still higher out-of-pocket liabilities than other insured Americans, which is why essentially every beneficiary who can afford it seeks extra coverage. But while overuse of some services in some communities is inarguably a part of the Medicare cost problem, there is no compelling evidence that consumer-generated demand is a significant part of the problem. Whatever the political rhetoric, Medicare beneficiaries simply aren’t banging down the doors of physicians' offices demanding extra MRIs and surgical procedures.

Quite the contrary: during the past decade, Congress has eliminated cost-sharing for most Medicare preventive services in response to concerns about the underuse of such services, and because of evidence that out-of-pocket costs were a significant deterrent, especially for less affluent and minority beneficiaries. More generally, while the evidence has been clear since the RAND experiments of the early 1970s that out-of-pocket costs reduce health care use, it's also been clear that their effect is inversely related to disposable income: the less income a person has, the greater the effect of copayments and deductibles, not to mention the greater likelihood of poor health.

That's why Medicaid historically forbade deductibles, and now permits them at only nominal levels. More importantly, the growth in out-of-pocket costs for health care consumers during the last decade or so has provided an abundance of illustrations of the basic fact that consumers deterred from seeking health care for economic reasons are just as likely to forego needed services as "discretionary" ones, and that that phenomenon is further correlated with income. Faced with higher out-of-pocket expenses, consumers may get fewer Botox treatments or buy fewer laxatives, but they also skip visits for management of their heart disease and diabetes, and don't fill their prescriptions for hypertension medication.

The reason health insurance exists in the first place, after all, is to relieve individuals who are not medical experts of the need to figure out whether they can afford any particular medical service. In a rational world, policymakers worried about unnecessary or inappropriate use of specific services would just refuse to pay for those services. But in the contemporary American political environment, they might be accused of "rationing" or "death panels," so they stay away. Instead, they appear to be willing, once again, to impose the consequences of their inability to control costs on those least able to bear them

Just Between You and Jeanne: I must admit that I have long questioned the appropriateness of "first dollar" insurance coverage for health care services, worrying as Senatecritters Coburn and Lieberman apparently do, about the possibility of overuse and priming the pump on unnecessary or ineffective utilization. But Dr. Vladeck has raised some very interesting points that need to be considered.

TeaParty/Republicans, especially through the Paul Ryan "Vouchercare" proposal, are already well into the process of shifting the major cost risk/burden of Medicare on to seniors themselves. And it is clear that those seniors with only moderate to low resources will be hit the hardest and will find themselves most strained in accessing future health care services.

The CBO reports accompanying its assessment of the Ryan Vouchercare plan show clearly how the cost burden is being shifted from today's "traditional Medicare with MediGap supplemental coverage" cost-sharing ratios to 2022's TeaParty/GOP replacement for Medicare, Vouchercare.

Looking at the CBO chart to the left, the first three lines show the present-day situation .The cost to today's seniors of Medicare coverage is about 89% of the cost of a comparable private plan. Because everything is related to this baseline private plan, we see that the government pays, for each individual, 54/89 = 60% (approx) of the cost of insurance, while that individual pays the remaining 40%. For example, a typical senior age 65 might pay Medicare premiums of $150 per month (Medicare parts B and D) and another $150 per month for supplementary insurance. (The CBO, in a note to this table, says “A beneficiary’s spending includes premiums, out of pocket costs for covered services, and payments for any supplemental insurance; see point 1 above). This comes to $3600 per year, which according to the chart is 35% of the cost of a private plan. Thus, a simple computation gives the cost of a private plan to be about $10,000 and the cost of Medicare coverage to be about $9000 — split between $3600 individual and $5400 government contributions.

Now let’s look at what happens in 2022 when the Ryan plan kicks in. In the CBO report we see that it estimates the premium support (government) to be $8000 for a typical 65-year-old (both for Medicare and Ryan Vouchercare). According to the chart, this is 39% of the baseline private plan cost. To find the individual’s contribution, you multiply: $8000 x 61/39 = $12,512; this amounts to a charge of about $1000/month for new retiree (age 65). For a senior on traditional Medicare, however, the individual contribution would be $8000 x 27/39 = (about) $5538. Thus, the Ryan Vouchercare plan would add about $7000 to the cost of insurance for an average 65-year-old person in 2022.

However, 65 is not the typical age of a retired person, and the Ryan Vouchercare plan (unlike traditional Medicare) allows extra charges based on age. For example, on page 8 the CBO document estimates the average government expenditure over all retirees 65 and older to be $15,000, not $8000. Applying the same calculation as above shows that the cost to an individual under the Ryan plan would be around $23,468 (nearly $2000 per month), while the cost under traditional Medicare would be only about $10,384. The difference is $13,084.

Thus, the average retired person in 2022 would have to pay more than $1000 per month extra under the Ryan plan.

The bottom line, therefore, is that Ryan’s plan to replace Medicare with vouchers would require the average retiree to play between approximately $7,000 to $13,000 per year more for health insurance while eliminating much of the cost savings benefits of the Medicare system (which is far more cost effective than private insurance). Couple Vouchercare with proposals to require seniors to pay even more out-of-pocket for the first levels of coverage and we clearly see the multitiering of U.S. health care in process. Affluent seniors having the most access and coverage, with a sliding scale of coverages for the disappearing middle class and low income seniors.

July 30, 2011: My New Bumper Sticker:

July 28, 2011: And So it Begins: Koch Billions Fund Medicare Lies and Distortions

The conservative American Action Network is today launching a large-scale mail and newspaper ad campaign, targeting a long list of House districts trying to shore up freshmen TeaParty/Republicans on the issue of Medicare. The campaign, which includes both mail pieces and newspaper ads, charges Democrats with attempting to “balance the budget on the backs of seniors” with a proposal to amend Medicare Part D. All told, the AAN message offensive will cost about a million dollars. That’s a significant investment of Koch brothers money into the Medicare debate, which Democrats have dominated so far this year, and is perhaps an indication of the challenges these freshmen TeaParty-ranters are facing as many Americans are beginning to realize the folly of the 2010 elections, and the disastrous turn electing these far right-wingnuts to office has created. But it is only the first of what may be billions of Koch brothers and other right-wing billionaire money that will soon be flooding into the 2012 presidential and Congressional; elections.

Democrats have spent months quite successfully (so far) accusing Republicans of attempting to “end Medicare” in the House GOP budget. The AAN campaign pushes back on that allegation, hitting Democrats for proposing “drastic changes” to prescription drug rebates and arguing that President Barack Obama wants to impose “Medicaid-style price controls” that would be harmful. Oh my, Medicaid is the boogeyman now.

"President Obama and liberals in Washington are trying to shift the burden of deficit reduction to seniors through a proposal to introduce radical, Medicaid-style rebates to the Medicare Part D program,” said Brian Walsh, president of the American Action Network. “The American Action Network wants to praise those principled members of Congress who are opposing this radical plan to balance the budget on the backs of America’s seniors.” The legislation AAN is targeting, the Medicare Drug Savings Act of 2011, was introduced last month. In unveiling the bill, California Rep. Henry Waxman said its goal was to bring down the cost of drugs by making drug manufacturers pay a rebate to the government for Part D recipients who receive both Medicare and Medicaid benefits.

That’s not how the bill is described in the AAN campaign, which contends that new costs to drug companies would end up being passed on to consumers. In one mail piece, which is being sent to constituents in Pennsylvania’s 7th Congressional District, AAN frames the Medicare fight in these terms: “President Obama’s Medicare Plan: Balance the budget on the backs of seniors! Congressman Pat Meehan is fighting to protect Medicare.” AAN and the Koch brothers realize how susceptible these lies the American electorate has become, one of the side-effectes of watching too much "fair and balanced" news on Fox.

The mail campaign will reach 22 congressional districts in 14 states, all of them represented in Congress by Republicans. Besides Meehan, they are Arkansas Rep. Tim Griffin, Colorado Rep. Cory Gardner, Florida Reps. Dan Webster, Dennis Ross and Sandy Adams; Iowa Rep. Tom Latham, Indiana Rep. Larry Bucshon, Maryland Rep. Andy Harris, New Hampshire Reps. Frank Guinta and Charlie Bass; New Jersey Reps. Jon Runyan and Leonard Lance; Nevada Rep. Joe Heck; Ohio Reps. Pat Tiberi and Steve Stivers; Pennsylvania Reps. Jim Gerlach, Lou Barletta and Charlie Dent; West Virginia Rep. David McKinley, Arizona Rep. Paul Gosar, and Virginia Rep. Robert Hurt. Most of the 22 are freshmen first elected in November 2010.

The Democratic Congressional Campaign Committee responded to the AAN effort by pointing again to the House GOP budget authored by Wisconsin TeaParty/GOP Rep. Paul Ryan. “No matter how much secret money groups like this spend, they’re trying to defend the indefensible, and that is the Republican plan to end Medicare and raise health care costs for seniors,” said DCCC press secretary Jesse Ferguson.

Republicans have a long way to go in evening out the fight over Medicare, which helped flip a GOP-leaning congressional district in upstate New York into Democratic hands in May. But the GOP has shown that it’s capable of using the entitlements debate to its advantage. In 2010, Republican candidates and outside groups hammered Democratic members of Congress for voting to end the Medicare Advantage program as part of the Patient Protection and Affordable Care Act. (Something the Ryan "Vouchercare" plan would also do, but don;t tell anyone that.) The AAN campaign highlights the close relationship between that organization and its policy-oriented partner group, the American Action Forum, run by far rightwing-nut Dennis Holtz-Eakin . The new mail and advertising campaign is based on an AAF study that was released last week, concluding that a Democratic-backed proposal to change the Medicare Part D rebate structure would lead to a rise in drug premiums.

The American Action Network spent over $26 million of Koch brothers and other billionaire money in the 2010 election cycle, according to the Center for Responsive Politics, making it one of the most influential outside groups of the midterm campaign. The group’s new print advertisements will begin appearing today and the mailings are expected to start reaching voters in the next few days.

July 27, 2011: Side-by-Side Comparison of Impact on Medicare in Major U.S. Budget-Cutting Proposals

	Bipartisan Policy Center Debt Reduction Task Force (Domenici-Rivlin)	Nat’l Commission on Fiscal Responsibility and Reform (Bowles-Simpson)	House Concurrent Resolution 34	President’s Framework for Shared Prosperity and Shared Fiscal Responsibility	Senate “Gang of Six”
Introduced	November 17, 2010	December 1, 2010	April 5, 2011	April 15, 2011	July 10, 2011
Medicare Cost Sharing	Unify Cost-Sharing for Parts A and B · Combined Annual Deductible of $500 · Single Coinsurance of 20% · Annual Out-of-Pocket Cap at $5650 · Deductible and Out-of-Pocket Cap Indexed to Per Capita Increases in Medicare Spending	Unify Cost-Sharing for Parts A and B · Combined Annual Deductible of $500 · Single Coinsurance of 20% · Set Coinsurance at 5% for Annual Spending $5650-$7500 · Set Out-of-Pocket Cap at $7500	No Provision	No Provision	Not Specified in Executive Summary
Medigap	No Provision	Prohibit Medigap plans from Covering the First $500 and Set a 50% Limit on Next $5000	No Provision	No Provision	Not Specified in Executive Summary
Independent Payment Advisory Board (IPAB)	Require IPAB to Review Medicare Payment Structure Every 2 Years and Recommend Changes to Parallel Developments in the Private Market … Require Recommendations to Automatically Become Law, Unless Congress Acts to Block Them	Allow IPAB to Make Recommendations for All Providers (no exemptions) if Costs Grow Faster than Targets … Submit/Consider Reforms to Lower Spending, Including Further Expanding the IPAB’s Authority to Make Recommendations for Cost-Sharing and Benefit Design … and to Look Beyond Medicare	No Provision	Set New Target of Medicare Growth at Per Capita GDP +0.5% (currently at GDP +1.0%) … Allow IPAB to Make Recommendations to Make Value-Based Benefit Design Changes … Add Additional Enforcement Mechanisms, Such as an Automatic Sequester as a Backstop to the IPAB, Congress and/or DHHS	Not Specified in Executive Summary
Dual Eligibles	Eliminate Barrier to Enrollment of Dual Eligibles in Managed Care Options … Provide fast-Track Process for Waiver Applications … Maintain Medicaid Payments for Medicare Premiums for Low-Income Beneficiaries and the Hold-Harmless Provision	Give Medicaid Full Responsibility for Providing Health Coverage to Dual Eligibles with Medicare Continuing to Cover its Share of Expenses … Require Medicaid to Place Dual Eligibles into Managed Care Plans	No Provision	No Provision	Not Specified in Executive Summary
Prescription Drugs	Require rebates on Single-Source Drugs as a Condition of Participation in Medicare Part D	Require Medicare Rebates for Dual-Eligibles Enrolled in Medicare Part D	No Provision	Limit Payments for Rx by “Leveraging Medicare’s Purchasing Power” … Speed-Up Availability of Generics … Prohibit “Pay-for-Delay” Agreements	Not Specified in Executive Summary

	Bipartisan Policy Center Debt Reduction Task Force (Domenici-Rivlin)	Nat’l Commission on Fiscal Responsibility and Reform (Bowles-Simpson)	House Concurrent Resolution 34	President’s Framework for Shared Prosperity and Shared Fiscal Responsibility	Senate “Gang of Six”
Introduced	November 17, 2010	December 1, 2010	April 5, 2011	April 15, 2011	July 10, 2011
Physician Payments Sustainable Growth Rate (SGR)	· Accommodate a Permanent “Fix” to the Sustainable Growth rate Formula … · Eliminate Exemption for Physician Payments in PAYGO and · Require All Increase to be Offset by Other Spending Cuts in Medicare	· Reform the Sustainable Growth Rate (SGR) … · Replace Cuts Required by SGR with a “Freeze” Until 2013 and Then a 1% Cut in 2014 … · Direct CMS to Develop a New Payment Formula to Begin 2015 … · Eliminate the Exemption in PAYGO and Fully Offset Costs of Reforming SGR	No Provision	No Provision	Require the Senate Finance Committee to Reform or Permanently Replace the SGR and to Fully Offset the Cost ($20B) with Other Health Care Savings
Other Medicare Provisions	Bundle Medicare Payments for Post-Acute Care	· Increase the Authority and Funding for CMS to Fight Fraud, Waste and Abuse … · Reduce Payments for Medicare GME and IME and Phase-Out Medicare Bad Debt Payments … · Accelerate Home Health Payment Reductions in PPACA … · Expand Successful Cost-Reduction Demonstration Projects by 2015	No Provision	Recover erroneous Payments from Medicare Advantage, Part C	Require the Senate Budget Committee to Achieve Program Integrity Savings in Entitlement Programs to Curb Fraud and Abuse
Community Living Assistance Services and Support (“CLASS”)	No Provision	Reform or Repeal the CLASS Act Privisions	No Provision	No Provision	Repeal the CLASS Act Provisions
Sources and Notes	The Debt Reduction Task Force, “Restoring America’s Future” November 10, 2010	The National Commission on Fiscal Responsibility and Reform “Moment of Truth” December 1, 2010 The report also suggests that its be applied to “TRICARE for Life,” federal employee retirement policies and to private employer-covered retirees	The House Budget Resolution Does Not Include Detailed Specifications for Medicare. We are told to look to Paul Ryan’s “Vouchercare” proposal for details		Senatecritters: Saxby Chambliss (T-Ga.) Tom Coburn (T-Okla.) Kent Conrad D-N.D.) Mike Crapo (T-Ida.) Dick Durbin (D-Ill.) Mark Warner (D-Va.)

July 26, 2011: Medicare Part D Actually Saves Costs Under Parts A and B

Seniors with access to affordable prescription drugs require less spending on emergency and short-term nursing care, according to a study of Medicare Part D released yesterday. Published in the Journal of the American Medical Association, the report shows that the federal program … which subsidizes prescription drugs for seniors … "significantly" reduces non-drug medical costs for those who had limited coverage before the program began in 2006.

The study results support arguments of advocates of the so-called Part D benefit Congress created in 2003. The argument then: that by enrolling Medicare beneficiaries with inadequate coverage in subsidized drug plans, the increased coverage and better adherence to Rx care, would reduce other health care spending, both inpatient and emergency care. Medicare spent about $62 billion for prescription drugs in 2010. Spending on non-drug health services fell about $1,200 a year for about 10 million patients lacking employer-sponsored health plans or who otherwise had inadequate coverage before the benefit took effect, the study found. The $1,200 is about 11% lower than the spending would have been without the benefit.

The Part D Medicare drug benefit has proven to be “even more beneficial than we previously knew,” said Dr. J. Michael McWilliams, an assistant professor of health policy at Harvard Medical School in Boston, and lead author of the study.

The report is the latest in a string that indicate Part D gives seniors better access to the drugs they need, increases their adherence to medication instructions and reduces their out-of-pocket costs. But this is the first major report to show that better drug care translates to a drop in spending on acute and post-acute care, including hospitalizations and short-term nursing home stays.

One caveat: The Medicare drug benefit didn’t change spending patterns for seniors who already had employer-sponsored retiree plans or private policies before the new Medicare drug benefit was established. The additional cost of subsidizing these individuals, and/or costs added when many employers dropped retirees from their existing plans, may actually have driven up Medicare costs for other taxpayers.

How the Study Worked: To examine the impact of the program, researchers from Harvard Medical School and Brigham and Women's Hospital looked at survey data and linked Medicare claims between 2004 and 2007. Excluding drug costs, health care spending for the 2,538 beneficiaries who already had generous benefits was about the same as would be expected if Medicare Part D didn't exist.

But for the 3,463 seniors with only limited or no prescription drug benefits … those who stood to benefit most from the program … experienced a decreased need for emergency treatment and rehabilitation, even as their access to routine doctor visits and other outpatient services remained roughly the same. In real terms, their non-drug health care costs dropped $1,200 per year below what would have been expected without Part D, according to the report.

Dr. McWilliams hopes the findings will encourage more coordination among Medicare's branches. The current practice of paying doctors and other health care providers for individual services offers little incentive for Medicare Part D to coordinate care with parts A and B, he said. "The fact that drug spending can substitute for non-drug spending suggests we could be doing a better job of aligning incentives," he said.

The report may also lend credence to the Patient Protection and Affordable Care Act’s plan to close the despised Medicare Part D "doughnut hole" by 2020. The gap requires seniors to pay 100% of their drug costs after they've spent $2,840 on prescription drugs. They continue to pick up the next $3,608 out-of-pocket until they become eligible for catastrophic coverage and Medicare kicks back in. McWilliams, a practicing general internist at Brigham and Women's Hospital, has seen chronically ill patients drop all but the most crucial prescriptions or stretch their drugs by skipping doses … two factors that can lead to increased emergency costs. He said. "Our findings suggest that even though closing the doughnut hole will cost the nation in spending, there is likely to be some savings in non-drug care. In other words, it may not cost as much as we expected," adding, "And for seniors, it may keep them out of the hospital."

The report, released just as lawmakers fiercely debate the future of Medicare, advocates from both sides of the aisle found something to like in the news about Part D.

Edwin Park, vice president for health policy for the liberal think tank Center on Budget and Policy, said he agrees the prescription plan should be aligned more closely with inpatient and outpatient health care.

"In fact, the problem with Part D that a number of us had when it was enacted is that it was specifically set apart, instead of being folded into the fee-for-service system," he said. "Generally, this report has some application to showing how important coverage is, especially during the debt and deficit debate and all of the talk going on right now about the value of health reform. Coverage matters."

Conservatives tout the results for a much different reason. Because Part D is run through private plans, they point to the program as an example of a competitive system that improves care while bringing down costs. Joseph Antos, a scholar in health care and retirement policy at the conservative American Enterprise Institute, called the study "a significant but an obvious one."

July 25, 2011: Paul Krugman: Messing with Medicare

From this morning's New York Times:

At the time of writing, President Obama’s hoped-for “Grand Bargain” with Republicans is apparently dead. And I say good riddance. I’m no more eager than other rational people (a category that fails to include many Congressional Republicans) to see what happens if the debt limit isn’t raised. But what the president was offering to the G.O.P., especially on Medicare, was a very bad deal for America.

Specifically, according to many reports, the president offered both means-testing of Medicare benefits and a rise in the age of Medicare eligibility. The first would be bad policy; the second would be terrible policy. And it would almost surely be terrible politics, too.

The crucial thing to remember, when we talk about Medicare, is that our goal isn’t, or at least shouldn’t be, defined in terms of some arbitrary number. Our goal should be, instead, to give Americans the health care they need at a price the country can afford. And throwing Americans in their mid-60s off Medicare moves us away from that goal, not toward it.

For Medicare, with all its flaws, works better than private insurance. It has less bureaucracy and, hence, lower administrative costs than private insurers. It has been more successful in controlling costs. While Medicare expenses per beneficiary have soared over the past 40 years, they’ve risen significantly less than private insurance premiums. And since Medicare-type systems in other advanced countries have much lower costs than the uniquely privatized U.S. system, there’s good reason to believe that Medicare reform can do a lot to control costs in the future.

In that case, you may ask, why didn’t the 2010 health care reform simply extend Medicare to cover everyone? The answer, of course, is political realism. Most health reformers I know would have supported Medicare for all if they had considered it politically feasible. But given the power of the insurance lobby and the knee-jerk opposition of many politicians to any expansion of government, they settled for what they thought they could actually get: near-universal coverage through a system of regulation and subsidies.

It is, however, one thing to accept a second-best system insuring those who currently lack coverage. Throwing millions of Americans off Medicare and pushing them into the arms of private insurers is another story.

Also, did I mention that Republicans are doing all they can to undermine health care reform — they even tried to undermine it as part of the debt negotiations — and may eventually succeed? If they do, many of those losing Medicare coverage would find themselves unable to replace it.

So raising the Medicare age is a terrible idea. Means-testing — reducing benefits for wealthier Americans — isn’t equally bad, but it’s still poor policy.

It’s true that Medicare expenses could be reduced by requiring high-income Americans to pay higher premiums, higher co-payments, etc. But why not simply raise taxes on high incomes instead? This would have the great virtue of not adding another layer of bureaucracy by requiring that Medicare establish financial status before paying medical bills.

But, you may say, raising taxes would reduce incentives to work and create wealth. Well, so would means-testing: As conservative economists love to point out in other contexts — for example, when criticizing programs like food stamps — benefits that fall as your income rises in effect raise your marginal tax rate. It doesn’t matter whether the government raises your taxes by $1,000 when your income rises or cuts your benefits by the same amount; either way, it reduces the fraction of your additional earnings that you get to keep.

So what’s the difference between means-testing Medicare and raising taxes? Well, the truly rich would prefer means-testing, since they would end up sacrificing no more than the merely well-off. But everyone else should prefer a tax-based solution.

So why is the president embracing these bad policy ideas? In a forthcoming article in The New York Review of Books, the veteran journalist Elizabeth Drew suggests that members of the White House political team saw the 2010 election as a referendum on government spending and that they believe that cutting spending is the way to win next year.

If so, I would respectfully suggest that they are out of their minds. Remember death panels? The G.O.P.’s most potent political weapon last year — the weapon that caused a large swing in the votes of older Americans — was the claim that Mr. Obama was cutting Medicare. Why give Republicans a chance to do it all over again?

Of course, it’s possible that the reason the president is offering to undermine Medicare is that he genuinely believes that this would be a good idea. And that possibility, I have to say, is what really scares me.

Sunday: July 24, 2011: Hannah's Cartoon

You may not want to go to her blog: "Running with Bolt Cutters," http://runningwithboltcutters.wordpress.com/

July 18, 2011: FACT CHECK: Some Facts on the USA's "Debt Problem"

So does the U.S. have "a spending problem," as Republicans keep repeating in the current debate over how to reduce the nation's record deficits? Or is the problem that taxes are not high enough? Those questions frame a long-running partisan debate, and as usual we won't offer an opinion one way or the other. But for those seeking their own answers, we can offer some fiscal history and factual context.

Some key facts we think are worth considering:

Federal spending ("outlays" in budget jargon) is expected to equal 24.1 percent of the nation's gross domestic product in the current fiscal year, which ends Sept. 30. The figure was 25 percent in fiscal year 2009, highest since 1945. On the other hand, federal revenues are expected to drop to 14.8 percent of GDP this year, lower even than the 14.9 percent attained in both 2009 and 2010. There has been only one year since World War II when revenues have been as low as in any of these years: 1950, when the figure was 14.4 percent. [According to Jeanne: In other words, taxes, especially on higher incomes, are at their lowest levels in over 60 years.]
These historically high rates of spending and low rates of taxation have combined to produce a chain of deficits that are also the highest since WWII. [According to Jeanne: This trend began with St. Ronald of Reagan in 1981, briefly alleviated under William Jefferson Clinton in 1998-2000, and sent into the stratosphere under George W. Bush with two senseless and unnecessary wars and tax cuts that did nothing to stimulate the economy except to perversely encourage business executives to send even more jobs overseas, increasing corporate profits in the short run, upping their pay and bonuses, which were then taxed at lower and lower rates, causing them to repeat the cycle, exporting more jobs, to make more short-term money ... until, of course, the clock ran out on them ... and on the United States of America.] The deficit was 10.0 percent of GDP in fiscal 2009. It declined to 8.9 percent last year as the economy started to recover, but is projected to go up to over 9 percent this year. Each of these deficits is larger than in any year since 1945, measured as a percentage of GDP. [According to Jeanne: Which of course must all be Obama's fault.]
The U.S. is borrowing about 36 cents of every dollar spent so far this year. It borrowed 37 cents on the dollar last year, and 40 cents in fiscal 2009. The largest components of federal spending are Social Security and Medicare programs for the elderly (33.5 percent of total outlays in 2010) and national defense (20.1 percent). Interest payments on the federal debt alone accounted for 5.7 percent of all federal spending, and that percentage is rising.
The federal income tax accounted for 41.5 percent of federal receipts in 2010 (down from 49.6 percent prior to the Bush tax cuts of 2001 – 2003). [According to Jeanne: During which time the economy was enjoying extraordinary growth,] Corporate taxes brought in only 8.9 percent, also down sharply since the recent recession. Payroll taxes and other "social insurance" payments accounted for 40 percent of total receipts in 2010.

It's easy to argue one side or the other by just citing facts that support a particular view, and omitting others. In the Analysis that follows, we offer some graphics, details and documentation in an attempt to give our readers a quick look at the entire picture — both where the money goes, and where it comes from.

Analysis

A glance at this chart quickly puts our current fiscal mess in historical context. We created it using historical budget data from the federal Office of Management and Budget, updated with the most recent estimates of the current fiscal year's outlays and receipts from the nonpartisan Congressional Budget Office, issued June 22 as part of CBO's 2011 long-term budget outlook.

Not since the enormous effort required to defeat Nazi Germany and Japan in WWII has the gap between Washington's spending and its revenues been so large, as a portion of the economy. Then, taxes were increased sharply to pay for the war, but spending increased even faster. In recent years, Washington has increased spending while cutting taxes.

The current situation is a marked change from the booming 1990s. In those years revenues increased, due to a 1993 tax increase, which fell most heavily on those making more than $200,000 a year. Meanwhile spending decreased relative to the rapidly growing economy, partly because of an absolute decline in military spending following the collapse of the Soviet Union in 1991. Deficits were erased, and the government posted surpluses in fiscal 1998, 1999, 2000 and 2001.

But then a string of deficits began in the fiscal year 2002, and there is no end in sight. For the current year, the administration originally projected in February a deficit equal to 10.9 percent, a new postwar record. The Congressional Budget Office in April, using different economic assumptions, projected that enacting the president's budget would produce a deficit of 9.5 percent of GDP, and that making no changes to current law would result in a deficit of 9.3 percent of GDP.

What has produced these huge budget gaps? Tax cuts and wars have been big factors, as have recessions and expanded spending for health care in both Republican and Democratic administrations. For example:

Income-tax receipts are down sharply since the Bush tax cuts. In fiscal 2000, the year before the cuts began to take effect, receipts from the federal income tax on individuals amounted to 10.2 percent of GDP. That figure was down to 6.2 percent of GDP last year.
Spending for the military and for homeland security has risen substantially since the attacks of Sept. 11, 2001. Spending for national defense rose from 3.0 percent of GDP that year to 4.8 percent last year.
Non-military spending also has continued to rise. President George W. Bush pushed through an expensive prescription drug benefit for seniors in 2003, the largest expansion of Medicare in its history. In the financial crisis of 2008, Bush also pushed for and signed for a massive banking bailout. In early 2009, President Barack Obama pushed for and signed an expensive stimulus measure, and after a long fight in Congress he signed another expensive plan, the health care law, in March of last year, aimed at expanding coverage for millions who lack health insurance.
Two economic recessions have had their effect. The recession of 2001 began in March and lasted until November. And the worst downturn since the Great Depression began in December 2007 and continued until June 2009. In both cases unemployment remained high for long after business activity began to recover, holding back both wages and the taxes that jobless workers would have paid on them.

We won't attempt to assign blame to one party or the other for the deficits. There is plenty of blame to go around, some of which rests with an American public that won't accept cuts in the largest categories of public spending, and also resists tax increases on anybody but "the rich."

Where Does It Go?

The biggest share of federal spending now goes for Social Security (20.4 percent in 2010) and Medicare (13.1 percent), the two entitlement programs that big majorities of Americans want to protect from any reductions, according to a recent poll. Together these two programs for senior citizens consume more than one-third of spending, far more than national defense, which accounts for just 20.1 percent, despite the increases of recent years.

Some categories that are unpopular with much of the public turn out to represent a fairly small part of total spending. Foreign aid, for example, amounts to less than 1 percent of the entire budget — even counting in military assistance to Israel, Egypt, Iraq and Afghanistan. All agriculture programs — including farm subsidies — make up just over one-half of 1 percent.

Where Did It Go? Major components of the $3.5 trillion spent in fiscal 2010
Social Security	20.4%
National Defense	20.1%
Medicare	13.1%
Medicaid/CHIP	8.1%
Interest	5.7%
Low-Income Assistance	5.3%
Unemployment Compensation	4.6%
Education & Training	3.7%
Federal Employee Retirement	3.5%
Veterans	3.1%
Transportation	2.7%
Other health care	2.6%
Parks & natural resources	1.3%
Space/Science	0.9%
Foreign aid	0.9%
Agriculture	0.6%
Everything else	3.5%

The wildly unpopular TARP program, used to finance banks, a big insurance company and two U.S. auto companies, is now actually bringing billions back into the Treasury, as old loans are repaid and government-owned stock is sold to the public. The nonprofit investigative project Pro Publica figures that $322 billion has now flowed back into the Treasury, of the $573 billion loaned, invested or spent originally. And even the Obama administration's $787 billion stimulus program, so excoriated by Republicans, has nearly run its course. It was enacted in 2009, and according to the official Recovery.gov website, had spent 84 percent of the total as of June 30. That included 90 percent of the tax benefits, 83 percent of entitlements, and 78 percent of contracts, grants and loans.

Borrowing 36 Cents on the Dollar

The current gap between tax revenue and congressionally approved spending is so great that so far this fiscal year the federal government has borrowed an average of 36 cents of every dollar paid out. According to the most recent "Monthly Budget Review," issued by the Congressional Budget Office on July 8, the total spent through the end of June (the first nine months of the current fiscal year) was estimated at $2.705 trillion. But government receipts fell $973 billion short of spending, CBO estimates.

The good news — if it can be called that — is that the huge deficit is running at $31 billion lower than last year at this time. Spending is higher (Medicaid is up 6 percent over last year, for example), but federal income tax receipts are running higher as well. CBO credited "higher wages and more employment" than last year for the increase in tax revenue. And borrowing 36 cents on the dollar is an improvement of sorts. For all of fiscal 2009, the deficit amounted to 40 cents of every dollar spent, and it was 37 cents in fiscal 2010.

Where the Money Comes From

Taxes make up the vast bulk of federal revenues, of course. Individual income-tax payers supplied 41.5 percent of all federal revenues in fiscal 2010, but Social Security and Medicare payroll taxes paid both by workers and their employers made up nearly as much. Combined with federal unemployment insurance taxes and a few others, these social insurance taxes made up 40 percent of revenues. The income tax on corporations brought in just under 9 percent, while excise taxes, on such things as gasoline and diesel fuel, alcoholic beverages and telecommunications services, brought in just over 3 percent.

We found a surprising bit of news buried in the "other" category, which made up 6.5 percent of all revenue.

Breakdown of "other" in 2010
(Percent of total revenues)
Federal Reserve	3.5%
Customs	1.2%
Misc	1.0%
Estate & Gift	0.9%
Total "Other"	6.5%

It turns out that in 2010, more than half of that category came from profits made by the Federal Reserve System, whose lending operations expanded dramatically to address the financial crisis that started in 2007. The Fed's payments to the Treasury made up 3.5 percent of all federal revenue in 2010 — nearly $76 billion. The rest of the "other" category is made up of customs duties (1.2 percent of all revenue), federal estate and gift taxes (0.9 percent), and miscellaneous sources.

Who Pays?

Who pays all of these taxes? The best information on that comes from the Congressional Budget Office, which has tracked the tax burden for many years. The most recent complete data cover 2007. CBO figured in that year more than half of all federal taxes was paid by the top 10 percent of income earners. They paid 55 percent of all federal taxes in 2007, CBO said.

That's a comprehensive figure, counting the income tax, payroll taxes, excise taxes and even the corporate income tax (borne by stockholders in the form of reduced dividends and appreciation). And perhaps surprisingly, the top 10 percent of earners pay a greater share of federal taxes now than they did before the Bush tax cuts, which Democrats constantly criticize as a giveaway to "the rich." The top 10 percent paid 50 percent of all federal taxes in 2001.

However, that comes in spite of lower tax rates at the top, not because of it. The reason the most affluent 10 percent pay a greater share of taxes is that they are getting a greater share of all income. Their share of all pre-tax income went from 37.5 percent in 2001 to 42 percent in 2007.

One figure that gets a lot of attention is the percentage of individuals and married couples who pay zero federal income taxes. Those figures come from the nonpartisan Tax Policy Center. The TPC's most recent report was released June 14, and it shows that this year 46.4 percent of "tax units" (individuals or married couples) had zero federal income tax liability. That's because of various exemptions and tax credits aimed at reducing the income-tax burden on lower-income workers and families with children. The figure is down from 2008 and 2009, when the percentage topped out at 50.8 percent.

But practically all workers (and their employers) pay Medicare taxes on every dollar of wages, and Social Security taxes on every dollar of wages up to $106,800. Consequently, those who pay no federal income or payroll taxes at all amount to only 18.1 percent this year, the Tax Policy Center figures.

There's plenty more where these figures came from. We could focus more closely on what was paid and earned by the top 1 percent, for example. Or we could zoom in to examine the role of rising medical and drug costs in pushing up spending for Medicare and Medicaid. We may well visit those subjects in future articles. For now, we've tried to give a quick, accurate and balanced look at the big picture: Both where Washington spends, and where its money comes from.

– by Brooks Jackson

Sources

Office of Management and Budget. "Fiscal 2012 Budget of the United States, Historical Tables: Table 1.3—Summary Of Receipts, Outlays, And Surpluses Or Deficits (−) In Current Dollars, Constant (Fy 2005) Dollars, And As Percentages Of Gdp: 1940–2016" 14 Feb 2011.

Congressional Budget Office. "CBO's Long-Term Budget Outlook: Supplemental Data" 22 Jun 2011.

U.S. Congress, Joint Committee on Taxation, "Estimated Budget Effects of the Revenue Provisions of H.R. 2264. (The Omnibus Budget Reconciliation Act of 1993) As Agreed to by the Conferees" 4 Aug 1993.

Office of Management and Budget. "Fiscal 2012 Budget of the United States, Historical Tables: Table 2.3—Receipts by Source as Percentages of GDP: 1934–2016 " 14 Feb 2011.

Office of Management and Budget. "Fiscal 2012 Budget of the United States, Historical Tables: Table 3.1—Outlays by Superfunction and Function: 1940–2016" 14 Feb 2011.

Connolly, Ceci and Mike Allen "Medicare Drug Benefit May Cost $1.2 Trillion; Estimate Dwarfs Bush's Original Price Tag" Washington Post. 9 Feb 2005.

Johnson, Allen "Bush signs $700 billion financial bailout bill" MSNBC.com. 3 Oct 2008.

The Associated Press, "Obama: Stimulus lets Americans claim destiny: President signs $787 billion program into law in Denver Tuesday" 17 Feb 2009.

Stolberg, Sheryl Gay and Robert Pear, "Obama Signs Health Care Overhaul Bill, With a Flourish" New York Times. 23 Mar 2010.

National Bureau of Economic Research, "US Business Cycle Expansions and Contractions" undated. Accessed 15 Jul 2011.

King, Jr., Neil and Scott Greenberg "Poll Shows Budget-Cuts Dilemma: Many Deem Big Cuts to Entitlements 'Unacceptable,' but Retirement and Means Testing Draw Support" Wall Street Journal 3 March 2011.

Cohen, Jon and Dan Balz, "Poll shows Americans oppose entitlement cuts to deal with debt problem," Washington Post. 20 Apr 2011.

U.S. Department of State, "Foreign Assistance Budget" undated. Accessed 11 Jul 2011.

U.S. Treasury, "$1.7 Billion Additional TARP Funds Returned to Taxpayers, Positive Return on TARP Bank Programs Reaches $10 Billion" press release. 5 Jul 2011.

Pro Publica, "The State of the Bailout" undated. Accessed 11 Jul 2011.

U.S. Government, Recovery.gov "Overview of Funding" undated. Accessed 11 Jul 2011.

Congressional Budget Office, "Monthly Budget Review" 8 Jul 2011.

Congressional Budget Office, "Monthly Budget Review" 5 Nov 2010.

Office of Management and Budget. "Fiscal 2012 Budget of the United States, Historical Tables: Table 2.5—Composition of "Other Receipts": 1940–2016" 14 Feb 2011.

Board of Governors of the Federal Reserve System, "What does it mean that the Federal Reserve is 'independent within the government'?" 17 Jun 2010.

Congressional Budget Office, "Average Federal Taxes by Income Group" Jun 2011.

Congressional Budget Office, "Shares of Federal Tax Liabilities for All Households, by Comprehensive Household Income Quintile, 1979-2007" Jun 2010.

Congressional Budget Office, "Pre-Tax Income Shares All Households, by Household Income Category, 1979-2007" Jun 2010.

Urban-Brookings Tax Policy Center, "T11-0173 – Tax Units with Zero or Negative Tax Liability, Current Law, 2004-2011" 14 Jun 2011.

July 16, 2011: And while we're discussing the debt ... Who Increased the Debt?

July 16, 2011: Americans Woefully, Maybe Even Criminally Ignorant, About the U.S. Budget and National Debt

The American public appears to be clamoring for a discussion about the size and scope of the federal government. But how can Washington have a serious debate when most Americans are ignorant of what is in the budget?

A rather depressing survey was recently released that attests to the failure of most Americans to understand the basics of the federal budget -- and why there is a soaring budget deficit. Respected Republican pollsters Ed Goeas and Nicholas Thompson reported that 63% of those surveyed believe the federal government spends more on defense and foreign aid than it does on Medicare and Social Security. (That's, well ... not just wrong, but depressingly, awfully and strategically wrong!.)

A similar majority believes that problems with the federal budget can be fixed by just eliminating "waste, fraud and abuse" -- and that 42% of every federal dollar is wasted. "Voters do not casually agree with these untruths -- at least 40% strongly agree," the pollsters said. One wonders where they get these ideas ... oh yes, Fox News.

This survey is broadly reflected by other polls, recently collected by analyst Bruce Bartlett. Among the gems he uncovered:

» A poll by WorldPublicOpinion.org found that, when people were asked what percentage of the federal budget goes to foreign aid, the average response was 27 percent. (The real number is about 1 percent.)

» A Gallup poll found 59% of people favor cuts to foreign aid, but a majority oppose cutting any other programs, including Social Security, Medicare and education.

» A Ipsos/Reuters poll found that 75% of people say foreign aid should be cut, but the only other programs that a majority of people favor cutting are the budgets of the Internal Revenue Service and the Securities and Exchange Commission. (That should work, without the SEC, Wall Street corruption would break new records. Part of the current problem were Bush-era cuts in SEC enforcement. Cut the IRS and the rich who already are cheating on their taxes would have a field day.)

The Facts

Take a good hard look at the chart to the right. Notice that foreign aid is so small in this chart that it doesn't even merit a mention. While it's about 1% of the overall budget, it amounts to less than 3% of the dollars allocated year after year by Congress, known as the discretionary budget. Perhaps some people lump together foreign aid with military spending, since a lot of military dollars go to wars overseas. Certainly the military is a big part of the budget -- about 25 percent -- but that is not foreign aid.

In fact, compared to other wealthy countries, the United States is an absolute miser on foreign aid. The best way to compare budgets is by looking at how much is spent as a percentage of the country's overall economy, or gross domestic product. In 2008, the United States was last among 22 countries, with 0.19 percent of GDP. The United Nations has set a target contribution rate of 0.7 percent, and the average country contribution was 0.45 percent. Some countries come close to donating 1% of GDP in foreign aid.

Nevertheless, House TeaParty/Republicans have targeted foreign aid for major cuts this year, with lawmakers even eliminating all funding for the U.S. Institute of Peace, which helps resolve bloody conflicts overseas. (One analyst has noted that the USIP's entire annual budget is equal to the cost of deploying one infantry platoon -- that's about 30 to 40 people -- to Afghanistan for a year.)

To some extent, politicians are to blame for some of the public confusion. The debate in recent weeks has focused on cuts in the discretionary part of the budget ... which is only about one-third of the government's $3.7 trillion budget ... and the tiny sliver of spending on foreign aid was a big part of that debate. For his part, President Obama, in his 2012 budget, highlighted cuts to relatively minor programs and avoided making proposals for reining in the cost of the big-ticket spending programs.

Look again at the chart. Much of the budget ... more than 40 percent ... is spent on social insurance, such as Social Security, Medicare and Medicaid. Projections show the spending in those programs will only increase, especially as more of the baby boom generation heads into retirement.

That's where the money is. Politicians should be honest about the real sacrifices that will be needed, by all Americans, to deal with the looming sacrifices necessary to bring down budget deficits. Cutting development aid in Africa really will not make much of a difference.

Interestingly, a recent study by the University of Maryland found that when people were actually given the facts about the budget, they could seriously understand and make choices about how to deal with the deficit.

In fact, the results upended some of the usual media stereotypes, with Democrats cutting spending more than Republicans ... and members of both parties agreeing to raise taxes. (Even after the survey, though, the respondents continued to have a misperception of foreign aid, with the median response being that it was about 15% of the budget and that it should be about 5 percent ... still much larger than the actual percentage).

No matter what rhetoric politicians use about the budget, people need to find out the facts in order to understand the costs, the trade-offs and the challenges ahead. Every year, when the president releases his budget, newspapers print pie charts showing how the money is spent. The budget is publicly available on the Web. There should be little excuse for not knowing the basic facts about how the U.S. government spends taxpayers' money

July 14, 2011: State Health Exchanges: New Rules Less Restrictive and More Permissive than Anticipated

Based on information and including excerpts from the Kaiser Family Foundation:

State flexibility took center stage in the proposed federal rules governing the state health exchanges ... the free-marketplaces where individuals and small businesses will be able to shop for private health insurance starting in 2014. Note: It's a free-market marketplace ... all plans offered through the exchange will be privately-managed, non-government health plans. Because of all the lies spread by opponents who have derisively labeled the Patient Protection and Affordable Care Act (PPACA) "Obamacare," it's important to repeat this ... free market, private health plans, not government ...The long-anticipated rules released Monday are less prescriptive than some consumer advocates desired, but grant states’ requests that they be given broad leeway to design and regulate the marketplaces, called exchanges.

The exchanges are a key element of the federal health care overhaul law. About 11.5 million people are expected to use them the first year -- growing to 27 million by 2018, when large employers can join ... to comparison shop for coverage. Consumers who qualify for assistance also will use the exchanges to receive federal subsidies or tax credits to purchase insurance or to gain access to Medicaid, the state-federal program for the poor. Under the proposed rules, the marketplaces will have to post information online about price and quality, offer specific standardized plans and set an annual open enrollment period.

More On Exchanges: Read: A Guide To Health Insurance Exchanges

Despite lobbying from consumer groups, insurers will be allowed to hold seats on exchange oversight boards and states will not be required to negotiate with plans on price or benefit offerings. Although there is a deadline of January 1, 2013 for states to show they will have an exchange up and running a year later, the proposal offers some wiggle room: States showing progress will be granted "conditional approval."

Still, states that can't – or won't – set up their own marketplaces will have the federal government step in and do it for them.

States that get ready later can still set up their own exchange – so long as they give the federal government a year’s notice, the rules say.

America's Health Insurance Plans, the major for-profit health insurance trade group and lobbying organization, appeared to have won some of what it was lobbying for. In a statement issued Monday, AHIP president and CEO Karen Ignagni welcomed the authority states would have, saying they "have the experience and local-market knowledge to ensure exchanges meet the needs of consumers in their state."

In the weeks leading up to the release of the regulations, the industry argued that insurer representatives should not be barred from memberships on boards overseeing exchanges, saying their expertise would be valuable. [Read: the foxes will now be guarding the henhouse ...] In an October letter to DHHS, America’s Health Insurance Plans urged regulators to give states the flexibility to take all qualified insurers – and not to require price negotiations or competitive bidding. Such restrictions could limit consumer choice, AHIP wrote.

The proposed rules grant states authority to follow either path -... allowing any qualified insurance plan to be sold on the exchange or setting tighter rules limiting insurer participation. But the rules also say competitive bidding could boost state efforts to provide "additional value and quality objectives."

Terry Gardiner, a lobbyist for Small Business Majority, a small business group that strongly supports the health law, cited another benefit to state flexibility: Reluctant states would be more willing to start exchanges because now they know they will have several options to meet the federal law’s requirements.

The National Federation of Independent Business, a critic of the law, said small businesses have an enormous stake in the viability of the exchanges. However, said Amanda Austin, director of federal policy for the group, "the devil's in the details. You can talk the talk about flexibility, but that doesn't mean the regs dictate it."

So far, about a dozen states have adopted legislation creating exchanges. Some red states, with reactionary governors, such as Florida where Rick Scott, the king of Medicare fraud, is now governor, have refused to implement any part of the law. Two states ... Massachusetts and Utah ... already have exchanges, and although they represent two ends of the spectrum of how the new rules say they can be run, were both established and directed by Republicans, not Democrats!

Massachusetts, for example, allows only those insurers who meet certain standards to participate; Utah’s accepts any insurers and sets few rules. While the Obama administration says there is room for such wide flexibility in design, the proposed rule could pose a problem for Utah because it says existing exchanges are OK only if the state’s insured rate is at least the national average after the law is implemented.

Federal officials estimate the national coverage rate in 2016 will be between 93 and 95 percent. The latest data show Utah at 86 percent, while Massachusetts is at 95 percent

"Today's market is broken, especially for small business owners and individuals who buy their own policies," said DHHS Secretary Kathleen Sebelius, who unveiled the proposed rules during a press event at a hardware store in Washington, D.C. "These rules will help guide states as they create new competitive insurance marketplaces."

Industry groups, consumer advocates and others have 75 days to weigh in with comments on the proposed rules. Final rules are expected later this year. Consumer groups on Monday urged states to take a tougher stand on exchange participation. "HHS today released a menu, not a recipe," US PIRG Policy Analyst Mike Russo said in a statement. "State leaders should take the flexibility they’ve been given to design a strong, negotiating exchange on behalf of consumers."

Additionally, the proposed rules say oversight boards cannot be dominated by health insurers or their sales agents. States, however, can adopt more stringent rules or create special conflict of interest statutes. Consumer advocates say such rules are needed.

"I would prefer to see them barred from the boards, but a number of states have already given insurers seats," says Timothy Jost, a professor at Washington and Lee University School of Law. "If they’re not barred, we need very strict rules to keep them from voting or participating in any issues that could financially affect their companies, which basically would be most issues."

Although exchanges will officially open January 1, 2014, consumers will be able to begin the process of signing up for coverage before then. The law calls for “open enrollment” periods, similar to those currently set up by employers who offer health insurance. Such enrollment periods are designed to encourage people to sign up for coverage right away, rather than waiting until they become ill. That’s important because in 2014, not only does the law require nearly all Americans to carry coverage, it also requires insurers to take all applicants, even those with medical conditions.

To give people time to understand the exchanges and make their choices, the initial open enrollment period will begin October 1, 2013 and run through February 28, 2014. In subsequent years, open enrollment will run from October 15 to December 7. People will be able to purchase insurance outside of open enrollment under specific circumstances, such as when adding a child by birth or adoption, or in cases where they lose employer coverage or coverage through a spouse.

"They have really given states about as much flexibility as they could legally do under the statute,” said Caroline Pearson, a senior manager at the Washington, D.C.-based health care consulting firm Avalere. “I was impressed by how few requirements there were." The initial enrollment and annual enrollment periods are similar to such periods for past programs, like the Medicare prescription drug benefit, she said. A lot of the key decisions in implementing the exchange will be made state by state. Pearson said, “A lot of that is going to happen on a state by state basis. That's where the rubber is going to hit the road.”

July 12, 2011: Hospitals, Health Systems and Payers Hesitant About Medicare ACO Participation: But Need to Prepar ... NOW!

Senior executives at hospitals, health systems and payer organizations are uncertain about their organization's position on participating in the Centers for Medicare and Medicaid Services' shared savings program (MSSP), commonly referred to as the Medicare ACO program, according to the findings from polls conducted by KPMG LLP, the U.S. audit, tax and advisory firm; EpsteinBeckerGreen; and JHD Group.

According to responses from healthcare leaders who participated in webcast polls conducted in April, 39% of the hospital and health system executives surveyed didn't know their organization's position on MSSP participation, while another 25% said their organization would be "watching and waiting" and would not meet a January 1, 2012 launch of the program under current proposed rules.

Jeanne's Aside Note: Many of these guys think the program will "go away," when the TeaParty/Republicans win big in 2012 ... which may very well happen but the new ACO program will have gone in to effect 13 months before Michelle Bachmann is sworn in as president. And even then, accountable care is building momentum ... and pay for performance is inevitably on track regardless of election prospects.

Fifteen percent said they needed to further build-out their accountable care organizations and expected to file later, while just 17% of hospital and health system respondents said they would be a first wave player and expect to file with CM² in time to launch their MSSP by January 1, 2012.

Payer Respondents 'Watch-and-Wait'

Among payer respondents, close to half said they didn't know what their organization's position on MSSP participation was, while 21% said they would be watching and waiting. Fifteen percent said they needed to further build out their accountable care organizations and expected to file later, and just 10 percent said they would be a first wave player and expected to file with CM² in time to implement by January 1.

"There are still important questions about how accountable care fits into an organization's current strategy and business model, along with competing investment decisions, such as those related to ICD-10 and upgrading information technology," said Brad Benton, KPMG Healthcare's national account leader. "There are also enterprise-wide business considerations related to adopting an ACO model which are complex to evaluate, but the transformation of the U.S. healthcare system is under way and all healthcare organizations need to actively consider the related business model implications."

Implications of ACO Business Model

The surveys found that healthcare leaders are looking to better understand the implications of an ACO business model. Sixty-two percent of hospital and health system respondents said their organizations have started to move forward in determining whether they will participate in an ACO, while just nine percent said their organizations are not interested in participating.

Additionally, 50%of hospital and health system respondents said their ACO orientation would include a commercial accountable care like arrangement. Among payer respondents, the percentage who said their ACO orientation would include a commercial accountable care like arrangement was even higher at 67 percent. Just nine percent of hospital and health system respondents and five percent of payer respondents said their orientation would be Medicare only.

Gain-Sharing Opportunities

"Hospitals, health systems and payers seem to like the notion of accountable care's gain-sharing opportunities from reduced utilization and improved quality," said Ed Giniat, KPMG's National Sector Leader – Healthcare & Pharmaceuticals. "But it's clear they are not jumping in with both feet."

An additional reason for the hesitation may be physician participation. In launching an ACO, physician buy-in was seen by hospital and health system respondents as the greatest challenge (36%), followed by cost (31%); staff and skill sets (22%); and management buy-in (11%). Payer respondents similarly cited the same challenges in the same order.

"Clinical leadership and integration will be a key ACO operational consideration," said Benton. "The challenges here are not only the typical recruiting and economic alignment questions, but a host of new and intense change management issues associated with driving both cost and quality in a new type of clinically integrated organization. It's a complex transformation challenge of the highest order."

Regarding length of time to create an ACO, a majority (66% of hospital and health system respondents said it will take at least a year or more. Many also felt that return on investment would be delayed, with 65% of hospital and health system respondents saying that it would take 25 months or more to see a return.

"There isn't a single definition of what an accountable care organization is, or what its components should include so there is some confusion," said Joe Kuehn, a partner in KPMG's Healthcare Advisory Practice. "The proposed MSSP program has added to the complexity of the discussions and analysis of what it will take to successfully operationalize a Medicare ACO and this may be causing many potential ACO market entrants to pause. However, organizations seem to want to be accountable care 'capable,' focusing on specific populations to bring about improved quality and health, at a reduced cost, and they are seeking ways to clinically integrate with their physicians and other potential partners."

Jeanne's Conclusion: If you haven't already jumped on the MSSP/ACO bandwagon, get started now! This version or one similar to it will become the model for health care financial management over the next 5-10 years, regardless of who's in the White House. Re-learning the process and mastering its ins and outs will be the challenge only successful hospitals, health care systems and payer organizations will meet. Just as Medicare's DRGs changed payments for ALL health care, including commercial payers, the MSSP/ACO model is the future for ALL payers, government and commercial ... with even more tweaks and nuances to come.

July 11, 2011: Rich People’s Taxes Have Little to Do with Job Creation

Conservative Arguments that Higher Income Taxes for the Wealthy Hurt Employment Don’t Hold Up to Scrutiny

FACT: Even though conservatives seem obsessed with the top income tax rate, overall economic growth has actually been stronger during periods of higher tax rates. Nonetheless conservatives seem willing to sacrifice the nation and its economy at the altar of Ayn Rand. But then maybe, just maybe they have some convoluted argument about how the tax rate for rich people is somehow incredibly important for creating jobs.

Cue the quotes:

Speaker John Boehner (R-OH): “What some are suggesting is that we take this money from people who would invest in our economy and create jobs and give it to the government. The fact is you can't tax the very people that we expect to invest in the economy and create jobs.”

Former Massachusetts Gov. Mitt Romney: “With over 20 million people who are unemployed or who have stopped looking for work, the last thing we should be doing is raising taxes on job-creators, entrepreneurs, and small business owners across America.”

John Boehner, again: “A tax hike would wreak havoc not only on our economy’s ability to create private-sector jobs, but also on our ability to tackle the national debt.”

Apparently, conservatives believe that a key driver of overall job growth is the tax rate that rich people pay on their last dollar of income. They argue that these very rich people are the ones who “create” the jobs and therefore taxing them at even slightly higher rates will make them less likely to invest, expand their businesses, and hire more people. That sounds plausible, but it turns out to be completely baseless.

In fact, they are just as wrong about this as they are about the relationship between marginal tax rates and overall economic growth. In the past 60 years, job growth has actually been greater in years when the top income tax rate was much higher than it is now.

For instance, in years when the top marginal rate was more than 90 percent, the average annual growth in total payroll employment was 2 percent. In years when the top marginal rate was 35 percent or less ... which it is now ... employment grew by an average of just 0.4 percent.

And there’s no cherry-picking here. Pick any threshold. When the marginal tax rate was 50 percent or above, annual employment growth averaged 2.3 percent, and when the rate was under 50, growth was half that.

In fact, if you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher. The top 10 years would share marginal tax rates at 50 percent or higher. The two worst years, on the other hand, were 2008 and 2009, when the top marginal tax rate was 35 percent. In the 13 years that the top marginal tax rate has been at its current level or lower, only one year even cracks the top 20 in overall job creation.

And neither are lower rates associated with faster overall economic growth ... just the opposite, in fact. And now we know that lower rates don’t coincide with higher job growth, either. So where is the evidence that the lower marginal tax rates spur job creation? It’s certainly not present in the past 60 years of American history.

It’s worth keeping this in mind the next time a conservative lawmaker claims that raising the rates for the wealthy would “destroy jobs.”

July 10, 2011: A Kaiser Family Foundation Guide To Health Insurance Exchanges

The Kaiser Family Foundation has updated its "Guide to Health Insurance Exchanges" ....

It seems like a simple idea: create new marketplaces, called "exchanges," where consumers can comparison shop for health insurance, sort of like shopping online for a hotel room or airline ticket.

But, like almost everything else connected with the health law, state-based insurance "exchanges" are embroiled in politics. Some Republican governors threatened to refuse to set up exchanges unless they received more flexibility over Medicaid, the state-federal health program for the poor. Lawmakers in other states said they didn’t want to implement any part of the federal health law. Some states, including California, Colorado and Maryland have adopted legislation to establish exchanges. Others are either still discussing such proposals – or are awaiting a governor’s signature. Meanwhile, efforts have either died or been rejected in at least a dozen states, including Louisiana, Arizona and Florida.

Still, some Republican officials are embracing them. And consumer advocates, disease groups and industry lobbyists are jockeying for influence over how the exchanges will be regulated.

If done well, proponents say, exchanges could make it easier to buy health insurance and possibly lead to lower prices because of increased competition. But, if designed poorly, experts warn, healthy people could avoid the exchanges, leaving them to sicker people with rising premiums.

Here are some common questions:

What is an exchange, as envisioned by the health law?

It's a marketplace where individuals and small employers will be able to shop for insurance coverage. They must be set up by Jan. 1, 2014. The exchanges will also direct people to Medicaid if they're eligible.

Will all states have exchanges?

States have the option of setting up their own exchanges, forming coalitions with other states to create regional exchanges - or opting out altogether. In that case, the federal government will run the exchanges for their residents.

Will anyone be allowed to buy from the exchanges?

No. Initially, exchanges will be open to individuals buying their own coverage and employees of firms with 100 or fewer workers (50 or fewer in some states). Most Americans will continue to get insurance through their jobs, not via the exchanges. The Congressional Budget Office estimates 8.9 million people will use the exchanges in 2014 and 23.4 million in 2018. Most will be people who are eligible for subsidies, which will average an estimated $4,600 per person in 2014. Undocumented immigrants will be barred from buying insurance on the exchanges.

What about federal workers?

Members of Congress and their staffs will be required to buy through exchanges if they want coverage from the federal government. Other federal employees won't be required to use an exchange.

Will exchanges be like travel websites or some existing health insurance sites?

In some ways. People will be able to compare policies sold by different companies. Purchasing insurance is complex and can be confusing, so information on the plan benefits will be standardized in an effort to make it easier to compare cost and quality. Plans will be divided into four different types, based on the level of benefits: bronze, silver, gold and platinum.

What will the coverage sold on the exchanges look like?

Plans will have to offer a set of "essential benefits." Those details, still being developed by the Obama administration, will include hospital, emergency, maternity, pediatric, drug, lab services and other care. Annual cost-sharing, or the amount consumers must fork over before insurance payments kick in, will be capped at the amounts allowed for health savings accounts -- currently, nearly $6,000 for individual policies and $12,000 for family plans.

How much will the policies cost?

The premiums will vary by type of plan and location. Insurers won't be able to charge more based on gender or health status. They will be able to charge older people up to three times more than younger ones.

Will the states negotiate premiums with the insurers?

The law doesn't require states to set or negotiate premiums. However, states may have some influence over prices. For example, states can decide whether to open exchanges to all insurers, or to limit the number. State insurance commissioners will be able to recommend whether specific insurers should be allowed to sell in the exchange, partly based on their patterns of rate increases.

What if I can't afford the premiums?

People who earn less than 133 percent of the federal poverty level, $14,484 this year, will qualify for Medicaid in all states, under the law. Above that, sliding scale subsidies for private insurance on the exchanges will be available for residents who earn up to 400 percent of the poverty level, about $43,560 this year. Most people will be required to have coverage of some sort beginning in 2014.

Will all insurers have to offer policies through the exchange?

No. Insurers won't be required to sell through the exchanges.

Will all state exchanges be the same?

No. States can design their exchanges differently, an issue that's sparking debate in statehouses nationwide. Some states may choose to set additional standards for insurers beyond the federal law. Another important issue: The makeup and power of the governing boards overseeing the exchanges. Some states, such as Maryland, are considering barring insurance industry and sales agents from their governing boards. Others, like North Carolina, have pending legislation that includes representatives from those groups on their governing boards.

July 8, 2011: Rest in Peace, Betty Ford: My Memories of a Day with Betty (and Sr. Irene Kraus, DC)

Today we learned of the passing in Palm Springs, California of former First Lady, Betty Ford, the outspoken wife of President Gerald R. Ford who overcame alcoholism and an addiction to pills and helped found one of the best-known rehabilitation centers in the nation. She was 93. But I remember Betty Ford best from a day in 1976 when I accompanied her on a flight aboard AF27000 (the same plane that is Air Force One, when the president is aboard, but just plain old AF27000, when he is not) from Andrews Air Force Base to Nashville, Tennessee. Mrs. Ford was to speak at the dedication of the then brand new St. Thomas Hospital in Nashville.

At the time I was Director of the Washington DC office for the Catholic Hospital Association, the trade group representing all of the nation's Catholic Church-sponsored health care facilities, hospitals, rehabilitation facilities, and nursing homes. St. Thomas Hospital had just finished construction on a new 510-bed hospital to replace an original nearly 80-year old main building. In 1976, the new facility was the model for new hospital construction, incorporating the very latest in health care advanced technology.

But my story begins several weeks before. In my D.C. office one bright, sunny spring day, I received a call from Sr. Irene Kraus, the Daughter of Charity who was the president and CEO of St. Thomas (and also former president and chair of the CHA Board of Trustees, and who became a few years later, the first woman to chair the Board of Trustees of the American Hospital Association ... in other words, a woman you don't say "no" to.) "Could I," asked Sr. Irene, "get the President of the United States to come to Nashville and speak at the dedication of her new hospital." Wiping the coffee I had just spilled down the front of a new blouse when I sat bolt upright upon hearing her request, I somehow managed a very weak, "I'll try." To which, she responded in her very best 5th Grade teaching-nun voice, "I am sure you will, dear."

Mustering the courage only a complete neophyte at calling the White House to talk to the President of the United States could amass, I actually managed to reach an "assistant to an assistant" to the President (for Political Affairs) and conveyed Sr. Irene's request, fully expecting my question to be politely, but firmly denied despite my audacity of hope in making the call. But wait, the man on the other end of the call seemed intrigued. I was asked for my name and number and told, they would get back to me. The next morning, I had to go up to Capitol Hill for a meeting with a couple of health care staff assistants and didn't get back to my office until around 10:00am. My office assistant looked nervous when I entered and sitting on my couch was a very serious-looking young man in dark suit. "Mr. O'Brien is from the Secret Service," she managed to squeak out, "he wants to talk with you."

It turned out, Mr. O'Brien was in my office as the first step in the "vetting" process to check me and the request from Sr. Irene, the process which (to make a longer story a little shorter) actually ended up with the full Assistant to the President for Political Affairs and I sitting down in the Executive Office Building next door to the White House to discuss the arrangements that had to be made and the conditions that would have to be met. 1976 was an election year, after all, and President Ford was already in a big pile of political trouble. His wife Betty Ford had made a speech in which she had supported the Roe v. Wade and Doe v Bolton decisions legalizing first trimester abortions in the United States. The Catholic Bishops were outraged and the "Catholic vote," was considered "in play." Some fence-mending was in order.

So O.K., the President would go to Nashville on the appointed day, hobnob with a couple of high-ranking Catholic prelates, mend some Tennessee political fences, give a speech and head back to Washington DC. One caveat, Sr. Irene and St. Thomas Hospital could not make any public announcements about the President attending the hospital's dedication until 72 hours before, and even then his coming could be canceled if over-riding national and/or international events required his attention or that he be elsewhere. Now that's a secret that's really hard to keep.

And so it was that about 5 days before the scheduled date, I received a call from the White House, very apologetically telling me that because of breaking events, the President would not be able to go to Nashville, but they could send the First Lady in his place. Ouch, talk about a consolation prize. How could I break this dreadful news to Sr. Irene? What could I tell the White House when she turned down the First Lady, who after-all was pro-abortion? My hand was shaking when I called Nashville.

"The President can't come, oh dear, that is too bad. Of course, tell Mrs. Ford she is most welcome and I am looking forward to meeting her." I was in shock, I never expected Sr. Irene to say yes, yet alone to be so magnanimous. And so it was, that on a sunny June day, that I arrived at the White House at 5:30am, cleared Secret Service scrutiny at the gates and entered the White House through the side basement and was escorted to a waiting room outside the kitchen. Around 6:00am, Betty Ford came in greeted me with a hug and sat me down in one of the kitchens with a cup of coffee while we waited for a White House limousine to be brought around to the side. We left around 6:30 in a fully-escorted motorcade up Suitland Avenue to Andrews Air Force Base, boarded AF27000, and were in Nashville 45 minutes later. All the while, Mrs. Ford chatted amiably with me about family, my children, but mostly about Sr. Irene and St. Thomas Hospital. Upon our reaching Nashville, Mrs. Ford was whisked away into the arms of a whole flock of Tennessee high-muckety-mucks, governor, senators, congresscritters, mayor and the like and that was the last of my close contact with her that day.

She gave her speech, hugged Sr. Irene, toured the hospital, and posed for photo-ops before returning to Washington before noon. I stayed in Nashville to participate in the days events, luncheon, celebrity shows (this was Nashville after all and the Country-Western stars of the day were all big contributors to the new hospital with rooms and facilities bearing their names), evening banquet ... and finally back to the convent, near midnight. (It was a practice in those days, when I visited a Catholic hospital, to house me back at the convent, sometimes in the room reserved for the bishop, should he stop by, sometimes in just a plain room similar to those used by the sisters themselves.) Stopping in the commons room, Sr. Irene poured herself a glass of sherry, took off her bonnet, kicked off her shoes, and put her feet up on a coffee table. Then she uttered one of the most profound statements I have ever heard and one that moved me deeply then and since. Here she was, the Chief Executive of a 500-bed hospital, employing over 2,000 people, dedicating a facility that cost at least $250 million to build, entertaining government officials and show business big-wigs, administering an annual budget of over $500 million, and she sighed: "I am not sure this is why I entered the convent 30 years ago!" No, it may not have been the reason, but it was through her work and dedication that so many people would benefit.

Today, I remember two gracious ladies, Mrs. Betty Ford, First Lady of the United States, and Sr. Irene Kraus (who died in 1998), may they both rest in God's embrace and with all the rewards they deserve.

July 7, 2011: Earl vs. the Tea Party (from the Comic Strip, "Pickles,' featuring Earl and his wife, Opal)

All week long Earl has been doing battle with the dandelions in his yard ... and losing. This morning's comic strip reminded of Obama vs. TeaParty/Republicans, just substitute President Obama for Earl.:

Pickles for 7/7/11:

And Pickles, revised:

July 7, 2011: Soak it to the Rich, TeaParty/Republican-Style: Means Test Social Security and Medicare

Going in to today's White House debt-ceiling discussions, TeaParty/Republicans remain adamant on one thing: absolutely no tax increases, not one, not any. And definitely not on the rich! If you close any of the wealthy American tax loopholes (yachts as second homes, corporate jet write-offs, hedge fund manager income offsets, etc., etc.), you must cut rich people's taxes to offset any revenue gains from their loophole losses.

But retiring Senatecritter Jon Kyl (T-AZ) ... the Minority Whip, and a top GOP debt ceiling negotiator ... has identified one distinct Republican plan for spreading the sacrifice to the upper classes. Granted it's a proposal that doesn't raise a whole lot of money, and one that Democrats reject broadly as a recipe for undermining popular entitlement programs: means-testing Social Security and Medicare.

"In the negotiations -- I'll give you one little glimmer of something," Kyl hinted. "The subject of means testing has come up. Republicans have actually proposed that. We have proposed that wealthier people should either pay more for benefits, or they should not get as much in the way of benefits of others. That's another way that they sacrifice. This is something that we have proposed, and the other side has generally not been willing to consider."

If Congress went this route ... and genuinely isolated further means testing to truly wealthy people ... the savings would be small relative to the multi-trillion dollar goal TeaParty/Republicans and Democrats are working toward. Still, that's about all Kyl's willing to give up.

It's also interesting to note that the TeaParty/GOP "Ryan-plan" to change Medicare to a "premium-support" program would have the direct opposite impact, with the middle class having to pay more to get the same benefits they had before under Medicare, while the rich benefited from the cutbacks without feeling the same pain.

Nonetheless, the Democrat's current facial opposition to the means-testing idea raises several questions:

Welfarizing Medicare (and Social Security, too)

Now welfare-like provisions have been creeping into Medicare and Social Security for some time. We have begun taxing the Social Security benefits of retirees with retirement incomes greater than $35,000 a year ... in effect, taking back from the "wealthy" some of their "entitlement" to the full benefits of that program. Similarly, under Medicare, by subjecting every dollar of income to the Medicare tax with no increase in benefits, the wealthier have been paying more for their coverage for the past several years and effectively subsidizing poorer people who pay less. In 2003, with the passage of the Medicare Modernization Act (the law that gave us Medicare Part D, prescription drugs) we began the most direct means-testing of Medicare, increasing the monthly Medicare Part B premium for those with incomes over $80,000 a year. At the time Democrats were unalterably opposed to this, holding fast to their egalitarian views. The prescription drug benefit provisions in the 2003 Medicare Modernization Act (the one passed by Republicans without a single Democratic vote. in the middle of the night, using a little-known ... and now derided parliamentary tactic known as "reconciliation," to get around a planned Democratic filibuster) got all the attention but other changes to Medicare may end up having far more long term impact... mostly specifically the establishment of new Medicare Part C, the 2003 version of "premium support." For the first time, we tiered Medicare directly, with wealthier individuals paying higher monthly premiums, ranging from 20% to 100% more, on a rising scale.

Democrats went postal at the time and the new law was passed without a single Democratic vote. The Democrats fought the "welfarization" of Medicare, fearing that in the long term, as merely another "welfare" program, the entitlement nature of the program would change forever, and with it, as the tides of time and change moved, would public support for the program.

But I am not the only one getting smarter in my old age, by 2010, in the Patient Protection and Affordable Care Act, Democrats had come virtually full circle on the means-testing issue and almost eagerly added a means test of their own, extending the GOP-driven rising scale of premiums for Medicare Part B to Medicare Part D as part of their financing proposal for PPACA. Will Medicare Part A be next?

As an interesting side fact, a survey showed that by 2008, that Democrats favored means-testing Medicare at a statistically higher rate than Republicans. You can draw your own conclusions about that, but egalitarian attitudes toward Medicare (and, presumably Social Security), would be appear to have died a slow and apparently not too painful Democratic mind-set death.

Changing the Social Contract

The egalitarian philosophy that was so much a part of Medicare in the beginning ... that all Americans are entitled to receive Medicare simply because they are Americans ... is breaking down. Not that there's anything wrong with that. Social contracts can be changed as long as the American electorate understands and agrees to the change. But therein lies a very irritating rub, the Social Contract, is being changed secretly, incrementally without the understanding "advice and consent" of the people.

The idea of "privatizing" Medicare as pushed by today's TeaParty/GOPers should be a non-starter. They would essentially gut the entire program (albeit, as explained me by one of the "pool people" in my senior 55+ community in Arizona, "I know it would ultimately destroy Medicare, but it'll take them years to implement. By then I will be gone and won't worry about it.) She is an enthusiastic TeaParty/GOPer. But we do need to look at ways where means-testing may benefit not just the low to middle income beneficiaries of today, but those of tomorrow as well. We do need to couple any such mans-testing with major payment reforms and delivery changes. Gosh for an old lady, I have a lot of work to do.

July 7, 2011: Duh ???

July 6, 2011: Are the States Spending More on Medicaid Than They Do on Education?

True but False!?@%!

“Cash-strapped states are also feeling the burden of the Medicaid entitlement. The program consumes nearly 22 percent of states’ budgets today, and things are about to get a whole lot worse.”

— Sen. Orrin Hatch (R-Utah), June 23, 2011, at a hearing of the Senate Finance Committee

“Medicaid is the lion’s share of that spending burden as it now consumes about 22 percent of state budgets now and will consume $4.6 trillion of Washington’s budget over the next ten years.”

— Former Kentucky governor Ernest Lee Fletcher (R), June 23, 2011, at the same hearing

“Across the country, governors are concerned about the burgeoning cost of Medicaid, which in fiscal 2010 consumed nearly 22 percent of state budgets, according the National Association of State Budget Officers. That’s larger than what states spent on K-12 public schools.”

— Washington Post front page article, June 14, 2011

The assertion that Medicaid is 22% of state spending, and thus now exceeds education spending, comes from an annual survey of the National Association of State Budget Officers (NASBO). But if you dig into the report ... if you just go to page one ... you will see that this number includes the federal contribution, in what is known as “total funds.”

If you want to see what states themselves are spending on Medicaid ... “general funds” ... you have to use another set of statistics.

As NASBO says on page one, “For estimated fiscal 2010, components of general fund spending are elementary and secondary education, 35.7 percent; Medicaid, 15.4 percent; higher education, 12.1 percent; corrections, 7.2 percent; public assistance, 1.9 percent; transportation, 0.8 percent; and all other expenditures, 27.0 percent.”

In other words, without the federal dollars included, Medicaid falls to second place, far behind education. It turns out that on average, states spend 15.4 percent of their funds on Medicaid — not 22 percent.

Brian Sigritz, NASBO’s director of state fiscal studies, said, “You are correct that there are several different ways of looking at Medicaid spending that you can use. If you consider just general funds, K-12 easily remains the largest component of general fund spending, as it historically has been.”

Indeed, when you look at NASBO’s historical data, it becomes clear that Medicaid spending, as a proportion of general funds, has remained relatively consistent since 1995 ... about 15 percent ... in contrast to the popular image of being a drain on state budgets.

Sigritz said that the two figures provide a different picture of state spending. “General funds gives you a sense of spending deriving from state revenue, while total funds gives you a sense of total state expenditures,” he said. “Typically when you discuss overall state budgets you examine the various funding sources that go into them including general funds, other state funds, bonds, and federal funds.”

The Office of the Actuary for Medicare and Medicaid makes this distinction. The 2010 Actuarial Report for Medicaid notes the broad figure, but then takes pains to add: “This amount, however, includes all Federal contributions to State Medicaid spending, as well as spending from State general revenue funds and other State funds (which for Medicaid consists of provider taxes, fees, donations, assessments, and local funds).” The report concludes: “When only State general revenues are considered, however, Medicaid spending constitutes an estimated 16.2 percent of expenditures in 2009, placing it well behind education.”

July 6, 2011: Whatever Happened to "Repeal and Replace" the Patient Protection and Affordable Care Act?

When they took control of the House in January, TeaParty/Republicans could barely stop talking about their plans to “repeal and replace” the health care reform law. Now, six months later, they are virtually mum about “repeal” and almost deadly silent about “replace.”

House TeaParty/Republicans haven’t held a floor vote on a bill or amendment trying to repeal, defund or even nibble at the edges of the law in the last six weeks, after making dozens of attempts earlier this year. The tsunami of committee hearings to attack and pick apart the law’s policies … held back-to-back-to-back earlier this year … has slowed to a trickle.

And not a single element of their “replace” agenda has gotten a House floor vote.

For all of their promises to do everything they can to stop the law, the only thing Republicans have been able to get to President Barack Obama’s desk is the bill to eliminate the requirement that businesses file 1099 tax reporting requirements.

So what happened?

Privately, Republicans cite a combination of factors as to why the health activity has slowed down. Other issues have come up, including the debt limit and military activity in Libya. Some question whether holding a vote now on the law’s most unpopular provision … the individual mandate (an original GOP idea, BTW, back during the Hillarycare debate in the 1990’s and a key element in “Romneycare”) … could undermine the various lawsuits against it (not that these lawsuits need any more “undermining” following a conservative judge’s opinion upholding the mandate last week in the 6^th Circuit Court of Appeals).

And then there is the “Paul Ryan factor.” Robert Blendon, a professor of health policy and political analysis at the Harvard School of Public Health, says House Republicans’ interest in the health law waned just as the public began to push back on Ryan’s TeaParty/GOP budget … which included substantial changes to Medicare.

“The problem is they gave a health issue to the Democrats,” Blendon said. Now, “the issue for Republicans is to shift away from this Medicare debate and to try to focus back on the health bill, which for their constituencies, they were doing fine on.”

House Republicans began the year with a high-profile vote to repeal the law and followed up with a dozen more votes to repeal or defund pieces of it. But the last repeal vote on the House floor was in late May.

Last month, Eric Cantor, the TeaParty/GOP House Majority Leader, released a summer legislative floor schedule that didn’t even mention health care or the reform law. The House still hasn’t voted on repeal of some of the law’s largest or most unpopular provisions, such as the employer requirements to provide insurance or the requirement that nearly all Americans buy insurance.

Meanwhile, the “replace” agenda never really went anywhere.

Boehner and Cantor in January both said they didn’t want to put an “artificial deadline” on the latter half of their “repeal and replace” campaign promise. But six months later, none of the key items on the Republicans’ replace agenda … such as medical liability reform and selling insurance across state lines … have gotten House floor votes.

The only real movement has been on tort reform. The Energy and Commerce and Judiciary committees have passed a medical liability reform bill that’s waiting for House floor action.

The GOP is also struggling with a political disadvantage because of the Medicare plan. Last week, Democrats were sent back to their districts with a leadership directive to talk about their attempts to save Medicare from the Republican budget.

“Strategically, [Republicans] had a health issue they were doing reasonably well on,” Harvard’s Blendon said of the GOP. “They created another one that, unless it changes, it’s going to be a real problem for them.”

The Republicans are trying to turn the situation around. Next week, the Energy and Commerce and Budget committees are expected to hold high-profile hearings on an unpopular provision of the law: the Independent Payment Advisory Board, a panel tasked with controlling Medicare costs. (The IPAB is actually one of the potentially "real" mechanism in PPACA that can save health care costs and hold down future increases, but as TeaParty/Republicans have sold their souls to private insurance and for profit provider interests, they will focus on repealing what is the most promising provisions in the law.)

In the fall, lawmakers will have to do something to prevent a 30% cut in doctors’ pay for treating Medicare patients that is slated to go into effect on January 1. Republicans consider the must-pass bill a key opportunity to repeal part of the health law. (That should be interesting. Another down-to-the-deadline, hold-the-feet-to-the-fire, no-holds-barred, fight-to-the-death, legislative showdown … as if we haven’t had enough of those already. If the Medicare physician cut is not immediately canceled and some of it goes into effect, will TeaParty/Republicans be able to blame President Obama and Democrats for not approving the repeal of PPACA?)

Republicans are also insisting that the current negotiations on the debt include efforts to control the costs of Medicare, Medicaid and perhaps full repeal of the outdated Medicare payment formula.

July 5, 2011: For Profit Insurers Enter the Exam Room As Insurers are Buying Doctor Groups and Practices

The for-profit private health insurance industry has plans to take over ... and remake ... the practice of medicine in the United States ... and we're letting them do it!

From today’s Kaiser Daily Health News: (with side comments from Jeanne) …

Even if UnitedHealth Group isn't your insurance company, there’s a good chance it touches you in some way. The $100 billion behemoth sells technology to hospitals and other insurers, distributes drugs, manages clinical trials and offers continuing medical education, among other things, through the growing web of firms it owns.

[Jeanne: Go ahead, click on this hyperlink and be amazed as I was of the reach of UnitedHealthcare ... everything from other brand insurers, including AmeriChoice, Golden Rule, PacifiCare/Secure Horizons, Oxford Health and several others; to pharmaceutical services, including CareMedic, Ingenix and i3 Innovus; to hospice care (Evercare); to receivables management companies; claims processing service bureaus and financial management and practice consulting firms ... and not just in the United States but all across the globe. And all designed to make a profit and, wherever possible curtail benefits and limit coverage ... and TeaParty/Republicans are telling us how wonderful this will be for the future and are trying to replace Medicare with their own private Vouchercare using companies like UnitedHealthcare. <sigh> And American are buying this bull-hockey. Am I the only one offended by the UnitedHealthcare spot ads on public television extolling the wonders of this company ... a company whose former CEO, William M. McGuireº, was forced to admit stock manipulation and fraud by the Securities and Exchange Commission in 2007 and pay back $468 million (with several related lega; actions still pending)... a company which in 2009 entered into a $50 million settlement with the New York State Attorney general's office over price fixing ... a company which settled a law suit brought by the American Medical Association and several state medical associations, paying out $350 million for having underpaid hospitals and physicians for years? Oh yes, that company! The TeaParty/Republican model for the future of U.S. health care.]

[ºNote: William M. McGuire's "golden parachute" upon leaving the company was estimated at $1.1 BILLION over 10 years, prompting the late Elizabeth Edwards to comment that $1 out of every $700 that UnitedHealthcare collected in premiums was going to pay Bill McQuire... but who's counting? McGuire's annual compensation while United's CEO ranged from $59 million to $110 million and he was listed on the Forbes 400 as one of the world's richest men. No wonder private health insurance premiums have been going up at double digit rates for years.]

Now, that touch could get a lot more personal. United's health services wing is quietly taking control of doctors who treat patients covered by United plans in several areas of the country -- buying medical groups and launching physician management companies, for example.

[Jeanne: Great, indirect manipulation wasn't enough for them, now they want full management control!]

It's the latest sign that the barrier between companies that provide health coverage and those that actually provide care to patients is crumbling.

[Jeanne: At least it's not a government bureaucrat ... who isn't rewarded with bonuses for cutting costs ... wait, wait .. it's a private insurer bureaucrat who gets paid for denying care. That's better, isn't it?]

Other large insurers, including Humana and WellPoint, have announced deals involving doctors in recent months, part of a strategy to curb rising health costs that could cut into profits and to weather new challenges to their business arising from the federal health law. But United is the biggest insurer by revenue, making the trend much more significant.

Many patients insured by these companies are going to see much tighter management of their care.

[Jeanne: Whoa, at least Kaiser seems to understand the impact of this private take-over of health care by for-profit insurers.]

"Health care costs are still going to rise," said Wayne DeVeydt, chief financial officer of WellPoint, which entered the business of running clinics in June with the announcement that it would acquire CareMore, a health plan operator based near Los Angeles that owns 26 clinics. "But the only way to stem those costs in the long term is to manage care on the front end."

That means enlisting doctors. Their orders drive most health care spending, including the wasteful share: treating heart patients with expensive stents when cheaper drugs might work, or overusing high-tech imaging devices, for example. By managing doctors directly, insurers believe they can reshape the practice of medicine - and protect their profits.

For instance, CIGNA, another large insurer, saves 9 percent on patients treated by doctors in a Phoenix medical group it controls, said Stephanie Gorman, president of CIGNA Arizona. CIGNA has expanded the group over the last 18 months in response to the health law, and it now serves patients at 32 locations.

“The doctors, at the end of the day, control the patients and currently they’re financially incentivized to do more tests, more procedures," said Chris Rigg, a Wall Street analyst for Susquehanna Financial Group. "But, if they're employed by a managed care company, they're financially incentivized" to do less.

[Jeanne: Wait a minute! That's exactly what the Patient Protection and Affordable Care Act ("Obamacare" for you troglodytes) is projected to do through Accountable Care Organizations and changes in payments for performance and quality. But TeaParty/Republicans have attacked that as a "government takeover" of health care. Wrong! Under PPACA, the providers themselves will form the ACOs and manage the care. Under UnitedHealthcare and other private insurers, it will be the profit-seeking private insurer which will drive the level of care to be provided ... not the provider itself.]

That thought unnerves consumer advocate Anthony Wright of Health Access in Sacramento, Calif., who worries profit pressure could affect care decisions. But Wright also said there may be upsides to more tightly managed care: "No patient wants to get more procedures than they actually need."

[Jeanne: Right on, Mr. Wright! No patient wants unnecessary services ... but who should make that necessity determination? The provider working with the patient? Or the for-profit insurer seeking to maximize its return on investment?]

Insurers Respond To Cost Pressures

Insurance companies are pursuing doctors in response to increasing financial pressure. The health law cuts government spending on private Medicare plans that many insurers offer, imposes rules that could limit profits, and increases scrutiny of their rates. Adding to the pressure, the insurers’ customers are tired of rising prices.

Employers and other customers "are saying, I want more value for the dollars I spend in health care," said Dawn Owens, chief executive officer of OptumHealth, United's health services subsidiary. But, "there's also a realization that the delivery system isn't ready for that kind of change. That's where we come in."

The tools needed to control costs and improve care are things insurers have “invested in over the years," she said. "The provider community doesn't have those tools."

[Jeanne: Duh? Not ready for change? Hey folks, private for-profit insurers have been raising their premiums at double digit rates for years and while Medicare covers a large portion of the nation, around 45 million seniors and disabled, it pales in comparison to UnitedHealthcare's 110 million covered lives. Yet it was Medicare who started the change to DRG's in the early 1980's, not the private insurance industry; it was Medicare who has championed through demonstration project funding a wide variety of "comparative effectiveness" studies and "tools", not the private insurance industry (which now says it will belatedly use these government "tools" to control costs ... while pocketing much of the savings as profits) ... and now it is PPACA that seems to finally lit the fire for accountable care and pay for performance ... not the private insurance industry. Not ready? It is now!]

United's strategy has stirred little controversy, in part because few are aware of it. But word is getting out among potential competitors.

Dr. Amir Bacchus, chief medical officer of HealthCare Partners of Nevada, a large physician group, said he learned about United’s plans in a phone call from a United recruiter. He was asked if he'd be interested in joining the company to manage 500 doctors at a network of clinics United planned to build around the country, one part of its physician strategy.

By adding physicians in some places, United "can definitely control the health system" in those areas, said Bacchus, who declined United's overture. "It's a threat for us," he added. "They are going to compete directly with our business model."

Gail Wilensky, a United board member and health official in President George H.W. Bush's administration, said the insurer doesn't seek to control every doctor who sees patients enrolled in its health plans. Typically, insurers contract with doctors to care for their policyholders. She also cautioned the strategy has not yet proven its success and is in its early stages.

"It's just trying many different ways to see what appeals to the American public and what adds value," she said. "Whether it will actually mark the trend of the future, I don't know."

Rigg, the Wall Street analyst, said that the announced deals were "not needle movers yet" for investors. But four of the five largest health insurers have increased physician holdings in the last year. In addition to the moves by WellPoint and CIGNA, Humana acquired the urgent care chain Concentra in December. Aetna, the third largest insurer, will not be joining the trend, its chief executive, Mark Bertolini, said in an April interview.

[Jeanne: Oh yes, for sure ... the test should always be whether Wall Street approves. If they can't find a way to make a gazillion bucks out of it, it's no good.]

Nonprofit Highmark, which runs BlueCross BlueShield plans in Pennsylvania and West Virginia, also struck a deal last week laying the groundwork for it to acquire West Penn Allegheny Health System, a Pittsburgh-based chain of six hospitals. Other regional insurers, especially those specializing in private Medicare plans, such as Peoples Health in Louisiana, have bought or developed clinics over the last year.

Growing Appetite For Doctor Groups

United's OptumHealth subsidiary, meanwhile, is buying doctors' groups, building management companies to organize physicians, fostering new partnerships with medical groups and hiring doctors at a group it already controls.

Optum brings technology, data and population health skills to physician groups it acquires, said Owens, the CEO: "We help them modernize the way medicine is actually practiced." Some of the deals were initiated by doctors’ groups looking for help, she added.

Owens said Optum's deals will serve all the players in the health system, including rival health plans whose policyholders may use the same physicians.

[Jeanne: "modernize the way medicine is actually practiced" ... yes, please modernize ... but don't take over the helm in the name of maximizing profits. 1996's HIPAA legislation was to be the forerunner of much of this, In 2003, the pre-TeaParty Republican party passed the Medicare Modernization Act (better known for establishing the Part D drug program). The MMA had lots of buried secrets, not the least of which was new funding for the little federal Agency for Health Research and Quality and a plan to begin several demonstration projects with a goal of better identifying …

the appropriate use of best practice guidelines by providers and services by beneficiaries”

the “reduced scientific uncertainty” in the delivery of care through the examination of variations in the utilization and *allocation of services, and outcomes measurement and research”

achieving the “*efficient allocation of resources”

“the financial effects on the health care marketplace of altering the incentives for care delivery and changing the *allocation of resources”

The deep, dark Machiavellian secret of HIPAA was that it was designed to facilitate the collection of data and thus the ability of planners and payers to ration health care intelligently.

(* Trust me on this, I’m a lawyer, “allocation of resources” = “rationing”)]

Optum declined to discuss details, but documents show the company cut deals in California, Arizona, Nevada and other markets. In Orange County, Calif., for example, Optum’s Collaborative Care unit acquired the management arm of AppleCare Medical Group and Memorial Healthcare IPA.

In Phoenix, Collaborative Care launched Lifeprint, a physician network that serves United’s private Medicare plans. And in Texas, Collaborative Care acquired an 80 percent stake in WellMed Medical Management, which runs a medical group with clinics in Texas and Florida, according to filings with state insurance commissioners.

United has also ramped up hiring at a Las Vegas medical group it already owned as the result of its 2008 acquisition of health plan operator Sierra Health Services.

In some cases, the company obscured its role. For instance, another Collaborative Care business, NextDoor Health, which is partnering with a local doctors’ group to open retail clinics at Wal-Mart stores in Texas and other states, describes itself on its website only as "a privately held LLC based in Minneapolis." United is based just outside of Minneapolis.

Paul DeMuro, a Calif.-based Latham & Watkins attorney who represents physician practices, said one reason companies keep physician deals quiet is that, as is the case with real estate developers, news of a big project can inflate prices. The prices for doctors' practices are already "absurd," he said.

Insurers managed physician practices before, especially in the 1990s. But customers rejected those tightly managed plans. Some local plans, and larger insurers such as Kaiser Permanente, continue to employ practicing doctors. But the biggest national insurers shed such arrangements.

One reason the strategy makes sense now is that the health law could reward such arrangements. The law envisions so-called accountable care organizations, groups of doctors and hospitals that take responsibility for patients and the financial risk that comes with them. If they cut spending, they would keep some of the savings.

While hospitals are widely seen as the natural leaders of ACOs, United's strategy positions it to lead the new systems, too, a company executive acknowledged.

[Jeanne: There it is folks, the for-profit health insurance industry, by it's own admission wants to take over control of the practice of medicine. I hope all physicians opposing PPACA might start to understand this.]

Collaborative Care, the United subsidiary, employs "care givers that take risk," said Todd Cozzens, the CEO of Optum's Accountable Care Solutions, another subsidiary. "In markets where they're strong, they're definitely going to set up ACOs."

Some observers watching the developments say the health law, which in part was sold as a way to rein in insurers, has had the opposite result, opening the door for the companies to take control of even more parts of the health system.

"There's a gigantic Murphy's law emerging here," said Ian Morrison, a California-based health care consultant who does some work for United, as well as most of its competitors. "The very people who were the demons in all of this, that the public can't stand" - managed-care firms - "are the big winners."

[Jeanne: Sadly folks, that's exactly what will happen unless leaders in the health care provider community ... hospitals and physicians ... start to recognize the insidiousness of the for-profit-driven private health insurance industry. Nothing but bad can happen if they continue to take the nation down the path they have started us on.

July 4, 2011: Happy Unindependence Day!

http://www.youtube.com/watch?feature=player_embedded&v=LahO5eD8YAI

July 4, 2011: Pretend Commodities on a Pretend Farm Equals $20 Billion... That's Right $20B for a Make Believe Farm!

Is this what America has come to in the way of commerce? We sell games that sell virtual commodities or items? Shouldn't we be creating and selling real things, instead of virtual things? Why do virtual things get higher stock valuations than real things? Oh wait... I know ... the same Wall Street securities types who crashed the nation's economy selling their junk bonds and high risk, nearly worthless mortgage securities ... these same guys now want to sell us stock in a virtual farm.

Well, why not, Americans really are that stupid. And besides, as hedge fund managers and too-big-to-fail Wall Street bankers, we'll bail them out ... and lower their taxes at the same time. Yeah, that'll create lots of new jobs ... for virtual game programmers in Banglahore, India.

http://online.wsj.com/article/SB10001424052702304584004576419813801652724.html?mod=WSJ_myyahoo_module

Zynga Inc., a company that sells imaginary tractors and other make-believe goods in online games, plans to raise some very real money from public investors. After weeks of speculation, the San Francisco start-up ... maker of "FarmVille," "CityVille" and other games played on Facebook's website ... on Friday filed for an initial public offering in a deal that could value it as high as $20 billion, said people familiar with the matter. Zynga is the latest in a wave of new Web companies ... a list that includes LinkedIn Corp., Pandora Media Inc. and soon-to-go-public Groupon Inc. ... seeking to exploit the appetite of public investors for fast-growing Internet brand names. Unlike those companies, though, many of which are unprofitable or have warned that they will bleed red ink as they continue to spend to grow, the highly anticipated filing from four-year-old Zynga showed it is making money. Zynga reported net income of $91 million on revenue of $597 million last year, up from a $53 million loss on revenue of $121 million in 2009.

Zynga's filing revealed its revenue comes almost entirely from the sale of virtual goods within its otherwise free games, a business that's largely alien to U.S. investors but is common among games companies in China and South Korea. There is a whimsical array of goods that can be purchased within Zynga's games using real money, from tractors in FarmVille that help make players' virtual fields more productive, to "energy" in CityVille that allows players to build structures and perform other activities.

Isn't this great, we pay real money to a company that uses programmers in third-world countries, to buy make-believe farm equipment, and now we will invest more real money into a stock being sold by hyperactive Wall Street gurus, who in turn will package these investments in hedge funds earning even more profits for these managers to buy European villas, Japanese luxury cars, Swiss watches and Russian caviar. All the while the TeaParty/Republicans want to cut their taxes even more. Makes sense to me... NOT!

July 3, 2011: Granddaughter Hannah's Sunday Cartoon:

July 2, 2011: Brainwashing America

As we go into our nation's Independence Day weekend and the celebration of our democratic freedoms, we need to understand just how threatened those freedoms are by those masquerading as patriots, but whose agenda is to undermine wherever possible. the traditions, customs and practices that have made this country so great. Fox News, (which ironically enough on this Independence-from-England weekend, is owned by a Brit), has its own agenda that has succeeded is masking its tacit goal of replacing a government ... "of the people, by the people and for the people" ... with an oligarchy of the rich and powerful, a corporate takeover of the middle class and destruction of any one who opposes that new paradigm.

A wonderful web site, Truth-Out.org has posted an exposé on just how Fox goes about brainwashing America. It's "14 Ways Fox is Brainwashing America" a must read: http://www.truth-out.org/14-propaganda-techniques-fox-news-uses-brainwash-americans/1309612678

There is nothing more sacred to the maintenance of democracy than a free press. Access to comprehensive, accurate and quality information is essential to the manifestation of Socratic citizenship - the society characterized by a civically engaged, well-informed and socially invested populace. Thus, to the degree that access to quality information is willfully or unintentionally obstructed, democracy itself is degraded. The truth-out.org posting tells us just how Fox has set about and succeeded in doing this:

1. Panic Mongering.

2. Character Assassination/Ad Hominem.

3. Projection/Flipping.

4. Rewriting History.

5. Scapegoating/Othering.

6. Conflating Violence With Power and Opposition to Violence With Weakness.

7. Bullying.

8. Confusion.

9. Populism.

10. Invoking the Christian God.

11. Saturation.

12. Disparaging Education.

13. Guilt by Association.

14. Diversion.

July 2, 2011: Since 2009, 88 Percent Of Income Growth Went To Corporate Profits, Just One Percent Went To Wages

After the longest recession since WWII, many Americans are still struggling while S&P 500 corporations are sitting on $800 billion in cash and making massive profits. Now, economists from Northeastern University have released a study that finds our sluggish economic recovery has almost solely benefited corporations. According to the study:

“Between the second quarter of 2009 and the fourth quarter of 2010, real national income in the U.S. increased by $528 billion. Pre-tax corporate profits by themselves had increased by $464 billion while aggregate real wages and salaries rose by only $7 billion or only .1%. Over this six quarter period, corporate profits captured 88% of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1% of the growth in real national income. …The absence of any positive share of national income growth due to wages and salaries received by American workers during the current economic recovery is historically unprecedented.”

The New York Times adds, “According to the Bureau of Labor Statistics, average real hourly earnings for all employees actually declined by 1.1 percent from June 2009, when the recovery began, to May 2011, the month for which the most recent earnings numbers are available.”

So as average wages fall, and nearly 14 million people remain unemployed, America’s economic recovery has almost entirely benefited corporations. This development adds another chapter to the decline of the middle class, whose incomes are shrinking and wages are stagnating. Last year, top executives’ salaries increased 27 percent, while workers’ salaries increased only 2 percent. At the moment, income inequality in America is the worst it’s been since the 1920s, as the richest 1 percent make nearly 25 percent of the country’s income.

St. Ronald of Reagan promised us that by rewarding the wealthy with lower taxes. fewer regulations on their businesses and financial maneuverings, and allowing them to rape and pillage our natural resources ... that we would all benefit from the growing Hobbesian pie ... this new great wealth would "trickle down" through our entire economy. Yes indeed, an Ayn Rand Nirvanah!

One percent is indeed a "trickle," and given inflation and the cost of bailing out all of these newly de-regulated banks and financial markets after their losses in shady investments, all the while suffering the slings and arrows of toxic oil spills and deforested acres ... it hardly seems worth the price we've paid.

CEOs have discovered that by lowering wages ... by outsourcing jobs to Bangladesh and elsewhere in the 3rd world, they make greater profits ... and earn outrageously higher bonuses ... which in turn are taxed at lower and lower rates ... encouraging them to "offshore" even more jobs in what has become a vicious cycle. And we Americans, dumb and docile as we are, continue to buy into the mantra, "lower taxes mean more jobs." They do mean more jobs ... in Bangladesh and elsewhere.

July 1, 2011: Health: Spending Continues to Outpace Economic Growth in Most OECD Countries

The U.S. is not alone in see its spending on health care growing faster than the nation's total economic growth. Health spending continues to rise faster than economic growth in most OECD countries, maintaining a trend observed since the 1970s. Health spending in the 34 OECD countries reached 9.5% of GDP on average in 2009, the most recent year for which figures are available, up from 8.8% in 2008, according to OECD Health Data 2011. But health spending as a share of GDP is likely to stabilize or fall slightly in 2011. This is due to improving economic growth and lower health spending as governments seek to rein in budget deficits.

While governments must do more to get better value for money from health care spending, they must also continue pursuing their long-term goals of having more equitable, responsive and efficient health systems, according to the OECD. The rise in the health spending share of GDP was particularly marked in countries hard hit by the global recession. In Ireland, the percentage of GDP devoted to health increased from 7.7% in 2007 to 9.5% in 2009. In the United Kingdom, it rose from 8.4% in 2007 to 9.8% in 2009. Health spending per capita increased on average across OECD countries by 3.8% in 2008 and 3.5% in 2009. Public spending on health grew even faster, at an average rate of 4.8% in 2008 and 4.1% in 2009. Private spending also continued to increase in most countries, but at a slower pace (1.9% in 2008 and 2.7% in 2009).

Variations in health expenditure across countries:

In 2009, there were large variations in how much OECD countries spent on health and the health spending share of GDP. The United States continued to outspend all other OECD countries by a wide margin, with spending on health per capita of $7960. This was two-and-a-half times more than the OECD average of $3223. As a share of GDP, the United States spent 17.4% on health in 2009, 5 percentage points more than in the next two countries, the Netherlands and France (which allocated 12.0% and 11.8% of their GDP on health). Norway and Switzerland were the next biggest spenders on health per capita, with spending of more than $5000 per capita in 2009.

Total health expenditure as a share of GDP, 2009

Click here to download the underlying data in Excel

These are some of the short- and long-term trends shown in OECD Health Data 2011, the most comprehensive source of comparable statistics on health and health systems across the 34 OECD countries. Covering the period 1960 to 2009, this interactive database can be used for comparative analyses on health status, risk factors to health, health care resources and utilization, and health expenditure and financing.

OECD Health Data 2011 is available for the first time in OECD.Stat, the statistics portal for all OECD databases.

More information about the database is available at www.oecd.org/health/healthdata.

About the Organisation for Economic Co-operation and Development (OECD)

The Organisation for Economic Co-operation and Development (OECD, French: Organisation de coopération et de développement économiques, OCDE) is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade. It defines itself as a forum of countries committed to democracy and the market economy, providing a platform to compare policy experiences, seeking answers to common problems, identifying good practices, and co-ordinating domestic and international policies of its members.

June 30, 2011: More than a Year After Its Passage, Obama Administration Still Has Been Unable to Dispel the Many Lies and Misrepresentations About PPACA: What We Have Here is a Failure to Communicate

One of my criticisms of the Obama Administration (and I have a "few" <smile>) is it's failure to use the bloody pulpit to better explain what is happening in this country ... and what it has been trying to do to bring about the CHANGE that was promised. Here we are more than a year after the passage of Obama's landmark health reform legislation, and significant numbers of Americans still don't understand what is in the law and what it will do for them; and worse, many of them still believe the worst lies and misrepresentations that have been spread about the law.

Now, assuredly, the right wing media continues to reinforce the worst of these lies 24/7. Fox News is the major culprit, repeatedly spreading the worst lies. The ultraconservative majority on the Supreme Court gave the far right the keys to the cash till with its decision in Citizens United, opening the door for corporate zillionaires like the Koch brothers to control their own private army of misinformed and willing dupes through their financing of groups like the TeaParty zealots. The now almost ubiquitous tv ads featuring former Arkansas governor and chubette, Mike Huckabee, starts and ends with absolutely false statements about the Patient Protection and Affordable Care Act. And, well, let's face it, too many Americans are all too willing to believe the worst about that "black man in the White House," regardless of how asinine the stories and lies might be.

Yet for all of that, these far right extremists make up less than a third of the population, Obama has failed to carry the truth to the middle who remain divided on the law and are mostly skeptical of its benefits, according to a new tracking survey released by the Kaiser Family Foundation. But many Americans are also unfamiliar with key provisions of the bill, including those affecting Medicare, the report found.

In June, slightly fewer people rated the law favorably (42%) than unfavorably (46%), roughly matching results from the monthly Kaiser Foundation tracking surveys conducted over the last year. This month just 24%believed the law will leave their own families better off, 35%said they will be worse off, while the rest said it will make no difference (34%) or were unsure what the impact would be. Nonetheless, more Americans would expand the law (31%) or keep it as is (20%) than repeal it and replace with a Republican alternative (19%) or repeal it with no replacement (19%).

But the lack of understanding of the key aspects of the law ... and not the distaste for repealing it ... may provide the most important lessons to lawmakers now debating potential cuts and major changes to Medicare as part of an effort to reduce the deficit. For example, despite the best efforts of the Obama administration and Democrats in Congress, many Americans say they are unfamiliar with some of the key provisions of the law affecting Medicare. That lack of familiarity (or confidence) is even higher with seniors. Specifically:

Only 45%of adults and 42% of seniors say that the health reform law will "gradually close the Medicare 'doughnut hole.' "

Only 36% of adults and 21% of seniors say the law will "eliminate co-pays and deductibles for many preventative services under Medicare."

Only 47% of adults and 37% seniors know the law creates "an expert panel to recommend ways to reduce Medicare spending if costs grow too rapidly."

Meanwhile, large numbers of Americans continue to believe the health care law affects Medicare in ways it does not. For example:

31% of adults and 22% of seniors say the law "allow[s] a government panel to make decisions about end-of-life care for people on Medicare" -- another 20%t of adults and 31%of seniors are unsure.

48% of adults and 35% of seniors say the law will "cut benefits that were previously provided to all people on Medicare."

This continuing lack of awareness (or dogged skepticism) should serve as a warning to policymakers about the limits of their ability to "sell" the public and seniors on the details of complex legislation affecting Medicare.

These latest results are consistent with findings from a March Kaiser Foundation survey, which found a majority of Americans saying they remain "confused" about the new law (53%) and still lacked sufficient information to understand how it will affect them personally (52%). This confusion persists despite ...or perhaps because of ... more than $200 million in television advertising during the health reform debate, one of the most heavily covered and closely watched legislative battles in many years.

One of the ironies revealed by the new survey is that when it comes to reducing Medicare spending and keeping the program sustainable, Americans say the would be more trusting of "an independent panel of full-time experts appointed by the president and confirmed by the Senate" (55% trust a great deal or fair amount) than "the federal agency that runs Medicare" (40%), Congress (34%) or private insurance companies (34%). Yet the independent panel described by the question is an initiative of the existing health reform law, something fewer than half the respondents were aware of.

The poll also found Americans divided on a plan, proposed by Republicans, to change Medicare to system where, as described by the survey, "people choose their insurance from a list of private health plans that may offer different benefits at different premium amounts, and the government pays a fixed amount toward that cost." Slightly fewer preferred such a program (45%) to keeping Medicare as it is today (49%), although the question came near the end of the survey and immediately followed a question that posed the possibility that Medicare is either "going bankrupt" or "is facing a funding shortfall."

June 30, 2011: An Old Joke, Privatizing Social Security (and Medicare, too)

If you had purchased $1000.00 of Nortel stock one year ago, it would now be worth $49.
With Enron stock, you would have had $16.50 left of the original $1,000.
With WorldCom stock, you would have had less than $5.00 left.
Then who would pay for your Social Security?
But, if you had purchased $1,000 worth of beer one year ago, drank all the beer,
then turned in the cans for the aluminum recycling REFUND, you would have had $214.00.
Based on the above, the best current investment advice is to drink heavily and recycle. It’s called the 401-Keg Plan.

June 29, 2011: 6th U.S. Circuit Court of Appeals Upholds PPACA's Individual Mandate

File Name: 11a0168p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

_________________

THOMAS MORE LAW CENTER; JANN DEMARS; JOHN CECI; STEVEN HYDER; SALINA HYDER,

Plaintiffs-Appellants,

BARACK HUSSEIN OBAMA, in his official capacity as President of the United States; KATHLEEN SEBELIUS, in her official capacity as Secretary, United States Department of Health and Human Services; ERIC H. HOLDER, JR., in his official capacity as Attorney General of the United States; TIMOTHY F. GEITHNER, in his official capacity as Secretary, United States Department of Treasury,

Defendants-Appellees

Full decision: http://www.ca6.uscourts.gov/opinions.pdf/11a0168p-06.pdf

The most important part of today’s Sixth Circuit decision upholding the individual mandate provision of the Patient Protection and Affordable Care Act isn’t what the court said, although the court’s rejection of this utterly meritless challenge is quite significant. The most important part of today’s decision is who made it.

Judge Jeffrey Sutton is a George W. Bush appointee and a former law clerk to conservative Justice Antonin Scalia. He served as an officer in the ultra conservative Federalist Society’s Federalism and Separation of Powers practice group, and was one of the nation’s leading crusaders for expanding the role of the states at the federal government’s expense. Prior to becoming a judge, Sutton devoted much of his career to preventing people with disabilities, religious minorities, and even children who are illegally deprived of Medicaid coverage from holding states accountable in federal court ... even successfully arguing major states’ rights cases in the Supreme Court. So he is exactly the kind of person who would be extremely sympathetic to the conservative claim that the Patient Protection and Affordable Care Act exceeds Congress’ lawful authority.

And yet, Sutton’s opinion today said something else entirely

"On the merits, this case presents two distinct questions: Does the individual mandate survive the substantial-effects test? And, if so, is there something about the novelty of this law—compelling the purchase of health insurance—that warrants striking it down nonetheless?"

The initial question is the easier of the two, as the breadth of the substantial effects doctrine and the nature of modern health care favor the validity of this law. No matter how you slice the relevant market—as obtaining health care, as paying for health care, as insuring for health care—all of these activities affect interstate commerce, in a substantial way. [...]

Does the Commerce Clause contain an action/inaction dichotomy that limits congressional power? No—for several reasons. First, the relevant text of the Constitution does not contain such a limitation. To the extent “regulate,” “commerce,” “necessary” and “proper” might be words of confinement, the Court has not treated them that way, as long as the objects of federal legislation are economic and substantially affect commerce. [...] Second, the promise offered by the action/inaction dichotomy—of establishing a principled and categorical limit on the commerce power—seems unlikely to deliver in practice. Level of generality is destiny in interpretive disputes, and it remains unclear at what level plaintiffs mean to pitch their action/inaction line of constitutional authority or indeed whether a workable level exists.

To translate a bit, Sutton concluded that the heart of the assault on the Patient Protection and Affordable Care Act — the claim that a law encouraging people to buy insurance is unconstitutional because Congress cannot compel people to take this unwanted action — has no basis in the “text of the Constitution,” and it rests on a legal distinction that is utterly incoherent. And this comes from one of the most conservative members of the federal bench.

To be fair, Sutton also rested his decision on something known as the facial/as-applied distinction. The Supreme Court allows two kinds of challenges to a law: “facial” challenges, that claim the law must be effectively stricken from the books, and “as applied” challenges, which claim that the law cannot be applied to a particular person or entity. In order to bring a facial challenge, a party must show that “no set of circumstances exists under which the Act would be valid,” and Sutton floated the possibility that someone who has achieved the miraculous task of avoiding the national health care market altogether may be able to exempt themselves from the law through an as-applied challenge brought at a future date. But Sutton’s harsh words for the basic legal theory underlying the plaintiffs’ case is a body blow to these lawsuits.

In writing his opinion, it almost seemed like Judge Sutton was arguing AGAINST the reasoning expressed in one of the other pending PPACA individual mandate cases, that of retired Federal District Judge Roger Vinson in Florida v DHHS, 716 F. Supp.2d 1120, (N.D. Fla. 2010), as Sutton specifically addressed the rather facile conclusion reached by Judge Vinson, that Congress under no circumstance can regulate "inactivity." Judge Vinson had ruled the mandate unconstitutional and the entire PPACA legislation therefore inseparably invalid. That case is now pending in the 11th U.S. Court of Appeals in Atlanta. The case against the Patient Protection and Affordable Care Act is so weak that one of the court of appeals’ most conservative judges — a judge who devoted much of his life to shrinking federal power — just rejected it. Now would be a good time for the nation to collectively stop pretending that these lawsuits have any merit whatsoever.

As Catholics pray in the Confiteor, the public confession of sin: "I confess to Almighty God, and to your my brothers and sisters, that I have sinned through my own fault, in my thoughts and in my words, in what I have done, and in what I have failed to do ..." The act of doing nothing, i.e., not having health insurance, can be as wrong as any actions actually taken ... and therefore can and does have an impact on interstate commerce such as to give Congress the constitutional right to regulate.

[And for the record: I am a member if the bar for the Sixth U.S. Circuit Court of Appeals.]

June 29, 2011: PPACA Employer Balance Sheet: Will Employers Continue to Offer Employee Health Insurance Coverage Under PPACA?

Starting in 2014, the Patient Protection and Affordable Care Act will require all Americans who can afford it, to have health insurance (the “individual mandate”). The law includes tax credits and assistance for low to middle income families to help them buy the required coverage. PPACA also has an “employer mandate,” effective in 2014 with penalties for larger employers (over 50 employees) who fail to offer coverage meeting the minimum requirements of the law. Smaller employers are exempt, but PPACA does include tax incentives … credits and assistance … to help small employers offer coverage to their employees. TeaParty/Republicans have predicted that employers, will pay the penalties, and will cancel existing coverage and turn their employees over to the health exchanges created under the law to get coverage on their own. Given that prediction, which PPACA-supporters do no accept, perhaps answer is to raise the penalties so that there is “no profit” to the employer for taking such actions. But is there a profit in canceling coverage?

Given all of these uncertainties, precisely estimating how many employers will respond one way or another is difficult. But it’s helpful to look at some of the key factors that an offering employer might consider in deciding whether to continue to offer health benefits, almost as a sort of balance sheet from the perspective of employers and their workers:

Factor	Continue Offering Benefits	Drop Benefits
Employer and Employee Costs	Today, employers that offer coverage generally contribute most of the cost for employees but less for their families. Employees pay the rest. The employee share has been rising inexorably for years, one of the leading factors in the drive for health care reform.	Employees would still have to buy insurance, but without the employer contribution. Employers would save money as a result of no longer contributing towards the cost of insurance. What would happen to those savings is an open question. Economic theory suggests that thes savings, even over time, would only marginally be returned to employees in the form of higher salaries, especially for lower level unskilled or limited-skill workers. For higher skilled employees, the proportion of lost benefits value returned would vary from employer to employer depending on how competitive the market was for skilled workers, at the time. (Currently very little to none.)
Tax Subsidies and Credits	The employer contribution to health benefits is tax-free to workers. Employees can also pay their shares on a pre-tax basis through a so-called “section 125” account. The tax-preferred status of employer-provided health coverage is a particular benefit for higher-income employees in high tax brackets, with the government in effect paying for a substantial portion of the cost.	There would be no way for workers to buy health insurance on a tax-free basis, but low- and moderate-income workers would be eligible for tax credits if they bought insurance in an exchange. Workers and family member would face a financial penalty if they did not buy coverage (if it was otherwise affordable to them).
Penalties	Larger companies with at least 50 employees offering coverage face a penalty of $3,000 per work in cases where coverage is unaffordable and the worker buys insurance in an exchange with the benefit of a tax credit. Employers can avoid the penalty by offering coverage meeting certain requirements.	Larger companies not offering coverage would face a penalty equal to $2,000 per year times the number of full-time employees minus 30.
Medicaid	Employees and their families eligible for Medicaid – which is expanded under the PPACA health reform law – can choose to enroll in Medicaid whether the employer offers health benefits or not.
Predictability of Costs	Employer costs for health insurance are highly unpredictable.	Costs for non-offering employers would be more predictable. But companies in markets where they are competing for skilled workers may be cautious about dropping benefits until they see how the exchanges are working.
Benefits Package	Smaller employers providing coverage must offer the essential benefit package (regulations not yet issued); minimum benefit requirements for larger employers and all employers that self-fund are not clear in the law and may be addressed by regulation. The Obama administration has been very broadly permitting exemptions for many large (low-wage) employers (big box stores, fast-food chains) who offer their low income employees plans that have been described as “Mini-Med” … offering some but limited benefits.	Workers receive the essential benefit package (regulations not yet issued) if they buy coverage themselves; may be eligible for cost-sharing subsidies if family income is below 250% of the poverty level and they buy coverage in an exchange.

The dollars and cents part of a decision like this is fairly easy to quantify, particularly after some of the regulatory issues described above are resolved. For larger employers with reasonably-paid employees, it’s likely that it will still make financial sense for them to offer coverage. The existing tax subsidy their workers get for employer-provided health insurance will likely outweigh the combination of the tax credits that would be available for workers in the exchanges and the penalty the employer would have to pay for not offering coverage. These types of companies tend to offer good benefits already, so the outstanding regulatory decisions will probably not have a big impact on their choices. On the other hand, for employers with many lower-wage employees -- including such places as restaurants and retail stores -- the picture is cloudier. Some of these companies provide pretty limited coverage to their lower-skilled employees, while in some cases providing better benefits to managers and other office employees. It’s unclear whether they will be able to continue this in the future. Even if firms are permitted to maintain limited coverage for their employees, some will find that the balance sheet tilts towards not offering coverage because the new sliding scale tax credits available to their predominantly lower-wage employees in exchanges will far exceed the current tax subsidy for employer-based insurance.

The idea of an employer dropping health benefits sounds like a bad outcome. And under the status quo, it is – workers lose the ability to get health insurance on a tax-free basis and they can be denied coverage in the individual market if they have pre-existing health conditions. After 2014, though, things change quite a bit. The coverage in the individual market will offer the same protections as in the group market, and tax credits will be available in exchanges for people with incomes up to four times the poverty level (now about $89,000 a year for a family of four). Really what happens is that the employees move from being covered by a private employer-based plan subsidized through a federal (and often state) tax subsidy to a private plan subsidized through a federal tax credit. The company and its workers are making a decision about which form of tax subsidy provides the best value, something that employers and others do every day. The penalty for non-offering large employers tilts the playing field somewhat towards employer-based coverage.

Beyond the dollars and cents, the intangibles around employer decisions to keep offering health benefits are tougher to assess. We don’t yet know exactly what exchange coverage will look like and whether employees with employer-based insurance will view it as a reasonable or even desirable alternative. Will employees be willing to give up something they know for something new? Or, will a good job mean one that still comes with health benefits? For the answers to these questions, we’ll likely have to wait until 2014 and beyond, as employers consider their options – probably very cautiously – while looking behind their backs at competitors doing the same thing.

June 29, 2011: For Profit Medicaid Coverage Plans: Higher Costs, Lower Quality ... And Lessons for Vouchercare

The United States already has a model for how Medicare will work under the TeaParty/Republican plan (“Vouchercare”), which proposes to turn Medicare over to for-profit insurers starting in 2022. In many states, Medicaid programs have contracted out the delivery of health care services to publicly traded health plans that are focused on managing the care of Medicaid members.

Logo CommonWealth_Fund.jpg The non-partisan Commonwealth Fund has published a study examining how publicly traded health plans differ from non–publicly traded ones in terms of administrative expenses, quality of care, and financial stability and found publicly traded plans that focused primarily on Medicaid enrollees paid out the lowest percentage of their Medicaid premium revenues in medical expenses and reported the highest percentage in administrative expenses across different types of health plans. The publicly traded plans also received lower scores for quality-of care measures related to preventive care, treatment of chronic conditions, members’ access to care, and customer service.

It gives us something to look forward to when President Bachmann and a TeaParty/GOP-controlled Congress re-write Medicare along “Vouchercare” lines, and – for those of us already older than 55 – change the program even for us. Have no doubt, seniors, they will do just that.

http://www.commonwealthfund.org/Content/Publications/Issue-Briefs/2011/Jun/Financial-Health-Medicaid-Managed-Care.aspx

June 28, 2011: At Long Last, Medicare Launches Quality-Based Payment System for Hospitals

After a decade or so of collecting information from hospitals on the quality of their care, the Medicare program will finally start using what the data actually reveals about a hospital's performance to set the level of payments the hospital receives. Starting October 1, 2012, hospitals will get paid more if they ensure patients get care within 90 minutes of possibly having a heart attack. So too will those that provide care within a 24-hour window to surgery patients to prevent blood clots; communicate detailed instructions to heart failure patients on follow-up care once they leave the hospital; and ensure their facilities are clean and well-maintained. Other measures used to vary payment levels include those assessing the quality of treatment for pneumonia and steps taken to prevent patients from acquiring infections within the hospital.

The American Hospital Association issued a statement expressing "disappointment" with the inclusion of infection data to set payments, among other criticisms.

The Centers for Medicare and Medicaid Services said that in addition to the "process of care" measures, the payment system will take into account the experience of patients during a hospital stay, such as how easily they can communicate with doctors and nurses. Facilities that patients rate highly in that area put themselves in a stronger position to get paid more. Officials said the new "Value-Based Purchasing Program" that they will give greater weight to "process-of-care" measures than patient satisfaction measures in computing overall performance scores. They said they will follow a 70 to 30 balance in their weighting system.

The higher payments in the fiscal year that starts October 1, 2012 will come from a pool of $850 million collected through reducing, by 1 percent, the Medicare payments of all of the 3,500 hospitals affected. The Centers for Medicare and Medicaid Services says "the size of the fund will gradually increase over time, resulting in a shift from payments based on volume to payments based on performance."

Critics say the system is unfair to facilities that have relatively fewer resources to devote to improving the quality of their treatment. However, a CM² official noted on during the briefing that hospitals showing improvement on quality performance measures can also qualify for more reimbursement. In other words, improvement is rewarded financially, along with attainment of certain standards of performance.

CM² Administrator Donald M. Berwick said that over time the measurement system will focus more on the actual medical outcome of treatment rather than on the processes a facility uses in delivering a particular type of care. "This is work in progress," he said of the initial set of measure. "This is by no means the complete set."

Berwick said the payment system would help accomplish the goals of a new public-private program to advance patient safety, which CM² estimates will save up to $35 billion in health costs over the next three years, including $10 billion in Medicare. According to a CM² estimate, Medicare spent $4.4 billion in 2009 to care for patients harmed in the hospital. Readmissions to the hospital cost Medicare another $26 billion, CM² estimated.

The American Hospital Assocation said in a statement that "we are disappointed that our recommendations to improve the Value-Based Purchasing program were ignored. We have serious concerns about specific components, such as the inclusion of hospital-acquired" infections in the payment system.

Because of other provisions to penalize hospitals financially for such infections, hospitals would unfairly be penalized twice, the AHA statement said. It added that the final rule gives too much weight to patient satisfaction measures pending needed improvements in how patient experiences are assessed. "Lastly, the AHA urged CM² to exclude from hospitals' scores any measures for which they report fewer than 25 cases, rather than 10 cases and we are disappointed that CM² did not follow our recommendation."

AHA said it supports the concept of tying payment to performance on quality measures, however.

Medicare has paid hospitals more for a number of years if they report performance data on a variety of quality measures. They get paid less if they do not report the data. But actual performance has not been used to vary payment levels. Performance data has been made available to the public, however, to help them compare hospitals in deciding where to go for treatment.

June 28, 2011: Does Lowering the Top Marginal Tax Rate Encourage Economic Growth? ... Well, No!

If you asked any random conservative lawmaker the most important thing the federal government could do to promote economic growth, he would probably answer, “lower the top marginal income tax rate.” A few examples:

Speaker John Boehner: "We've seen over the last 30 years that lower marginal tax rates have led to a growing economy, more employment and more people paying taxes.”

Sen. Jim DeMint: "But we also need to just cut the top marginal rate for individuals and corporations so that we're more competitive and companies can look way out in the future and know they'll have a competitive tax rate.”

Club for Growth: “To stimulate GDP growth, a tax cut has to cut the marginal tax rates upon which the decision makers in the economy base their decisions to work and, above all, to invest.”

Cutting taxes for the wealthy has become conservatives’ one, and often only, response to any economic problem. Just one problem: History doesn’t bear them out. Not at all.

The top marginal income tax rate has ranged all the way from 92% down to 28% over the last 60 years. With such a large range, it should be easy to see the enormous impact of lower rates on overall economic growth, as conservatives routinely claim. Years with lower marginal rates should boast higher growth, right?

That’s definitely not what happened. In fact, growth was actually fastest in years with relatively high top marginal tax rates. Back in the 1950s, when the top marginal tax rate was more than 90%, real annual growth averaged more than 4 percent. During the last eight years, when the top marginal rate was just 35%, real growth was less than half that.

average annual growth in real gdp, by top marginal tax rate

Altogether, in years when the top marginal rate was lower than 39.6% ... the top rate during the 1990s ... annual real growth averaged 2.1 percent. In years when the rate was 39.6% or higher, real growth averaged 3.8 percent. The pattern is the same regardless of threshold. Take 50%, for example. Growth in years when the tax rate was less than 50% averaged 2.7 percent. In years with tax rates at or more than 50%, growth was 3.7 percent. These numbers do not mean that higher rates necessarily lead to higher growth. But the central tenet of modern conservative economics is that a lower top marginal tax rate will result in more growth, and these numbers do show conclusively that history has not been kind to that theory.

June 28, 2011: Until Most of the Wall Street Executives Who Brought the Nation to its Financial Knees are in Jail, There Can Be No Justice in America (and even then "justice" may depend on their wealth and status)

June 28, 2011: Flow Chart to Determine How You Will Vote in the Next Election

June 27, 2011: Senatecritter Bernie Sanders (I-VT) Reads the Riot Act to TeaParty/Republicans

BERNIE SANDERS SPEAKING ON THE FLOOR OF THE US SENATE ON JUNE 27

Mr. President, this is a pivotal moment in the history of our country. In the coming days and weeks, decisions will be made about our national budget that will impact the lives of virtually every American in this country for decades to come.

At a time when the richest people and the largest corporations in our country are doing phenomenally well, and, in many cases, have never had it so good, while the middle class is disappearing and poverty is increasing, it is absolutely imperative that a deficit reduction package not include the disastrous cuts in programs for working families, the elderly, the sick, the children and the poor that the Republicans in Congress, dominated by the extreme right wing, are demanding.

In my view, the President of the United States of America needs to stand with the American people and say to the Republican leadership that enough is enough. No, we will not balance the budget on the backs of working families, the elderly, the sick, the children, and the poor, who have already sacrificed enough in terms of lost jobs, lost wages, lost homes, and lost pensions. Yes, we will demand that millionaires and billionaires and the largest corporations in America contribute to deficit reduction as a matter of shared sacrifice. Yes, we will reduce unnecessary and wasteful spending at the Pentagon. And, no we will not be blackmailed once again by the Republican leadership in Washington, who are threatening to destroy the full faith and credit of the United States government for the first time in our nation's history unless they get everything they want.

Instead of yielding to the incessant, extreme Republican demands, as the President did during last December's tax cut agreement and this year's spending negotiations, the President has got to get out of the beltway and rally the American people who already believe that deficit reduction must be about shared sacrifice.

It is time for the President to stand with the millions who have lost their jobs, homes, and life savings, instead of the millionaires, who in many cases, have never had it so good.

Unless the American people by the millions tell the President not to yield one inch to Republican demands to destroy Medicare and Medicaid, while continuing to provide tax breaks to the wealthy and the powerful, I am afraid that is exactly what will happen.

So, I am asking the American people who may be listening today that if you believe that deficit reduction should be about shared sacrifice, if you believe that it is time for the wealthy and large corporations to pay their fair share, if you believe that we need to reduce unnecessary defense spending, and if you believe that the middle class has already sacrificed enough due to the greed, recklessness and illegal behavior on Wall Street, the President needs to hear your voice, and he needs to hear it now.

Go to my website: sanders.senate.gov and send a letter to the President letting him know that enough is enough! Shared sacrifice means that it's time for the wealthiest Americans and most profitable corporations in America to pay their fair share and contribute to deficit reduction.

Mr. President, as you know, this country faces enormous challenges.

The reality is that the middle class in America today is collapsing and poverty is increasing.

When we talk about the economy, we have got to be aware that the official government statistics are often misleading. For example, while the official unemployment rate is now 9.1%, that number does not include the large numbers of people who have given up looking for work and people who want to work full-time but are working part time.

And, when you take all of those factors into account, the real unemployment rate is nearly 16%.

Further Mr. President, what we also must understand is that tens of millions of Americans are working longer hours for lower wages. The reality is that over the last 10 years, median family income has declined by over $2,500.

As a result of the greed, recklessness and illegal behavior on Wall Street, which caused this terrible recession, millions more have lost their homes, their pensions, and their retirement savings.

Unless we reverse our current economic course our children will have, for the first time in modern American history, a lower standard of living than their parents.

Mr. President, we throw out a lot of numbers around here. But, I think it is important to understand that behind every grim economic statistic are real Americans who cannot find a decent paying job, and are struggling to feed their families, put a roof over their heads or to just stay afloat.

Last year, I asked my constituents in Vermont to share their personal stories with me -- explaining how the recession, which started more than three years ago, has impacted their lives. In a matter of weeks, more than 400 Vermonters responded and I also heard from people throughout the country who are struggling through this terrible recession.

Their messages are clear. People are finding it hard to get jobs or are now working for lower wages than they used to earn. Older workers have depleted their life savings and are worried about what will happen to them when they retire. Young adults in their 20s and 30s are not earning enough to pay down college debt. People of all ages, all walks of life, from each corner of Vermont -- have shared their stories with my office.

Let me just read a few of these letters:

The first is from a 51 year old woman from West Berlin, Vermont who wrote "Dear Mr. Sanders, Don't really know what to say, I could cry. My significant other was out of work for a year, now he works in another state. I've been out of work since April. Our mortgage company wants the house because we can't make the payments. I can't find a job to save my soul that will pay enough to make a difference. How bad does it have to get! My mother went through the Great Depression and here we go again. I figure that I'm going to lose everything soon! I'm a well educated person who can't see through the fog."

A gentlemen in his mid-50's from Orange County, Vermont wrote: "After being unemployed three times since 1999 due to global trade agreements, I now find myself managing a hazardous waste transfer facility that pays about 25% less than what I was making in 1999. My wife's children have moved back in, unemployed. And we are saving very little for retirement. If things don't improve soon we will likely have to work until we die. We consider ourselves lucky that we are employed. Our children's friends tend to show up around meal time. They are skinny. We feed them. This is no recession, it's a modern day depression."

A woman in her late 40s from Westminster, Vermont wrote: "I am a single mom in Vermont, nearly 50. I patch together a full time job making $12 an hour and various painting jobs and still can't afford to get myself out of debt, or make necessary repairs on my home. No other jobs in sight, I apply all the time to no avail. Food and gas bills go up and up, but not my income. I have no retirement at all, can't afford to move, feeling stuck, tired, and hopeless."

And a 26 year old young man from Barre, Vermont wrote: "In 2002, I received a scholarship to Saint Bonaventure University, the first in my family to attend college. Upon graduation in 2006, I was admitted to the Dickinson School of Law at Penn State University, and graduated in 2009 with $150,000 of student debt. In Western New York I could find nothing better than a $10 an hour position stuffing envelopes ... I live in a small studio apartment in Barre without cable or internet ... I have told my family I don't want them to visit because I am ashamed of my surroundings ... My family always told me that an education was the ticket to success, but all my education seems to have done in this landscape is make it impossible to pull myself out of debt and begin a successful career."

Mr. President, just over the last two weeks, nearly 500 people from Vermont and throughout the U.S. have written me about their experiences with trying - often in vain - to find affordable dental care. One wrote: "I can't afford health insurance so dental work is definitely out. I agree [that] ... we are so backward in this country, even though studies have linked bad dental care to heart problems and cancer."

Mr. President, when the Republicans are talking about trillions of dollars in savage cuts this is what they are talking about. They're talking about throwing millions and millions of people off of Medicaid. Let me tell you what that means.

Earlier this year Arizona passed budget cuts that took patients off its transplant list. As a result people who were kicked off the list have died. Not because they couldn't find a donor but because the state decided it could no longer afford to pay for their transplants. To make matters worse Arizona's Governor has gone further, asking the federal government for a waiver to kick off another 250,000 from its Medicaid program.

They're talking about making it impossible for working class families to send their kids to college. They're talking about cuts in nutrition programs which will increase the amount of hunger in America, which is already at an all time high. According to a 2009 study, there are over 5 million seniors who face the threat of hunger, almost 3 million seniors who are at risk of going hungry, and almost 1 million seniors who do go hungry because they cannot afford to buy food. The Republicans in Congress would make this situation much, much worse.

Mr. President, this is a lot of pain that the Republicans are tossing out while they want to protect their rich and powerful friends. In my view, the president has got to stand tall, take the case to the American people, and hold the Republicans responsible if the debt ceiling is not raised and the repercussions of that.

That, Mr. President, is what's going on in the real world. People fighting to keep their homes from falling into foreclosure; struggling with credit card debt; marriages have been postponed; lives have been derailed; and retirement savings have been raided to pay for college tuition, to keep their businesses afloat, or simply to keep gas in their car and pay their bills. That is what is going on in the real world.

And, Mr. President, while the middle class disappears and poverty is increasing, there is another reality and that is that the gap between the very rich and everyone else is growing wider and wider. The United States now has, by far, the most unequal distribution of wealth and income of any major country on earth.

Today, the top one percent earns over 20 percent of all income in this country, which is more than the bottom 50 percent earns. Over a recent 25 year period, 80 percent of all new income went to the top one percent. In terms of the distribution of wealth, as hard as it may be to believe, the richest 400 Americans own more wealth than the bottom 150 million Americans.

The rich get richer, the poor get poorer, and the middle class continues to disappear. That is what is going on in this country in the year 2011, and we have all got to understand that.

Mr. President, everybody knows this country faces a major deficit crisis and we have a national debt of over $14 trillion. What has not been widely discussed, however, is how we got into this situation in the first place. A huge deficit and huge national debt did not happen by accident. It did not happen overnight. It happened, in fact, as a result of a number of policy decisions made over the last decade and votes that were cast right here on the floor of the Senate and in the House.

Let's never forget, as we talk about the deficit situation, that in January of 2001, when President Clinton left office, this country had an annual federal budget surplus of $236 billion with projected budget surpluses as far as the eye could see. That was when Clinton left office.

What has happened in the ensuing years? How did we go from huge projected surpluses into horrendous debt? The answer, frankly, is not complicated. The CBO has documented it. There was an interesting article on the front page of the Washington Post on April 30, talking about it as well. Here is what happened.

When we spend over $1 trillion on wars in Afghanistan and Iraq and choose not to pay for those wars, we run up a deficit. When we provide over $700 billion in tax breaks to the wealthiest people in this country and choose not to pay for those tax breaks, we run up a deficit. When we pass a Medicare Part D prescription drug program written by the drug companies and the insurance companies that does not allow Medicare to negotiate prescription drug prices and ends up costing us far more than it should -- $400 billion over a 10-year period -- and we don't pay for that, we run up the deficit. When we double military spending since 1997, not including the wars in Afghanistan and Iraq, and we don't pay for that, we drive up the deficit.

Further, Mr. President, the deficit was also driven up by the greed, recklessness and illegal behavior on Wall Street, which caused the worst economic crisis since the Great Depression. Millions of Americans lost their jobs and revenue was significantly reduced as a result.

Mr. President, the end result of all of these unpaid-for policies and actions - year after year of the deficits I just described - is a staggering amount of debt. When President Bush left office, President Obama inherited an annual deficit of $1.3 trillion with deficits as far as the eye could see, and the national debt more than doubled from when President Bush took office.

The reality is Mr. President, if we did not go to war in Iraq, if we did not pass huge tax breaks for millionaires and billionaires, who didn't need them, if we did not pass a prescription drug program with no cost control written by the drug and insurance companies, and if we did not deregulate Wall Street, we would not be in the fiscal mess that we find ourselves in today. It really is that simple.

In other words, the only reason we have to increase our nation's debt ceiling today is that we are forced to pay the bills that the Republican leadership in Congress and President Bush racked up.

Now, Mr. President, given the decline in the middle class, given the increase in poverty, and given the fact that the wealthy and large corporations have never had it so good, Americans may find it strange that the Republicans in Washington would use this opportunity to make savage cuts to Medicare, Medicaid, education, nutrition assistance, and other lifesaving programs, while pushing for even more tax breaks for the wealthy and large corporations.

Unfortunately, it is not strange. It is part of their ideology. Republicans in Washington have never believed in Medicare, Medicaid, federal assistance in education, or providing any direct government assistance to those in need. They have always believed that tax breaks for the wealthy and the powerful would somehow miraculously trickle down to every American, despite all history and evidence to the contrary. So, in that sense, it is not strange at all that they would use the deficit crisis we are now in as an opportunity to balance the budget on the backs of working families, the elderly, the sick, the children and the poor, and work to dismantle every single successful government program that was ever created.

And, that's exactly what the Ryan Republican budget that was passed in the House of Representatives earlier this year - and supported by the vast majority Republicans here in the Senate just last month - would do. Here are just a few examples:

The Republican budget passed by the House this year would end Medicare as we know it within 10 years.

The non-partisan CBO estimates that under the Ryan proposal, in 2022, a private health care plan for a 65-year-old equivalent to Medicare coverage would cost about $20,500, yet the Republican budget would provide a voucher for only $8,000 of those premiums. Seniors would be on their own to pay the remaining $12,500 - a full 61% of the total. How many of the 20 million near-elderly Americans who are now ages 50-54 will be able to afford that? This approach would transfer control of Medicare to insurers and there would be no guaranteed benefits, essentially ending Medicare as we know it.

The Republican budget would force 4 million seniors in this country to pay $3,500 more, on average, for their prescription drugs by re-opening the Medicare Part D donut hole.

Under the Republican budget, nearly 2 million children would lose their health insurance over the next 5 years by cuts to the Children's Health Insurance Program, according to the Congressional Budget Office.

At a time when 50 million Americans have no health insurance, the Republican budget would cut Medicaid by over $770 billion, causing millions of Americans to lose their health insurance and cutting nursing home assistance in half - threatening the long-term care of some 10 million senior citizens.

The Republican budget would completely repeal the Affordable Health Care Act preventing an estimated 34 million uninsured Americans from getting the health insurance they need.

At a time when the cost of a college education is becoming out of reach for millions of Americans, the Republican budget would slash college Pell grants by about 60% next year alone - reducing the maximum award from $5,550 to about $2,100.

At a time when over 40 million Americans don't have enough money to feed themselves or their families, the Republican budget would kick up to 10 million Americans off Food Stamps, by slashing this program by more than $125 billion over the next decade.

At a time when our nation's infrastructure is crumbling, the Republican budget passed in the House and supported by all but a handful of Republicans here in the Senate would slash funding for our roads, bridges, rail lines, transit systems, and airports by nearly 40 percent next year alone.

Yet despite the fact that military spending has nearly tripled since 1997, the House Republican budget does nothing to reduce unnecessary defense spending. In fact, defense spending would go up by $26 billion next year alone under the Republican plan.

Interestingly enough, at a time when the rich are becoming richer, when the effective tax rates for the wealthiest people, at 18 percent, are about the lowest on record, at a time when the wealthiest people have received hundreds of billions of dollars in tax breaks, at a time when corporate profits are at an all-time high and major corporations making billions of dollars pay nothing in taxes, my Republican colleagues, in their approach toward deficit reduction, do not ask the wealthiest people or the largest corporations to contribute one penny more for deficit reduction.

In fact, the Republican budget would keep the good times rolling for those who are already doing phenomenally well - it provides over $1 trillion in tax cuts to millionaires and billionaires by permanently extending all of the Bush income tax cuts; reducing the estate tax for multi-millionaires and billionaires; and lowering the top individual and corporate income tax rate from 35 to 25 percent.

Mr. President, the Republican idea of moving toward a balanced budget is to go after the middle-class, working families, and low-income people, and to make sure the millionaires and billionaires and largest corporations in this country that are doing phenomenally well do not have to share in the sacrifices being made by everybody else. They will be protected. The Republican approach to deficit reduction in Washington is the Robin Hood philosophy in reverse: taking from the poor and giving to the rich.

And it's not as if it's good for our economy. Mark Zandi, the former economic advisor to John McCain when he was running for president, has estimated that the Republican budget plan will cost 1.7 million jobs by the year 2014, with 900,000 jobs lost next year alone.

The House Republican budget is breathtaking in its degree of cruelty.

But, don't take my word for it.

In a letter to Congressional leaders after the House GOP plan was introduced, nearly 200 economists and health care experts wrote, "turning Medicare into a voucher program would undermine essential protections for millions of vulnerable people. It would extinguish the most promising approaches to curb costs and to improve the American medical care system."

Jeffrey Sachs, an economics professor at Columbia University, who was a key economic adviser to the World Bank, the IMF, and the World Health Organization, told MSNBC last April that the House Republican plan, "goes right out to destroy Medicaid within the next few years, slashing it drastically. And then on Medicare, it delays [cuts] for 10 years, and then [the House Republican plan] goes out to destroy it, to make sure that elderly people will not have a guaranteed access to health care. They will be getting some premium [support] but they're going to have to put a lot of money out of pocket."

Robert Greenstein, the President of the Center on Budget and Policy Priorities, said last April that the House Republican budget "proposes a dramatic reverse-Robin-Hood approach that gets the lion's share of its budget cuts from programs for low-income Americans - the politically and economically weakest group in America and the politically safest group for Ryan to target- even as it bestows extremely large tax cuts on the wealthiest Americans. Taken together, its proposals would produce the largest redistribution of income from the bottom to the top in modern U.S. history, while increasing poverty and inequality more than any measure in recent times and possibly in the nation's history."

Ezra Klein, a columnist at the Washington Post wrote last April that "the budget Ryan released is not courageous or serious or significant. It's a joke, and a bad one. For one thing, Ryan's savings all come from cuts, and at least two-thirds of them come from programs serving the poor. The wealthy, meanwhile, would see their taxes lowered, and the Defense Department would escape unscathed. It is not courageous to attack the weak while supporting your party's most inane and damaging fiscal orthodoxies. But the problem isn't just that Ryan's budget is morally questionable. It also wouldn't work."

Harold Meyerson, a columnist for the Washington Post wrote on April 5th that "If it does nothing else, the budget that the House Republicans unveiled provides the first real Republican program for the 21st century, and it is this: Repeal the 20th century ... Ryan achieves the bulk of his savings through sharp reductions in projected spending on Medicare and Medicaid ... Ryan's budget would also reduce projected spending on discretionary domestic programs - education, transportation, food safety and the like - to well below levels of inflation ... The cover under which Ryan and other Republicans operate is their concern for the deficit and national debt. But Ryan blows that cover by proposing to reduce the top income tax rate to just 25 percent. He imposes the burden for reducing our debt not on the bankers who forced our government to spend trillions averting a collapse but on seniors and the poor."

Mr. Meyerson, concludes by saying this: "There's talk that we have a president who's a Democrat - the party that created the American social contract of the 20th century. Initially, he focused on reshaping and extending that contract into the 21st. Now that the Republicans want to repeal it all, he's nowhere to be found. Has anybody seen him? Does he still exist?"

Mr. President, the deficit has been caused by unpaid-for wars, tax breaks for the rich, the Medicare Part D prescription drug program, the bailout of Wall Street, a declining economy, and less revenue coming in. The Republican "solution" in Washington is to balance the budget on the backs of the sick, the elderly, the children and the poor, to cut back on environmental protection, to cut back on transportation, while providing even more tax breaks to the wealthy and well connected. That is unacceptable and that is what we have got to stop.

Mr. President, it's not just rich individuals who are making out like bandits. As hard as it may be to believe, some of the largest, most profitable corporations in this country are not only avoiding paying any federal income taxes whatsoever, but they are actually receiving tax rebates from the IRS. And, the Republican response to this reality is to provide even more tax breaks to these corporate freeloaders. That may make sense to someone. It does not make sense to me.

Earlier this year, my office published a top ten list of the worst corporate tax avoiders in this country. I would like to take this opportunity to read this list. These are just a few of the corporations that the Republicans want to protect, while they are trying to deny millions of Americans health insurance, a college education, and nutrition assistance. Here are the top ten corporate freeloaders in America today:

1) Exxon Mobil. In 2009, Exxon Mobil made $19 billion in profits. Not only did Exxon avoid paying any federal income taxes that year, it actually received a $156 million rebate from the IRS, according to its SEC filings.

2) Bank of America. Last year, Bank of America received a $1.9 billion tax refund from the IRS, even though it made $4.4 billion in profits and just a couple of years ago received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.

3) General Electric. Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.

4) Chevron. In 2009, Chevron received a $19 million refund from the IRS after it made $10 billion in profits.

5) Boeing. Last year, Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS.

6) Valero Energy. Last year, Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.

7) Goldman Sachs. In 2008, Goldman Sachs paid only 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion bailout from the Federal Reserve and U.S. Treasury Department.

8) Citigroup. Last year, Citigroup made more than $4 billion in profits but paid no federal income taxes, even though it received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury.

9) ConocoPhillips. ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2007 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction during those years.

10) Carnival Cruise Lines. Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.

In other words, Mr. President, at a time when major corporations such as General Electric and ExxonMobil make billions of dollars in profit, and pay nothing in federal income taxes, the Republican plan is to provide them with even more tax breaks.

Mr. President, large corporations are sitting on a record-breaking $2 trillion in cash. The problem is not that corporations are taxed too much. The problem is that consumers don't have enough money to buy their products and the Republican agenda would make that far worse.

Corporate tax revenue last year was down by 27% compared to 2000, even though corporate profits are up 60 percent over the last decade.

Large corporations and the wealthy are avoiding $100 billion in taxes every year by setting up offshore tax shelters in places like the Cayman Islands, Bermuda and the Bahamas. Ending that anti-American shell game could raise $1 trillion over 10 years toward deficit reduction.

In 2005, 1 out of 4 large corporations paid no income taxes at all even though they collected $1.1 trillion in revenue. The simple truth is that if we are going to reduce the deficit in a responsible way, we have got to make sure that profitable corporations pay their fair share.

Now, I understand that my Republican friends, and quite frankly some of my Democratic friends, will do everything they can to protect the wealthy and the powerful, even if it means destroying the lives of millions of Americans in the process.

But, what we need to understand, what the President needs to understand, is that poll after poll after poll shows that the Republican plan to make savage cuts to Medicare, Medicaid and education, while providing even more tax breaks to the wealthy and large corporations, is way out of touch with what the American people want.

Let me just read to you a few of these polls.

According to a recent Boston Globe poll of likely voters in New Hampshire, perhaps the most anti-tax state in this country, 73% support raising taxes on people making over $250,000 a year; 78% oppose cutting Medicare; 71% oppose cutting Medicaid; and 76% oppose cutting Social Security.

Now, Mr. President, you may be saying to yourself well, that was just one poll, and it was only polling one state. Clearly, that must have been an aberration.

Wrong. National poll after national poll have almost mirrored what New Hampshire voters are saying.

A recent NBC News/Wall Street Journal poll found the following:

* 81 percent of the American people believe it is totally acceptable or mostly acceptable to impose a surtax on millionaires to reduce the deficit.

* 74 percent of the American people believe it is totally acceptable or mostly acceptable to eliminate tax credits for the oil and gas industry.

* 68 percent of the American people believe it is totally acceptable or mostly acceptable to phase out the Bush tax cuts for families earning over $250,000 a year.

* 76 percent of the American people believe it is totally acceptable or mostly acceptable to eliminate funding for weapons systems the Defense Department says are not necessary.

* 76 percent believe it is totally unacceptable or mostly unacceptable to cut Medicare to significantly reduce the budget deficit.

* 77 percent believe it is totally unacceptable or mostly unacceptable to cut Social Security to significantly reduce the deficit.

* 67 percent believe it is totally unacceptable or mostly unacceptable to cut Medicaid to significantly reduce the deficit.

* 77 percent believe it is totally unacceptable or mostly unacceptable to cut funding for K-12 education to significantly reduce the deficit.

* 56 percent believe it is totally unacceptable or mostly unacceptable to cut Head Start.

* 59 percent believe it is totally unacceptable or mostly unacceptable to cut college student loans.

* And, 65 percent believe it is totally unacceptable or mostly unacceptable to cut heating assistance to low income families.

And, while the leaders of the Tea Party movement in Washington are fighting to dismantle Medicare and Medicaid and getting the vast majority of Republicans in Congress to follow their marching orders, 70% of those who identify themselves with the Tea Party outside of the beltway oppose cutting Medicare and Medicaid to reduce the deficit, according to a recent McClatchy Poll.

Mr. President, here is the last poll I would like to highlight. It was done by the Washington Post and ABC News, and here is what it says:

* 72% of Americans support raising taxes on incomes over $250,000 to reduce the national debt - including 91% of Democrats; 68% of Independents; and 54% of Republicans.

Yet, Mr. President, there does not seem to be one Republican in Washington, DC, who would support raising taxes on the wealthiest two percent of Americans - those earning over $250,000 a year to reduce the deficit. Only in Washington is it considered a controversial idea to make the wealthy and large corporations pay their fair share.

Instead of listening to millionaire and billionaire campaign contributors, it is time for our leaders in Washington to start listening to the overwhelming majority of Americans who want the wealthiest people in this country and the most profitable corporations in this country to contribute to deficit reduction. It is time for shared sacrifice. The middle class, the elderly, the sick, the children, and the poor have already sacrificed enough in terms of lost jobs, lost wages, lost pensions, and lost homes. When are the wealthiest Americans and most profitable corporations going to be asked to pay their fair share? If not now, when?

And, the fact of the matter is, Mr. President, that moving towards deficit reduction in a way that's fair is not quite as complicated as the American people have been led to believe by the corporate media and right wing think tanks.

In fact, if you are not beholden to Wall Street, large corporations and wealthy campaign contributors, and you are not scared to death of the unlimited number of 30 second ads they may run against you, it is actually quite easy.

I know many people have different ideas about how we might move towards a balanced budget. I am not saying that I have all of the answers. But, let me just give a few examples of how we can reduce the deficit by more than $4 trillion dollars over the next decade that asks the wealthy and large corporations to pay their fair share and does not unfairly harm ordinary Americans.

First, if we simply repealed the Bush tax breaks for the top two percent, we could raise at least $700 billion over the next decade. The Republicans claim that repealing these tax breaks would increase unemployment. They are wrong. These tax breaks have been in place for over a decade and they have not led to a single net private sector job. In fact, under the eight years of President Bush, the private sector lost over 600,000 jobs and the deficit exploded. When President Clinton increased taxes on the top two percent, over 22 million jobs were created, and the revenue generated from this policy led to a $236 billion budget surplus.

Secondly, a 5.4 percent surtax on millionaires and billionaires would raise more than $383 billion over 10 years, according to the Joint Tax Committee. As I said earlier, a millionaire's surtax has the support of 81 percent of the American people according to NBC News and the Wall Street Journal.

Third, Mr. President, the U.S. government is actually rewarding companies that move U.S. manufacturing jobs overseas through loopholes in the tax code known as deferral and foreign source income. This is unacceptable. During the last decade, the U.S. lost about 30% of its manufacturing jobs and over 50,000 factories have been shut down.

If we ended the absurdity of providing tax breaks to companies that ship jobs overseas, the Joint Tax Committee has estimated that we could raise more than $582 billion in revenue over the next ten years. Right now we have a tax policy that says that if you shut down a manufacturing plant in America, and move to China, the IRS will give you a tax break. That may make sense to corporate CEOs. It doesn't make sense to me.

Fourth, Mr. President, if we ended tax breaks and subsidies for big oil and gas companies, we could reduce the deficit by more than $40 billion over the next ten years. The five largest oil companies in the United States have earned about $1 trillion in profits over the past decade. Meanwhile, in recent years, some of the very largest oil companies in America like Exxon Mobil and Chevron, as I pointed out earlier, have paid absolutely nothing in Federal income taxes. In fact, some of them have actually gotten a rebate from the IRS. That has got to stop.

Fifth, Mr. President, if we prohibited abusive and illegal offshore tax shelters, we could reduce the deficit by up to $1 trillion over the next decade. Each and every year, the United States loses an estimated $100 billion in tax revenues due to offshore tax abuses by the wealthy and large corporations. The situation has become so absurd that one five-story office building in the Cayman Islands is now the "home" to more than 18,000 corporations. That is wrong. The wealthy and large corporations should not be allowed to avoid paying taxes by setting up tax shelters in the Cayman Islands, Bermuda, the Bahamas or other tax haven countries.

Sixth, Mr. President, if we established a Wall Street speculation fee of less than one percent on the sale and purchase of credit default swaps, derivatives, stock options and futures, we could reduce the deficit by more than $100 billion over the next decade. Both the economic crisis and the deficit crisis are a direct result of the greed and recklessness on Wall Street. Establishing a speculation fee would reduce gambling on Wall Street, encourage the financial sector to invest in the productive economy, and significantly reduce the deficit without harming average Americans.

There are a number of precedents for this. The U.S had a similar Wall Street speculation fee from 1914 to 1966. The Revenue Act of 1914 levied a 0.2% tax on all sales or transfers of stock. In 1932, Congress more than doubled that tax to help finance the government during the Great Depression. And today, England has a financial transaction tax of 0.25 percent, a penny on every $4 invested.

Number seven, Mr. President, if we taxed capital gains and dividends, the same way that we tax work, we could raise more than $730 billion over the next decade. Warren Buffet has often said that he pays a lower effective tax rate than his secretary. And, today the effective tax rate of the richest 400 Americans, who earn an average of more than $280 million each year, is just 18 percent, lower than most nurses, teachers, firefighters, and police officers pay. The reason for this is that the wealthy obtain most of their income from capital gains and dividends, which is taxed at a much lower rate than work. Right now, the top marginal income tax for working is 35%, but the tax rate on corporate dividends and capital gains is only 15%. Taxing wealth and work at the same rate could raise more than $730 billion over a ten-year period - and it's the right thing to do.

Number eight, if we established a progressive estate tax on inherited wealth of more than $3.5 million, we could raise more than $70 billion over 10 years. Last year, I introduced the Responsible Estate Tax Act that would reduce the deficit in a fair way while ensuring that 99.7 percent of Americans who lose a loved one would never have to pay a dime in federal estate taxes.

Number nine, we have got to reduce unnecessary and wasteful spending at the Pentagon, which now consumes over half of our discretionary budget. Since 1997, our defense budget has virtually tripled going from $254 billion to $700 billion.

Defense experts such as Lawrence Korb, an Assistant Secretary of Defense under Ronald Reagan, has estimated that we could achieve significant savings of around $100 billion a year at the Pentagon while still ensuring that the United States has the strongest and most powerful military in the world.

For example, as a result of four separate investigations that I requested, the GAO has found that the Pentagon has $36.9 billion in spare parts that it does not need and which are collecting dust in government warehouses. We have got to do a much better job than that.

And, much of the huge spending at the Pentagon is devoted to spending money on Cold War weapons programs to fight a Soviet Union that no longer exists. That has got to stop.

Further, we also must end the unnecessary War in Iraq and the War in Afghanistan as soon as possible. These wars have gone on long enough. Reducing Pentagon spending by at least $900 billion over 10 years is something that we can and must do.

Number 10, if we required Medicare to negotiate for lower prescription drug prices with the pharmaceutical industry, we could save over $157 billion over 10 years. As a result of the Medicare Part D prescription drug legislation signed into law under President George W. Bush, Medicare is prohibited from negotiating with the pharmaceutical industry to lower drug prices for seniors. This is wrong. Requiring Medicare to negotiate for lower drug prices could save the federal government and seniors over $15 billion a year.

Number 11, if we enacted a robust public option or a Medicare-for-all health insurance program, we would be able to save more than $68 billion over the next decade and provide affordable health insurance coverage for millions of Americans.

Number 12, Mr. President, as almost everyone knows, China is manipulating its currency, giving it an unfair trade advantage over the United States and destroying decent paying manufacturing jobs in the process. If we imposed a currency manipulation fee on China and other low wage countries, the Economic Policy Institute has estimated that we could raise $500 billion over 10 years and create 1 million jobs in the process.

Finally, Mr. President, I think just about everyone agrees that there is waste, fraud, and abuse in every agency of the federal government. Rooting out this waste, fraud, and abuse could save about $200 billion over the next 10 years.

Mr. President, if we did all of these things we could easily reduce the deficit by well over $4 trillion over the next decade, if not much more. It would be done in a fair way, and it would not unnecessarily and needlessly ruin the lives of millions of Americans who are struggling desperately just to make ends meet.

Mr. President, the radical right wing agenda of more tax breaks for the wealthy paid for by the dismantling of Medicare, Medicaid, education, nutrition, and the environment may be popular in the country clubs and cocktail parties of the rich and powerful, but it is way out of touch with what the overwhelming majority of Americans want.

Mr. President, as you know, late last week, Congressman Eric Cantor, the Republican Majority Leader in the House and Senator Jon Kyl, the Republican Minority Whip in the House walked out of the budget negotiations being led by Vice President Joe Biden.

And, the reason they walked out was clear. They were not willing to close one single loophole in the tax code that allows the wealthy and large corporations to avoid paying taxes by stashing their money in the Cayman Islands. They were unwilling to stop tax breaks for companies that ship jobs overseas, or close tax loopholes that give billionaires like Warren Buffet the ability to pay lower effective tax rates than their secretaries.

There is apparently no end as to how far the Republican leadership will go in Washington to protect their wealthy campaign contributors, even if it means allowing the federal debt limit to expire and causing another depression.

My sincere hope is that the President will use this Republican walkout as an opportunity to rally the American people and make it clear that he will never support Republican demands to move toward a balanced budget solely on the backs of working families, the elderly, the children, the sick, and the poor.

But, I don't think that the President will do this unless the American people send him a message that enough is enough! The American people have got to write to the President and tell him not to balance the budget on the backs of the most vulnerable people in this country. Do not decimate Medicare, Medicaid, Pell Grants, education, and the environment to pay for more tax breaks for the rich and powerful. Stand up for the millions, who have seen their homes, jobs, and savings vanish, instead of the millionaires, who have never had it so good.

For those of you who are listening to this speech, if you believe that enough is enough, if you believe in shared sacrifice, if you believe that it is time for the wealthiest Americans and most profitable corporations to contribute to deficit reduction, go to my website: sanders.senate.gov. At this website, you will find a letter to the White House that you can sign - let me read what it says:

"Dear Mr. President,

This is a pivotal moment in the history of our country. Decisions are being made about the national budget that will impact the lives of virtually every American for decades to come. As we address the issue of deficit reduction we must not ignore the painful economic reality of today - which is that the wealthiest people in our country and the largest corporations are doing phenomenally well while the middle class is collapsing and poverty is increasing. In fact, the United States today has, by far, the most unequal distribution of wealth and income of any major country on earth.

Everyone understands that over the long-term we have got to reduce the deficit - a deficit that was caused mainly by Wall Street greed, tax breaks for the rich, two wars, and a prescription drug program written by the drug and insurance companies. It is absolutely imperative, however, that as we go forward with deficit reduction we completely reject the Republican approach that demands savage cuts in desperately-needed programs for working families, the elderly, the sick, our children and the poor, while not asking the wealthiest among us to contribute one penny.

Mr. President, please listen to the overwhelming majority of the American people who believe that deficit reduction must be about shared sacrifice. The wealthiest Americans and the most profitable corporations in this country must pay their fair share. At least 50 percent of any deficit reduction package must come from revenue raised by ending tax breaks for the wealthy and eliminating tax loopholes that benefit large, profitable corporations and Wall Street financial institutions. A sensible deficit reduction package must also include significant cuts to unnecessary and wasteful Pentagon spending.

Please do not yield to outrageous Republican demands that would greatly increase suffering for the weakest and most vulnerable members of our society. Now is the time to stand with the tens of millions of Americans who are struggling to survive economically, not with the millionaires and billionaires who have never had it so good."

If you're listening out there, and agree with what I am saying, but are wondering what you can do to make a difference, I would urge you to consider signing this letter. Staying silent and doing nothing is not an option. Your voice needs to be heard and you can make a difference.

Mr. President, we have seen this movie before. The Republicans, led by their extreme right wing, have been successful in getting their way because of their refusal to compromise and their willingness to hold the good credit and economic security of the American people hostage.

In December, the Republican leadership was prepared to hold the middle class tax cuts and unemployment benefits hostage in order to extend the Bush tax breaks for the top two percent. The Republicans won and as a result over $200 billion was added to the deficit over the next two years.

Specifically, the December tax cut agreement extended the Bush income tax rates for those earning more than $250,000; maintained lower tax rates on capital gains and dividends; and lowered the estate tax which only benefits the top 0.3 percent.

Let me remind, my colleagues who the biggest winners were from last December's tax cut agreement.

According to Citizens for Tax Justice, extending the Bush tax breaks for the top 2 percent has provided Rupert Murdoch, the CEO of News Corporation, with an estimated $1.3 million tax break.

Tom Donohue, the head of the U.S. Chamber of Commerce, who has urged American corporations to ship jobs overseas, will receive an estimated $215,000 tax break from this deal.

Jamie Dimon, the head of JP Morgan Chase, whose bank received a bailout of over $160 billion from the Federal Reserve, will receive an estimated $1.1 million tax break from this deal.

Vikram Pandit, the CEO of Citigroup, a bank that got more than $2.5 trillion in near zero interest loans from the Fed, will receive an estimated $785,000 tax break by extending the Bush tax cuts.

Ken Lewis, the former CEO of Bank of America, a bank that got nearly a trillion dollars in low interest loans from the Fed, will receive an estimated $713,000 tax break.

The CEO of Wells Fargo (John Stumpf), whose bank got a $25 billion bailout, will receive an $813,000 tax break from this deal.

The CEO of Morgan Stanley (John Mack), whose bank got more than $2 trillion in low interest loans from the Fed, will receive a $926,000 tax break from this agreement.

The CEO of Aetna (Ronald Williams) will receive a tax break worth $875,000.

The CEO of Cigna (David Cordani) will receive a $350,000 tax break. And, on and on it goes.

The rich get richer, the poor get poorer, and the middle class disappears. That is what is going on in this country today.

Then, Mr. President, In April, the Republicans in Congress were prepared to shut down the government, disrupt the economy, and deny paychecks to 800,000 federal workers if they couldn't get their way in slashing programs for low and moderate income Americans. As a result, the President and this Congress agreed to virtually everything the Republicans wanted by enacting a budget that slashed $78 billion from the President's request.

Let me give you just a few examples of what kinds of cuts were included in this year's spending agreement:

At a time when college education has become unaffordable for many, Pell grants are now being reduced by an estimated $35 billion over 10 years.

At a time when 50 million Americans have no health insurance, at a time when we have a crisis in access to primary care, and at a time when 45,000 Americans die each and every year because they delay seeking care they cannot afford, the 2011 spending agreement cut $600 million from community health centers and $3.5 billion from the Children's Health Insurance Program.

At a time when we should be putting Americans to work rebuilding our crumbling infrastructure, federal funding for new high-speed rail projects was eliminated. In other words, the rich get richer, while the needs of ordinary Americans are attacked.

And, today, the Republican Leadership has made it clear that, unless they get their way on implementing a significant part of the Ryan budget in 2012, they are prepared to vote against raising the debt ceiling. If the debt ceiling is not extended, the United States will, for the first time in history, default on its debt and likely plunge the world's financial markets into a major crisis. Yet that is just what the Republican leadership and its members are threatening to do. Shame on them.

Mr. President, in many ways, the Republicans in Washington have been acting like school yard bullies. And, as we know, bullying is a serious problem in our schools. Every educator worth his or her salt will tell you that when you're dealing with a bully, you must not give into their tactics or tolerate their temper tantrums - you have to deal with them sternly and consistently. You cannot allow them to win by dictating the rules of the game and trampling over everyone else if they don't get their way.

Mr. President, we have a serious deficit problem that must be solved, no one would deny it.

But the problem is not that we spend too much on the needs of the elderly and have to slash Social Security; the problem is that we have provided hundreds of billions in tax breaks to millionaires and billionaires who don't need them and in many cases don't want them.

The problem is not that we spend too much money on financial aid for college and have to slash Pell Grants. The average college senior today is graduating with $24,000 in debt. The problem is that each and every year, large corporations and the wealthiest in our society are avoiding $100 billion in federal taxes through tax shelters in the Cayman Islands, Bermuda and other places throughout the world.

The problem is not that we are spending too much on childcare. Childcare is increasingly becoming out of reach for too many American families. The problem is that about one out of four large and profitable corporations in this country do not pay any federal income taxes, and in many cases get a tax rebate from the IRS.

The problem is not that we spend too much money to reduce childhood poverty in this country. We have the highest childhood poverty rate in the industrialized world! The problem is that when all is said and done we will have spent $3 trillion on the unnecessary and misguided Iraq War.

Mr. President, the problem is that this deficit was caused by actions voted for by nearly all of my Republican friends: the wars, tax breaks for the rich, Medicare Part D, and the Wall Street Bailout. In the middle of a recession when the middle class and working families are already hurting, when poverty is increasing it is not only immoral, it is bad economics to balance the budget on working families and the most vulnerable people in this country.

When people are hurting, when they have lost their jobs, when their incomes are going down, you do not say to those people: We are throwing you off Medicaid. We are going to end Medicare as we know it, we are going to cut back on Federal aid to education so your kid cannot go to college. That is not what you say in a humane and fair society.

On the other hand, at the same time as the wealthiest people are becoming phenomenally wealthier, and when large corporations are making huge profits, and in many cases not paying any taxes at all, it is entirely appropriate - in fact, it is a moral imperative - to say to those people: Sorry, you are also American. You have got to participate in shared sacrifice. You have also got to help us reduce the deficit.

That is where we are right now. We are at a pivotal moment in the midst of a major debate, but it is not only on financial issues. It is very much a philosophical debate. It is a debate about which side you are on. Do you continue to give tax breaks to the very rich and make savage cuts for working families, for children, the elderly, the poor, the most vulnerable?

Mr. President, another thing that is rarely mentioned on the floor of the Senate is the $3 trillion Federal Reserve bailout, that was only fully made public after I inserted an amendment into the Dodd-Frank Act last year to require that it be made public.

As it turns out, while small business owners in the State of Vermont and throughout this country were being turned down for loans, not only did large financial institutions receive substantial help from the Fed, but also some of the largest corporations in this country also received help in terms of very low interest loans.

And, here is something we also learned: this bailout was not just about American banks and corporations but foreign banks and foreign corporations also received hundreds of billions of dollars from the Fed as well.

Then, on top of that, a number of the wealthiest individuals in this country also received a major bailout from the Fed. The "emergency response,'' which is what the Fed described their action as during the Wall Street collapse, appears to any objective observer to have been the clearest case that I can imagine of socialism for the very rich and rugged free market individualism for everybody else.

In other words, if you are a huge financial institution, like Goldman Sachs, whose recklessness and greed caused this great recession, no problem. You get almost $800 bilion in near zero interest rate loans from the Fed. If you are a major American corporation, such as General Electric or McDonald's or Caterpillar or Harley-Davidson or Verizon, no problem. You received a major handout from the U.S. Government.

But if you are a senior citizen living in a nursing home paid for by Medicaid, well, guess what, you are on your own.

If you are an elderly person who cannot afford to heat their homes in the winter when the temperature is 20 below zero, tough luck. We don't have any money for you. But, if you happen to be the state-owned Bank of Bavaria -- not Pennsylvania, not California, but Bavaria -- the Federal Reserve has enough money to loan you over $2.2 billion by purchasing your commercial paper.

The Fed said this bailout was necessary in order to prevent the world economy from going over a cliff. But over 3 years after the start of the recession, millions of Americans remain unemployed and have lost their homes, their life savings, and their ability to send their kids to college. Meanwhile, huge banks and large corporations have returned to making incredible profits and paying their executives record-breaking compensation packages, as if the financial crisis they started never occurred.

Mr. President, everyone understands that over the long-term we have got to reduce our record-breaking $14.2 trillion national debt. But, we must reduce the deficit in a fair way and not balance the budget solely on the backs of the middle class, the sick, the elderly, the children and the poor.

That means we absolutely must tell the wealthy and large corporations that it is high time that they to pay their fair share in taxes. And, that means that the President has got to stand tall and stand firm and let the American people know that if we do default on our debt obligations, if America and the world economy is plunged into a depression, it was because the Republicans refused to raise the taxes of the wealthiest Americans and most profitable corporations in this country by one red cent.

Shared sacrifice isn't just good public policy, it is also what the American people want. Overwhelming majorities of the American people believe that the best way to reduce the deficit is to end tax breaks for the wealthy, big oil, Wall Street, and that we must bring our troops home from Afghanistan and Iraq.

It's about time that Washington listened to the American people. Let's reduce the deficit. But, let's do it in a fair and responsible way that requires shared sacrifice from the wealthiest Americans and most profitable corporations.

I thank the President and I yield the floor.

June 27, 2011: Condo for Sale: Clemmons, North Carolina

After 8 years as our "home" in North Carolina (for the summers and holidays), near our grandchildren, Bob and I have decided to list our Clemmons condo for sale. 1230 sq. ft, 2 bedrooms (large master), 2 baths (large master with whirlpool tub and separate shower with walk-in closet), crown molding and more extras, all appliances included, gas heat and hot water ... oops, I sound like a real estate agent.

Contact: Jeanne Matthews (703) 371-4894

June 27, 2011: Congressional Limericks

The recent brouhaha involving Housecritter Weiner has led to literally hundreds of (deservingly) crude jokes... many making their way around the Internet, particularly on right-wing sites. Not that Critter Weiner doesn't deserve the opprobrium, I am bothered by the hypocrisy of those attributing such misbehavior to Democrats without mentioning comparable, if not far more excessive behavior, by Republicans. Take Critter Vitter for an example.

The particular little Limerick that triggered my current lather:

There once was a pervert named Weiner
Who had a perverted demeanor
Forced from the Hill
For acting like Bill
Now Congress is one weiner leaner

To which, I responded:

There once was Senatorial sex hound named Vitter
For whom sex with his wife had grown bitter
He knew in Louisiana he was on top
So protected by his friends in the GOP
He didn’t have to become a quitter

Oh well, it was a lazy Sunday <sigh>

June 24, 2011: New Surgeon General Warning Label

June 24, 2011: Supreme Court Ruling Allows Disclosure of Physician Prescribing Data

Yesterday, the American Medical Association released the following statement in response to the U.S. Supreme Court's decision in Sorrell v. IMS Health, (No. 10–779. Argued April 26, 2011—Decided June 23, 2011) holding that the State of Vermont had unconstitutionally tried to limit "commercial free speech" by limiting individual physician prescriber data.

“The American Medical Association believes today’s Supreme Court decision in Sorrell v. IMS Health is important.

“While the AMA supports the appropriate disclosure of prescriber data, the AMA firmly believes that every physician has the unequivocal right to decide whether his or her individual prescribing data is shielded from pharmaceutical detailers. To help physicians exercise that right, the AMA created the Physician Data Restriction Program (PDRP), which enables physicians to “opt out” of such disclosure quickly and easily, while still allowing their data to be available for academic and governmental research.

“We believe the PDRP balances individual physician concerns regarding prescription data with First Amendment freedoms and the fundamental public interest in robust medical research.

“The PDRP is available to all U.S. physicians - both AMA members and nonmembers. Since its launch in 2006, nearly 28,000 physicians have used the PDRP to restrict their data. Physicians using the PDRP report high satisfaction rates - with 96 percent expressing satisfaction with the program and 56 percent telling a colleague about it. Interested physicians can register online or by calling (800) 621-8335.

“As a service to physicians across the country, the AMA will continue to promote PDRP to ensure physicians have choice and control over their prescribing data.”

I believe the initial reaction of most civil libertarians is that this 6-3 decision is misdirected. I admit that was my own first reaction when news of Vermont's legislation limiting prescription-prescriber data was first announced a couple of years back. But upon further analysis and reflective thought ... and given my predilection to using electronic health information (both individual and collective) with appropriate privacy protections, to save money and more efficiently and effectively deliver health care ... I have modified my views. The use of individual physician prescriber data is a two-sided coin. Yes, PhRMA marketing people may sic legions of "detailers" upon unsuspecting physicians who may not be prescribing a particular product that their companies manufacture, but payers, and particularly government payers, may also use that information to uncover physicians who may be mis-prescribing and/or over-prescribing.

The problem has been that payers haven't been using this data ... and the marketeers have been. Payers, both government and commercial, have an opportunity to see where physicians are abusing prescriptions, not just for addictive medications, but by over-prescribing expensive, but perhaps not as effective or equally effective, lower priced and generic medications. The information can be used to counteract the PhRMA marketing campaigns from commercialism run-amok to true cost-saving improvements in health care. At least that's my opinion.

Protecting the identity and personal information of the patient is still critically important, but we have to remember that physician's have no corresponding right to privacy. They want to be paid and they need the third-party payment processes to maintain their high incomes (don't get me started on "concierge medicine" ... if all, or even a significant number of physicians went back to collecting their bills directly from the patient, the current system ... of mainly 3rd-party payment ... which has seen their incomes over the past 40 years mushroom well beyond the nation's economy as a whole ... would collapse). Once that 3rd-party gets involved, the physician can't be heard to complain that his or her data is being mis-used.

June 23, 2011: Judicial Scandals and Impartiality Threaten American Justice and Public Confidence in the Court

Off topic (sort of), although ultimately the U.S. Supreme Court will review the constitutionality of the health care reform law: the Patient Protection and Affordable Care Act, and it is becoming increasingly clear that politics and not the law could be the deciding factor in any review of PPACA.

Democratic Housecritter Chris Murphy (CT) circulated a draft letter this morning to his fellow members of Congress asking the House Judiciary Committee’s leadership to hold a hearing on the Supreme Court Transparency and Disclosure Act, a bill that will would end the U.S. Supreme Court's right to exempt itself from all judicial ethics laws. As Murphy’s letter explains, his bill addresses the bevy of recently revealed ethics scandals involving members of the Supreme Court, including the Clarence Thomas gifting scandal. (Justice Thomas' wife has also been extensively involved in "anti-Obamacare" activities, soliciting monies and directly lobbying Congress on the repeal issue. Under standard judicial ethics, a judge whose spouse had engaged in such activities regarding an issue pending before the court would be disqualified from participating in the matter.)

There have been other alarming reports of justices – most notably Justices Antonin Scalia, Clarence Thomas and Samuel Alito – attending political events and using their position to fundraise for organizations. These activities would be prohibited if the justices were required to abide by the Judicial Conference Code of Conduct, which currently applies to all other federal judges. On these issues the code is quite clear. Canon 4C states that “a judge should not personally participate in fund-raising activities, solicit funds for any organization, or use or permit the use of the prestige of the judicial office for that purpose.” Additionally, in Canon 5 the code states, “[a] judge must refrain from all political activity.” While we understand that the Supreme Court is unique by its very nature, we do not believe there should be one set of guidelines for Supreme Court justices and stricter standards for all others judges.

The Supreme Court possesses the incredible power to interpret or even strike down laws they deem inconsistent with the Constitution. America trusts them with this power because justices must come to each case without a personal or financial stake in the outcome. Recent revelations about Justice Thomas accepting tens of thousands of dollars’ worth of gifts from individuals and organizations who often have an interest in matters before the courts calls into question the Court’s impartiality. Canon 4D of the Code of Conduct incorporates regulations providing that “[a] judicial officer or employee shall not accept a gift from anyone who is seeking official action from or doing business with the court.” Yet Justice Thomas received a gift valued at $15,000 from an organization that had a brief pending before his Court at the very moment they gave him the gift. Incidents such as these undermine the integrity of the entire judiciary, and they should not be allowed to continue.

In a message attached to the draft letter, Murphy asks his colleagues to join him in signing his request for “Judiciary Committee hearing on the alarming number of reports of possible unethical conduct by Supreme Court justices.” Rep. Murphy’s full draft letter requesting a hearing is copied below the fold. Sadly, with TeaParty/GOP control of the House of Representatives, there will be inquiry and no Congressional investigation into the unethical activities of Justices Thomas, Scalia and Alito.

June 23, 2011: HEALTH POPULI

A great resource, check it out: Health Populi at http://healthpopuli.com. Jane Sarasohn-Kahn is a health economist and management consultant that serves clients at the intersection of health and technology. Her clients include all stakeholders in health, including providers, payers and plans; companies in biopharma, medical devices, financial services, technology and consumer goods; non-profits and NGOs. Jane's lens on health is best-defined by the World Health Organization: health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity... Jane is also an old (well, not nearly as old as me) friend who has contributed mightily to the health care reform debate.

Today's Health Populi report: Cost concerns still rank high for U.S. health consumers; interest in electronic health technologies grows

http://healthpopuli.com/2011/06/23/cost-concerns-still-rank-high-for-u-s-health-consumers-interest-in-electronic-health-technologies-grows/

June 22, 2011: Toughening Standards and Fighting Medicare Fraud and Abuse

SenatecrittersTom Carper (D-DE) and Tom Coburn (TP-OK) introduced a bill today that hopefully will prevent a variety of health care scams. If approved, the measure is expected to save taxpayers billions of dollars by reducing waste, fraud, and abuse in our health care system. The bill would impose stronger penalties for Medicare fraud, curb improper payments and establish stronger fraud and waste prevention strategies, curb the theft of physician identities, identify more Medicaid overpayments and improve fraud data sharing. For instance, it would improve security of the database of Medicare providers to ensure “dead” doctors can’t place Medicare orders. The bill is also backed by Senatecritters Michael Bennet, Mike Enzi, Bob Corker, Scott Brown and Amy Klobuchar. No CBO score is out yet, but it’s expected to be low-cost. They’re expecting the legislation to curb billions in waste and fraud.

Medicare and Medicaid account for the bulk of the $125 billion in estimated improper payments that the government makes each year. The federal government made $34.3 billion in questionable payments for traditional Medicare fee-for-service and $22.5 billion for Medicaid in 2010 alone. The Carper-Coburn bill aims to reduce Medicare and Medicaid overpayments by improving the security of the database of Medicare providers to prevent the theft of physician identities, improve fraud data sharing, and identify more Medicaid overpayments.

I have long urged the DHHS and CM² to invest in better-integrated databases of medical claims, check providers and beneficiaries against state and federal death records and other public databases, as well as examine patterns of improper payments not detectable by auditing. The bill introduced today is a welcome step toward these objectives that we should all strongly give it our support.

Just Between You and Me: One of the slams right-wingers have made against Medicare is that it is rampant with fraud and abuse, and is wasteful when compared to the far more "efficient" private sector. This canard is spread as gospel, as if the private health insurance industry is not at risk for fraud and and/or manages to police it far better.

As Blue Cross-Blue Shield of North Carolina put it:

Health care fraud and abuse is a national problem that affects all of us either directly or indirectly. National estimates project that billions of dollars are lost to health care fraud and abuse on an annual basis. These losses lead to increased health care costs and potential increased costs for coverage.

Specifically, health care fraud is an intentional misrepresentation, deception, or intentional act of deceit for the purpose of receiving greater reimbursement. Health care abuse is reckless disregard or conduct that goes against and is inconsistent with acceptable business and/or medical practices resulting in greater reimbursement.

While Blue Cross and Blue Shield of North Carolina believes that most providers, members, groups, and brokers are honest, there are a small number of people who try to take advantage of BCBSNC and our members by engaging in health care fraud and abuse.

Part of the Medicare problem has been Congress itself. It wasn't until 1996 that Medicare fraud was made a "federal crime," which could be directly addressed by the Federal Bureau of Investigation and local U.S. Attorneys. The 1996 "HIPAA" legislation (yes Virginia, that HIPAA), not only elevated the criminality of Medicare fraud, it provided significant new funding for the Health Care Financing Administration (CM²'s predecessor agency). When I served during the Reagan years as counsel at HCFA, the division of the Office of General Counsel. the Office of the Inspector General, that was in charge of Medicare fraud had only seven lawyers on its staff, and none of them was fully dedicated to the fraud and abuse issue. With the new HIPAA requirements in place and the new funding, the staff was beefed up to more than 200 lawyers and accountants all working, on the Medicare and Medicaid fraud issue. In addition, the various U.S. Attorneys across the country now dedicated staff to the issue.... and billions were recovered while incidences of fraud went down.

Next came the 2000's and George W. Bush. First, he renamed HCFA, the Centers for Medicare and Medicaid Services. Why? Because the Bushies thought the name "Health Care Financing Administration" implied too much authority over all health care and they wanted to make of show of limiting its authority to just Medicare and Medicaid. Never mind the newly named agency under Bush didn't provide any "services." And there are two "M's" under the agency's purview, but only one "M" in their acronym. (That's why I always acronymize it as CM², BTW). Next, responding to "complaints" that Medicare had too many regulations and as part of the an overall "deregulatory" strategy which led to the banking crisis and sub-prime mortgage collapse, among others, funding for Medicare fraud and abuse prevention was dramatically curtailed by the Republican-controlled Congress.

Forget the fact that it was the GOP that enacted HIPAA and its fraud protections in the first place, that was another era and a vastly different Republican party. The new party, the "TeaParty/Republican" party, won't abide such spending and government oversight. The number of regulators, under the new TeaParty/GOP and George W. Bush assigned to police Medicare fraud went down, Funding was virtually stopped. Guess what? The rate of fraud went up. One of the little celebrated features in PPACA is that it restores most of the funding for Medicare and Medicaid fraud prevention programs that were left unfunded by George W, Bush. In just one year since PPACA was enacted, the amount of fraud recovered has gone back to 1990 levels. That won't last long, however, as TeaParty/Republicans, now in control of the House, are blocking any extension of funding (all why blaming Obama and PPACA for the amount of Medicare fraud). Convenient is it not?

Heck, one of the biggest perpetrators of health care fraud is now the TeaParty/Republican governor of Florida.

June 22, 2011: The Decline and Loss of the American Middle Class; a Reagan Legacy

"The United States faces a serious long-term deficit problem and an immediate short-term problem of slow growth and high unemployment. Current economic and budget conditions in the United States do not look at all like the conditions in countries that have experienced successful deficit reduction through short, sharp fiscal contractions. Non-partisan experts like Fed Chairman Bernanke and the Congressional Budget Office warn against cutting deficits too fast. And as the non-partisan Congressional Research Service concludes from its analysis of the international evidence, cutting budget deficits too rapidly under current U.S. economic conditions is most likely to hurt the economy and ultimately be unsuccessful. If we go down this path, I'm afraid the lesson will be 'Spend Less, Grow Less, Slow the Economy.'"

-- Chad Stone is Chief Economist at the Center on Budget and Policy Priorities, in testimony before the Joint Economic Committee http://www.cbpp.org/cms/index.cfm?fa=view&id=3516

With the 2012 elections looming, the issues of the economy and growing federal budget deficits will (or rather, "should") be the most important in the minds of the electorate, Repealing PPACA, outlawing same sex marriage, and teaching creation science in schools should be well down the list. The Center for Budget and Policy Priorities has a report out that has some very fascinating numbers:

Looking at the growth in federal deficits, who is to blame? Surely President Obama has contributed, continuing futile and now aimless wars in Iraq, Afghanistan and now perhaps Libya will contribute; buying into and extending the Bush-era tax cuts for the wealthy may be the major factor; bailing out investment bankers and funding their bonuses are primary causes. But failing to adequately address the economic recession is not one of them. Blame for that rests directly on Republicans who have blocked many proposed remedies and who have stymied effort after effort to incentify the economy by refusing to support critically needed stimulus and who have insisted upon policies that abet job loss rather than encouraging job gains.

The Bush-era tax cuts have contributed dramatically to the deficit, without creating a significant number of new U.S. jobs. Oh, yes, they have created many jobs ... in China, Mexico, Malaysia, India, and other southeast Asia locations, as American capitalists continue to move U.S. jobs off-shore. Why not, executive pay and bonuses depend mightily on returning profits to investors. Profits are made by paying workers, in many cases, less than a $5.00/day in some far off land. Never mind that U.S. workers lose their jobs in the process. Higher profits, even if short-lived, mean larger bonuses and higher pay for top level managers. Compensation for these executives is now being taxed at rates less than 2/3rds those of the golden-era Reagan years. The only "products" that the American economy seems willing to produce and reward are ephemeral financial instruments, junk bonds and high risk securities. The pay and bonuses for Wall Street financiers are reaching record levels... with much of it escaping taxation entirely.

As a native Detroiter, there is one truism that was engrained in virtually every school child in lower Michigan: Henry Ford, for all his flaws, including his anti-Semitism, knew one thing ... and one thing very well. He had to pay his workers a living wage, a wage that would actually allow them to buy the very products that he and they produced. A new Ford Model T would sell for $400, and his workers could afford to buy one with the wages he paid them. Prior to Ford announcing the then outrageously high pay of $5.00/day for the workers in his new Highland Park assembly plant, the practice in American business was to hold worker's wages to the lowest rates possible ... kind of like business managers today. The result of Ford's actions: a burgeoning American economy as other workers demanded that their employers pay them a wage that might allow them too to buy the very products and services they produced. In took labor unions and years of labor distress to shake things out, but the now applauded but also now threatened American "middle class" began to emerge and take hold. In today's post-Reagan era, American industrialists are harkening back to the pre-Henry Ford days when labor was a mere commodity, the price of which was fungible and should be restrained as if it were just any other commodity. They are supporting laws and regulations to make it more difficult for workers to organize and seek relief. The long term consequences of these actions are the continued erosion of the U.S. economy as wealth is concentrated among fewer and fewer elites and many, if not most, workers no longer can buy the products and services they help create.

June 21, 2011: Are Taxes High or Low? A Further Look

Bruce Bartlett, who held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of both conservative Representatives Jack Kemp and Ron Paul, writes in today's New York Times Economix column about allegations that Americans are overtaxed. Being a true conservative, Mr. Bartlett conveniently fails to cite the tax rates for higher income families (above $75,000/year) whose effective tax rates have declined disproportionately, but what he does say about the effective tax rates paid by low and middle income families (under $75,000) is very telling. As he concludes:

http://economix.blogs.nytimes.com/2011/06/21/are-taxes-high-or-low-a-further-look/?hp

June 20, 2011: AMA Affirms Support for PPACA's "Individual Mandate;" Criticizes Private Health Insurers for 'Errors" in Claims Processing

The American Medical Association's House of Delegates … after a lengthy and sometimes rancorous debate … voted to maintain its support for the Patient Protection and Affordable Care Act’s (“Obamacare” for all you troglodytes out there) individual mandate. At its annual meeting in Chicago this weekend, the nation's biggest doctors' group debated whether to uphold its longstanding support for the "individual mandate." Two federal courts have ruled PPACA’s mandate violates the Constitution, but three others have affirmed it. The Supreme Court ultimately is expected to decide the issue.

Despite an uprising of a smaller but extremely vocal group of physicians, the action, approved by a margin of more than 2 to 1, put the AMA on record as saying such individual responsibility for Americans who can afford to buy coverage is the best option to expand benefits to the uninsured. AMA President Cecil Wilson said the "overwhelming" vote shows that doctors still believe a mandate is necessary to achieving universal coverage.

Also during the organization's meeting, the AMA released its annual "Health Insurer Report Card," detailing a finding that about one in five medical claims paid by insurers is inaccurate, an increase of 2 percent compared to last year and represents an "intolerable level of inefficiency." Barbara L. McAneny, an AMA board member, said in a written statement that health insurers must put more effort into paying claims correctly the first time to save money and administrative time. Most of the private insurers the AMA surveyed failed to improve their accuracy ratings in 2011 compared to 2010, the AMA said.

June 19, 2011: Don't Hire Paul Ryan as Your Mechanic; He's Withholding a Lot of Information About His Plan

If repairing your car cost 18% of your income, would you buy a new car? Of course you would. But now imagine that your mechanic tried to persuade you to keep the jalopy with a clever tax argument: The costs of your annual car tax and registration would decline over time, saving you money. Keep the car long enough and you would save a third of a year's income just in taxes. Sounds good, so far, right?

But wait a second and think about how much more you would pay for repairs as your vehicle ages and breaks down ever more often. Now imagine that your mechanic's savings estimate relied on data that could be analyzed to determine how much of your tax savings would be offset by higher repair costs, but he did not give you those figures. So you do the analysis and find out that for every dollar of tax you save, you would spend $5 to $8 on repairs.

How would you react? Would you laugh out loud at your mechanic? Or get mad? Or walk away in disgust at his lack of candor? Would you not only buy a new car, but also look for a trustworthy mechanic? This analogy describes the "roadmap" for future taxes and spending on Medicare being marketed by House Budget Committee Chaircritter Paul Ryan, TeaParty/GOP-WI and approved by the TeaParty/GOP-controlled U.S. House of Representatives. (The proposed law failed in the Senate by a narrow 3-vote margin.)

Ryan and his fellow TeaParty/Republicans are touting his plan to replace Medicare, the universal healthcare plan for older Americans, with a new form of defined contribution plan, Vouchercare. TeaParty/GOPers would replace universal care with a subsidy for older Americans to pay for health insurance in the private marketplace.

There is not a scintilla of evidence that the private insurance market is clamoring to enroll anyone over age 55 for full medical coverage, especially those with a preexisting condition. Yet TeaParty/GOPers would repeal the 2010 law sponsored by President Obama that requires insurers to take people with preexisting conditions. The TeaParty/Republican plan would save taxpayer dollars, no doubt about it. But it would not save money. In fact, it would add tremendously to total healthcare costs, which now run 18 cents of every dollar in the economy. That is twice what we spent in 1980. Other modern countries spend 9 to 12% of their economy on healthcare and yet manage universal coverage, some with little or no out-of-pocket costs.

The problem is not, as Republicans posit, that taxpayers cannot afford Medicare. The problem is that we cannot afford our existing sick care model with its massive denial of services, loss of productive capacity by injured and sick individuals who get inadequate treatment, and billion-dollar fortunes for the few positioned to scoop up healthcare dollars by selling what should be utterly unnecessary services, like private health insurance. Ignoring decades of actual data showing that health as a business drives costs up, TeaParty/GOPers display their faith in the magic of markets as competitive forces to lower prices. I'm a huge fan of markets, but not all markets lower prices. Some, by design, compete to drive costs up. Health care, like electricity, is one of those markets that tend to reverse competition's higher prices. That is a reason why every other modern country uses a universal healthcare model, some with competitive features, some without.

Applying Congressscritter Ryan's own data to Social Security estimates and to the official Congressional Budget Office data and using the CBO "alternative scenario" that Ryan prefers shows total expected health costs for older Americans and how they would be borne. So what happens if we buy the TeaParty/Republican plan? For those age 55 and older, not so much, at least at first^*. But a lot changes starting in 2022, when today's 54-year-olds turn 65, through 2084, the end of the 75-year period covered by Social Security trustee projections.

^*Current seniors and those over 55 shouldn't rest too comfortably in the TeaParty/GOP "I've got mine, the h#$% with you," mind set. The Ryan plan eliminates many of the protections afforded by PPACA ... and inevitably will lead to future ratcheting down of coverage and benefits to be more comparable to Vouchercare. Republicans pledge to cut billions from current Medicare requirements in order to finance tax cuts for the wealthy.

David Rosnick and Dean Baker, economists at the Center for Economic Policy and Research, crunched the numbers. Whether you like their liberal views or hate them, Rosnick and Baker are just spreadsheet mechanics in this exercise. Reduced to net present value, the TeaParty/Republican plan would save $4.9 trillion in taxes from 2022 through 2084, the numbers reveal. That's not chicken feed. In fact, it is within range of the close to $6 trillion shortfall in Social Security between now and 2084.

But the official data show that private insurers pay providers more than Medicare for the same services. That's because government uses its buyer power -- and political power -- to hold down payments to healthcare providers. Thus, each dollar shifted out of Medicare in to individuals buying private insurance or paying out of pocket buys less health care. So the net present added individual costs would be more than $25 trillion, using the TeaParty/GOP's preferred CBO alternative scenario. Running the numbers using the CBO baseline scenario, the added cost is $39 trillion.

Back out the tax savings, and the net cost is north of $20 trillion using the TeaParty/GOP's preferred and nonstandard baseline and $34 trillion using the standard CBO baseline. So for every dollar Americans would save in taxes, they would shell out $5 more from their own pockets using the TeaParty/GOP's preferred baseline, and nearly $8 using the standard baseline. When you stack a plan in favor of its advocate and the additional costs are five times the savings, like the story of the mechanic trying to keep getting paid for fixing up a clunker, the plan should be greeted with laughter, derision, or disgust. I go for all three -- in that order.

Rosnick and Baker call this net extra spending of between $20 trillion to $34 trillion waste. That's their political judgment. I'll stick to the facts: The TeaParty/GOP plan shifts costs and raises them at the same time. Spending $5 to save $1 is nuts. Spending $8 to save $1 is lunacy.

Hardly anyone knows about the gargantuan added costs because of the way the TeaParty/GOP is marketing the plan. Like our mechanic in the analogy above, the TeaParty/GOP is looking out for their agenda (and that of their for-profit insurance industry overlords) and being deceptive by omission. The idea -- promoted by the TeaParty/GOP as inherent truth -- that market forces will cut costs is absurd. No one lying on a litter in pain from an accident or who was just told they have a cancerous tumor is going to start negotiating price any more than airline passengers are going to cross-examine the pilots on their skill and training. Even if you did, do you have the technical knowledge to compare physicians?

A well-designed modern system also would focus on prevention to minimize preventable chronic conditions and reduce the massively wasteful use of costly technology like MRIs, which are needed for only very limited diagnoses. A modern system would cover everyone. Currently about one in seven has no insurance, and at some time during the year one in four goes uncovered, a situation not found in any other modern country. Universal coverage would cut emergency room costs and provide care for chronic diseases like cancer and diabetes.

Universal coverage would save money -- lots of it. Indeed, if all we did was get universal coverage without the profits, paperwork, and fights over claims denial that are the hallmarks of health care as an insurance business rather than a public service, our federal budget would be in balance soon.

The TeaParty/GOP's plan is to replace universal care for seniors with vouchers to help buy insurance in the private market. Now, it is true that the TeaParty/GOP plan anticipates some adjustments in vouchers based on age and health status, as Furchtgott-Roth observed. But it still leaves a gap. In fact, the Rosnick-Baker analysis shows that by one measure, that gap would be so large that the voucher (fixed at $6,600 in today's dollars) would cover less than a third of the estimated cost of insurance ($20,600 in today's dollars). A senior without the capacity to pay that extra $14,000 would be forced to suffer with inadequate or no health care.

The TeaParty/GOP would halve the federal tax burden of the top 1%, a policy that is as explosive as an economic bomb. For now we need to think about the immorality and higher costs of the TeaParty/GOP's plan -- and the portions embraced by 237 other House Republicans (and 43 Senators) -- not only to destroy Medicare as a universal health plan, but also to slash aid for the powerless.

June 13, 2011: Deep Dark Secret: Private Health Insurance By Definition "Rations" Health Care Based on Income

In case you haven't noticed, the question of "reforming US health care" has been the dominant issue in my professional career over many years. Indeed, my electronic newsletter, the humbly-named "theJeanneScottletter" has been subtitled: "Implementing Health Care Reform" from its first issue almost 19 years ago. The questions of "US health care reform" and "universal health care coverage" have ebbed and flowed over these many years on the political spectrum. Today, the issues of "Medicare insolvency," repealing "Obamacare," and/or enacting "Vouchercare," rank in the top 5 on that spectrum, trailing only "jobs" and the economy. Underlining these debates has always been the sometimes subtle, sometimes overt issue of "health care rationing." Sarah Palin, last year, rose to the top of the political right-wing wacko scale with her cries that the new Patient Protection and Affordable Care Act" (PPACA, or just ACA to its supporters; "Obamacare" to its detractors) would end up "killing granny" by rationing health care services to the elderly.

TeaParty/Republicans now control the U.S. House of Representatives and are only 3 votes shy of taking over the Senate as well. And they have unveiled their plan: VOUCHERCARE. This week, House Majority Whip Eric Cantor (T-Va.) has now, in essence, admitted to the whole world that the House-passed and Senate-blocked (by those very same 3 votes) plan to unravel Medicare and replace it with Vouchercare, will, in essence, promote rationing that would mean some seniors would die for lack of treatment.

Cantor admitted that treatment would be based on the ability to afford different levels of coverage. It was a rather shocking admission - considering that Ryan is still implausibly claiming that his voucher (coupon) approach to Medicare will not cut back on access for seniors. Yet, Cantor's rare candor went all but unnoticed by the corporate mainstream press. The reality is that the TeaParty/Republicans have created the illusion that private medical insurance is universally generous and all-encompassing in its coverage. Nothing, however, could be further from the truth.

Private insurance is as varied as a used car warranty, and most Americans cannot afford medical insurance that is all-encompassing. Private insurance, except for top executives and the wealthiest, is trending toward higher deductibles, more restricted coverage and more vigorous challenge to claims. For most people, even with private, for-profit insurance, health care is rationed right now.

Even for Medicare as we know it, there are restrictions, premiums, deductibles, co-pays, supplemental policies etc. An Associated Press article today notes that many seniors, under Medicare, cannot afford prohibitively priced life-saving drugs.

In short, there is no medical insurance in the United States that does not ration care, and Medicare, in fact, is the fairest, regardless of income. As I have noted repeatedly in my presentations, particularly over the past 3-4 years, Medicare is far cheaper to run than private health insurance. True Medicare faces a near term insolvency, around 10 years, but that is because the effective rates that Medicare can charge seniors (both in the FICA/Medicare tax rate that is supposed to pay for Medicare Part A, and in the premiums seniors are charged for Medicare Parts B and D) have been frozen or capped in the low single digits. Private insurance companies, on the other hand, are making record profits in part by raising annually the premium rates they charge employers and individuals, by double-digits. If Medicare could raise it rates by the same factors, Medicare would be solvent and maybe even returning a profit to the federal government just as these private insurers are making today. But for most middle-income Americans, that's not what we want from our health care system.

Cantor and Ryan believe that the wealthy are entitled to more extensive, life-saving and routine health care, because they have earned it. But the health of a nation is dependent upon the health of its people, and not just its largest income earners.

June 9, 2011: TeaParty/GOP "Claims" About Vouchercare, Better Describe PPACA

The budget proposal passed by the House of Representatives in April, which replaces Medicare with a new Vouchercare, is proving unpopular with the American people. Some supporters attribute the poor poll numbers to a “communications challenge,” and they’ve continued to defend the Vouchercare proposal using arguments that better describe the Patient Protection and Affordable Care Act (PPACA), the comprehensive health reform legislation passed last year.

The GOP Plan Does Not Offer Benefits Similar to Those Members of Congress Enjoy; the Patient Protection and Affordable Care Act Does

Claim: Instead of the traditional Medicare benefit, those born after 1956 would receive “the same kind of health-care program that members of Congress enjoy” under the GOP budget.

Fact: Under the TeaParty/GOP budget proposal, Medicare beneficiaries would end up receiving a shrinking amount of support from the government, shifting more of the costs onto seniors, whereas members of Congress receive a consistent level of government support. The TeaParty/Republican budget ends the guaranteed Medicare benefit for those born after 1956. In its place, beneficiaries would receive government support, or a voucher, to help purchase a private plan. Unlike the federal employee/Congressional health plan, the value of the Vouchercare voucher would increase with general inflation, but not as fast as health care costs are inflating. The Congressional health plan is adjusted annually to reflect the actual increase in health care costs. The result: by 2022, the average senior on Vouchercare would find themselves short by about $6,000-8,000 a year in additional out-of-pocket health care costs beyond the value of their voucher compared to traditional Medicare ... and this gap would increase every year beyond that! In truth, the Patient Protection and Affordable Care Act assures every American of coverage similar to Congressional coverage in at least 14 areas. The TeaParty/GOP Vouchercare plan would repeal these and offers no substitutes in their place:

Affordable health coverage
Guaranteed coverage regardless of pre-existing conditions
A right to appeal claims denied by insurers
Protection against discriminatory premiums due to pre-existing conditions
A complete package of health insurance benefits
Guaranteed coverage that can’t be taken away
A prescription drug benefit with no coverage gap
Protection against catastrophic health care costs
A choice of easy-to-compare health insurance plans
Protection against unreasonable premium increases
Fair and equal premiums for women
Coverage for early retirees
Access to free or low-cost preventive services
Access to affordable care at clinics

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The Patient Protection and Affordable Care Act Extends the Life of Medicare While the House Republican Budget Ends It

Claim: The TeaParty/GOP House budget “saves” Medicare while the Patient Protection and Affordable Care Act would bankrupt it.

Fact: The House plan takes away guaranteed benefits and makes seniors pay more for their health care. The Affordable Care Act keeps guaranteed benefits and works to make the program more efficient and reduce costs. In reality, the TeaParty/GOP plan takes away guaranteed benefits and makes seniors pay more for their health care, while offering nothing to reduce future increases in the costs of health care. PPACA keeps the promised guaranteed benefits for seniors and extends them to all while at the same time working to make both the Medicare program and the nation's health care delivery system more efficient and reduce costs.

While the TeaParty/GOP Vouchercare plan simply passes the burden of future cost increases on to seniors, PPACA takes another approach to control rising health care costs. It maintains the traditional guaranteed Medicare benefits instead of ending the program for future beneficiaries. The law makes Medicare more efficient and finds savings in the program while maintaining benefits for seniors. It does this in two key ways.

First, it ends overpayments to insurance companies in the Medicare Advantage program. Before, the government was paying insurance companies participating in Medicare Advantage roughly 14 percent more for the same benefits in Medicare.

Second, it makes changes in payments to providers, including slower growth rates for hospital payments. These changes have strengthened the Medicare trust fund. Last week, the Social Security and Medicare Trustees released their report showing the Affordable Care Act extended the life of the Medicare hospital insurance trust fund by eight years.

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The Patient Protection and Affordable Care Act Is Better for Low- and Middle-Class Seniors than the House Budget

Claim: The House budget better serves low- and middle-class families.
Fact: The TeaParty/GOP Vouchercare budget makes these families worse off, while PPACA protects Medicare and Medicaid.

The House budget shifts costs to low-income seniors while giving huge tax cuts to the wealthy

In a speech at the Economic Club of Chicago, Rep. Paul Ryan (R-WI), the author of the House Republican budget, said the Medicare proposal provides “less help for the wealthy, and more help for the poor and the sick.” Karl Rove echoed this claim writing, “Bill Gates should bear a greater share of his health-care costs than the less healthy or less wealthy.”

Does this mean lower- and middle-class seniors are better off under the Republican budget than under the traditional program? No, quite the contrary.

The TeaParty/GOP Vouchercare budget ends Medicare for those born after 1956 and replaces it with government support, or a voucher, to help purchase a private plan that increases at the rate of inflation. The nonpartisan Congressional Budget Office found that a typical 65-year-old in 2022 would pay double what they would pay under the traditional Medicare program, or $6,000-$8,000 more. The value of the voucher would shrink over time as health care costs increase faster than inflation, meaning more moderate income beneficiaries will pay more out of pocket. And while wealthier seniors would see their out-of-pocket costs rise slightly faster, they would not feel the impact as severely as middle income seniors and families.

In addition to ending Medicare, the TeaParty/GOP Vouchercare budget slashes Medicaid, the program that serves low-income children, seniors, and people with disabilities, and converts it into a block-grant program. According to the Center on Budget and Policy Priorities, the House budget would “eliminate the coverage for health services … that Medicaid currently provides to low-income seniors and people with disabilities on Medicare. It also would eliminate the assistance that Medicaid provides with Medicare’s premiums and cost-sharing charges.” Instead, the budget provides a $7,800 health savings account for each Medicare beneficiary with income up to the poverty line. But this amount is not enough to keep up with the cost of care to these low-income beneficiaries.

Further, the effect of a block grant that caps federal spending jeopardizes access to long-term services and supports at home as well as in nursing homes, which are so important for so many seniors and people with disabilities. The result is a huge cost shift onto the most vulnerable. Taking into account the added support based on income in the budget proposal, the Center on Budget and Policy Priorities found that a typical 65-year-old living at the poverty line would still pay $4,700 more than under Medicare as it exists today.

What about the wealthy? It is true that the TeaParty/GOP Vouchercare budget’s cost shift to seniors hits everyone across the income spectrum and shifts even more of the cost to wealthier people. But for wealthy people the budget makes up for the shift with a huge tax cut. It lowers the top marginal income tax rate by 10 percentage points, to 25 percent, bringing it to the lowest rate since under President Herbert Hoover. (And we all know what happened after that <sigh>.)

The Patient Protection and Affordable Care Act also makes wealthier seniors pay slightly more

House TeaParty/Republicans need look no further than PPACA if they want the Bill Gateses of the world to bear more of their health care costs and if they want to provide more assistance to lower- and middle-income seniors. The law protects Medicare and Medicaid, which provide services to middle-class seniors at a lower cost than under the TeaParty/GOP Vouchercare budget. In addition, the law tightens and extends “requirements that higher income beneficiaries pay higher premiums” that were already on the books. Wealthier seniors have been paying higher Medicare Part B premiums for physician and other professional services since 2007, under provisions in the 2003 Medicare Modernization Act (the law passed by a Republican Congress, signed by a Republican president, without a single Democratic vote, using a little-known Congressional device known as "reconciliation," in the middle of the night after holding the House floor vote open for hours past the usual 15 or 30-minute time limit on House voting... but who's counting?) PPACA also establishes a new income threshold for the Medicare Part D prescription drug program. That means wealthier seniors on Medicare will pay a higher premium for their medications.

Claims that the TeaParty/GOP Vouchercare budget provides more help to lower-income seniors while asking wealthier seniors to pay more are disingenuous. First, the budget makes low-income seniors worse off by shifting the burden of higher Medicare costs onto them and cutting the Medicaid cushion. Second, the budget includes a huge tax cut for the rich that brings the top marginal tax rate to the lowest since before the Great Depression. On the other hand, the Patient Protection and Affordable Care Act protects Medicare and Medicaid for low- and middle-class seniors while asking wealthier seniors to pay more in premiums for health care and prescription drugs.

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The Patient Protection and Affordable Care Act Protects Patient Choice While the TeaParty/GOP Vouchercare Budget Rations Care

Claim: The House budget protects patient choice while the Affordable Care Act will lead to a rationing of care.
Fact: The TeaParty/GOP Vouchercare budget ends Medicare and replaces it with a voucher program, which will lead to more seniors having to forgo care or pay more.

'Nuf Said

June 8, 2011: The TeaParty/GOP/Ryan "Medicare/Vouchercare" Plan

June 8, 2011: No, You Can't Keep Your Health Insurance (Says Orly Taitz, er I mean, Grace-Marie Turner)

This morning's Wall Street Journal has an op-ed article, (by Grace-Marie Turner, the "Orly Taitz" of PPACA nay-sayers) predicting in effect that the Patient Protection and Affordable Care Act, or as WSJ likes to name it, Obamacare, will lead to a dramatic decline in employer-provided health insurance ... with as many as 78 million Americans forced to find other sources of coverage. This disturbing finding is based on my calculations from a survey by McKinsey & Company. The survey, published this week in the McKinsey Quarterly, found that up to 50% of employers say they will definitely or probably pursue alternatives to their current health-insurance plan in the years after the Patient Protection and Affordable Care Act takes effect in 2014.

Well gosh dern it, what's so new about employers changing their employee health plans ... or even eliminating them altogether ??? They've been doing that for years now, pre-Obamacare, and at an accelerating rate. Obama probably regrets his now (in)famous quote, "you'll get to keep your current coverage if you want it," during the build-up to the Congressional passage of PPACA in 2010. But as far as it goes, the quote is accurate. By 2017, the Health Care Exchanges, a key element in PPACA, will be open to all comers, large employers as well as small and the non-group market. Under PPACA's insurance industry reforms (which Orly, er, I mean Grace-Marie conveniently neglects to mention) many of the insurer abuses which have forced employers in the past to frequently change or re-write their existing employee health plans, will be eliminated.

These Exchanges themselves, derided by the likes of Grace-Marie Turner and other PPACA institutional nay-sayers were once the darling off conservative Republicans and are currently a key component in the TeaParty/GOP House-passed "vouchercare" plan. Under vouchercare, future Medicare beneficiaries will buy their health insurance through an Exchange. Glory of glories, the ultra right wing Heritage Foundation, a leading PPACA nay-sayer, once described the Romney-version of the health care exchange (The Massachusetts Connector) as "an innovative mechanism to promote real consumer choice," but now calls the virtually identical PPACA-version as creating a “de facto public option” by “grow[ing]” government control over health care.” Which is it? Oh wait, this is the one promoted by Obama, a progressive, never mind that he stole it almost verbatim from the old Republican playbook, this must mean the virtual end of civilization as we know it. The even more conservative, Cato Institute has gone so far as to begin advocating employers getting out of the health insurance business altogether:

"Americans have relied on employers for their health insurance coverage for 50 years, but that relationship may be coming to an end. Employers are unhappy with the growing number and cost of mandates and regulations. Employees are unhappy with the constraints of managed care, the lack of portability, and the limited choices available to them. Physicians are unhappy with the interference with the way they practice medicine. Politicians are unhappy that the numbers of uninsured are growing even in times of prosperity. How can the system be reformed to be more responsive and more cost-effective?"

See: Cato Institute Policy Forum: http://www.cato.org/pubs/policy_report/v21n5/healthcare.html

But now it's a bad idea? Employers have been changing, re-writing and raising the employee share of the health insurance expense for years, not because of PPACA, but because employee coverage is a burden on their profits. Many employers have moved off-shore principally because of this cost. Contrary to Grace-Marie Turner's WSJ op-ed, and the McKinsey "study" employer changes in the health care coverages for their employees is a long-standing and accelerating practice. How convenient it must be to have PPACA around to blame it on.

And is dropping coverage altogether a "real" alternative? Not really, under PPACA their are substantial monetary penalties for any such action, penalties that are doubled if the employee who might lose coverage would qualify for a PPACA subsidy, go on Medicaid or have their children covered by CHIP.

As I noted in my Friday the 13th , blog entry, conservatives have a strong ally in PPACA, in helping their employees to understand and be more responsible for their own health care. Encouraging high-deductible health coverages is part and parcel of their derided "Obamacare." If they actually understood the law, instead of relying on the likes of Grace-Marie "Orly" Turner to explain her version of it to them, they would, as many doctor groups and more progressive employer organizations are doing ... embrace the law ... and dedicate themselves to proposals not to repeal it, but to make it stronger and better.

As the chart below illustrates, employers have been changing their plans long before the introduction of "Obamacare." What the chart doesn't show is the decline in the number of employers offering their employees some coverage. That too has gone down every year, pre-"Obamacare."

June 6, 2011: Vouchercare Does Mean the END of Medicare (Paul Krugman, NYT)

Today's Column by Nobel-prize winning economist Paul Krugman in the New York Times:

Vouchercare Is Not Medicare

What’s in a name? A lot, the National Republican Congressional Committee obviously believes. Last week, the committee sent a letter demanding that a TV station stop running an ad declaring that the House Republican budget plan would “end Medicare.” This, the letter insisted, was a false claim: the plan would simply install a “new, sustainable version of Medicare.”But Comcast, the station’s owner, rejected the demand — and rightly so. For Republicans are indeed seeking to dismantle Medicare as we know it, replacing it with a much worse program.

I’m seeing many attempts to shout down anyone making this obvious point, and not just from Republican politicians. For some reason, many commentators seem to believe that accurately describing what the G.O.P. is actually proposing amounts to demagoguery. But there’s nothing demagogic about telling the truth.

Start with the claim that the G.O.P. plan simply reforms Medicare rather than ending it. I’ll just quote the blogger Duncan Black, who summarizes this as saying that “when we replace the Marines with a pizza, we’ll call the pizza the Marines.” The point is that you can name the new program Medicare, but it’s an entirely different program — call it Vouchercare — that would offer nothing like the coverage that the elderly now receive. (Republicans get huffy when you call their plan a voucher scheme, but that’s exactly what it is.)

Just Between You and Jeanne: I interrupt Prof. Krugman at this point to stress one additional point: TeaParty/GOPers claim that those of us already on Medicare, or past the age of 55 needn't worry, there will be no change in the current program for us. To use my favorite derogative, "Bull-Hockey!" They have been trying to undermine traditional Medicare ever since the first day that it went into effect, January 1, 1966. If they can't outright repeal it (they called it socialized medicine then and said it would destroy American health care; which of course it hasn't -- albeit it has enriched physicians who have seen their incomes rise more than 20-fold in the 45 years since, while the rest of American wage earners have seen income increases in the range of 10-fold, which in "real" inflated dollars is but a modest growth. The only ones doing better than the docs are corporate execs.) Assuming "vouchercare" becomes law in 2013, under President Sarah Palin (or President Michelle Bachman, Tim Pawlenty, Mitt Romney, or whomever the TeaParty nominates), traditional Medicare would be next on the hit list. The concept of a two-tiered social contract just won't work in the real politick world.)

Medicare is a government-run insurance system that directly pays health-care providers. Vouchercare would cut checks to insurance companies instead. Specifically, the program would pay a fixed amount toward private health insurance — higher for the poor, lower for the rich, but not varying at all with the actual level of premiums. If you couldn’t afford a policy adequate for your needs, even with the voucher, that would be your problem.

And most seniors wouldn’t be able to afford adequate coverage. A Congressional Budget Office analysis found that to get coverage equivalent to what they have now, older Americans would have to pay vastly more out of pocket under the Paul Ryan plan than they would if Medicare as we know it was preserved. Based on the budget office estimates, the typical senior would end up paying around $6,000 more out of pocket in the plan’s first year of operation.

By the way, defenders of the G.O.P. plan often assert that it resembles other, less unpopular programs. For a while they claimed, falsely, that Vouchercare would be just like the coverage federal employees get. More recently, I’ve been seeing claims that Vouchercare would be just like the system created for Americans under 65 by last year’s health care reform — a fairly remarkable defense from a party that has denounced that reform as evil incarnate.

So let me make two points. First, Obamacare was very much a second-best plan, conditioned by perceived political realities. Most of the health reformers I know would have greatly preferred simply expanding Medicare to cover all Americans. Second, the [Patient Protection and] Affordable Care Act is all about making health care, well, affordable, offering subsidies whose size is determined by the need to limit the share of their income that families spend on medical costs. Vouchercare, by contrast, would simply hand out vouchers of a fixed size, regardless of the actual cost of insurance. And these vouchers would be grossly inadequate.

But what about the claim that none of this matters, because Medicare as we know it is unsustainable? Nonsense.

Yes, Medicare has to get serious about cost control; it has to start saying no to expensive procedures with little or no medical benefits, it has to change the way it pays doctors and hospitals, and so on. And a number of reforms of that kind are, in fact, included in the [Patient Protection and] Affordable Care Act. But with these changes it should be entirely possible to maintain a system that provides all older Americans with guaranteed essential health care.

Just Between You and Jeanne: I interrupt Prof. Krugman again, to note that President Obama and key Democrats have already introduced proposed amendments to strengthen the cost-control mechanisms in PPACA. Under one Obama proposal, the authority of the Independent Payment Advisory Board (IPAB) would be expanded and many of its powers under the law would be expanded.

Consider Canada, which has a national health insurance program, actually called Medicare, that is similar to the program we have for the elderly, but less open-ended and more cost-conscious. In 1970, Canada and the United States both spent about 7 percent of their G.D.P. on health care. Since then, as United States health spending has soared to 16 percent of G.D.P., Canadian spending has risen much more modestly, to only 10.5 percent of G.D.P. And while Canadian health care isn’t perfect, it’s not bad.

Canadian Medicare, then, looks sustainable; why can’t we do the same thing here? Well, you know the answer in the case of the Republicans: They don’t want to make Medicare sustainable, they want to destroy it under the guise of saving it.

So in voting for the House budget plan, Republicans voted to end Medicare. Saying that isn’t demagoguery, it’s just pointing out the truth.

June 4, 2011: Transparency at Last ... Maybe

Medicare officials have scheduled the release of a proposed rule that would make claims data available that analysts can use to evaluate the performance of doctors, hospitals, and other providers. For years, those who measure the quality of providers' care or rate their performance have been frustrated because they haven't been able to get Medicare data for their reports. In the past, they've relied on information from private health plans. Under the proposed rule, groups who prepare these analyses would be able to combine Medicare information with private insurance claims data and provide more complete public reports about which physicians and hospitals provide the best care. Transparency at last! … Maybe.

Over the past decade, a wide range of groups have begun evaluating providers' performance in order to help consumers, employers and others choose the most cost-effective and highest-quality providers. Some groups that might be interested in using the Medicare data in their reports include the Pacific Business Group on Health, the Indiana Health Information Exchange, and the Robert Wood Johnson's Aligning Forces for Quality initiative.

"Performance reports that include Medicare data will result in higher quality and more cost effective care," said Donald M. Berwick, administrator of the Centers for Medicare and Medicaid. "And making our health care system more transparent promotes competition and drives costs down."

Niall Brennan, acting director in the Policy and Data Analysis Group in the CM² Center for Strategic Planning, said in an interview that the proposal fits in with the administration's overall aim of improving the quality of health care for seniors. Under Berwick, CM² officials have launched several initiatives in recent months that would encourage hospital officials or other providers to measure the quality of the care they are offering. Brennan, who helped develop the rule, noted that the proposal would allow providers a chance to see the information before it is published and request corrections. CM² officials hope that the new policies and access to Medicare data will lead to more trustworthy information about providers that consumers and others can rely on.

Jeanne’s Note: Dr. Berwick and Mr. Brennan hold their positions… perilously. President Obama was forced to use a recess appointment for Dr. Berwick as TeaParty/Republicans refused to hold a vote on his appointment; and Mr. Brennan has been held in the “acting” position for much the same reason. While Republicans, especially George W. Bush's last Secretary of Health and Human Services. Michael Leavitt, talked often about "transparency" and the need to make information available for improved consumer choices, providers, particularly physicians, have mostly opposed making this type of information more readily available to the public. The proposed Obama rule will limit availability to "appropriate" health policy analysts. TeaParty/GOPers have taken a lot of money from providers.

"Making Medicare data available will make it easier to make smart decisions about health care," Brennan said. The rule includes strict privacy and security requirements in order to reduce the risk that patients' personal health information could be exposed. The Business Roundtable responded to the proposal with a statement calling the rule "a key step in addressing rising health care costs for all Americans and marks another positive milestone toward ensuring consumers have timely and accurate information on health care costs and quality."

"Business Roundtable CEOs have long called for the release of Medicare claims data so all consumers can know how much their health care costs and the quality of their providers," said the statement.

"The actions by CMS [sic: CM^2]today, along with congressional efforts and legal actions to obtain the data, are all critical. There is no reason why government data should not be available to ensure consumers have access to actionable and accurate information for their health care choices. In fact, it is long overdue."

The proposed regulation is expected to be published in the Federal Register on June 8 and will have a 60-day comment period.

June 3, 2011: TeaParty/Republicans Don't Believe That Taxes Were HIGHER Under Ronald Reagan

President Obama met with House Republicans Wednesday at the White House to discuss ways to move forward on negotiations regarding the nation’s debt ceiling and the budget. During the discussion, talk evidently turned to taxes, and when Obama noted that taxes today are lower than they were under President Reagan, the GOP, according to The Hill, “engaged in a lot of ‘eye-rolling’“:

Republicans attending a White House meeting on Wednesday didn’t take kindly to President Obama telling them tax rates were higher during the Reagan administration. GOP members engaged in a lot of “eye-rolling,” according to a member who was on hand to hear Obama, who invited House Republicans to the White House for discussions on the debt ceiling. [...]

“[The President] made a comment like the tax rate is the lightest, even more than (under former President) Reagan,” Rep. Lee Terry (R-Neb.) told The Hill following the meeting. House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) joked that during the meeting, “We learned we had the lowest tax rates in history … lower than Reagan!”

That House Republicans find this preposterous is symptomatic of the hold Reagan mythology has over them. After all, for seven of Reagan’s eight years in office, the top tax rate was higher than the current 35 percent. In six of those years, it was 50 percent or more. And every year that Regan was in office, the bottom tax bracket was higher than the current ten percent.

For a family of four, the “average income tax rate under Reagan in 1983 was 11.06 percent. Under Clinton in 1992, it was 9.18 percent. And under Obama in 2010, it was 4.68 percent.” During Reagan’s time, income tax revenue ranged from 7.8 to 9.4 percent of GDP. Last year, it was 6.2 percent and is not projected to climb back to 9 percent until 2016. In fact, in 2009, Americans paid their lowest taxes in 60 years.

Republicans are very fond of saying that the U.S. has “a spending problem, not a revenue problem.” But the truth is that revenue has plunged due to the recession and to continued misguided tax cuts, and revenue needs to be raised to eventually bring the budget into balance. And Reagan knew that taxes were an important part of the budget equation. After all, he “raised taxes in seven of his eight years in office,” including four times in just two years

June 2, 2011: New PPACA Regs Could Unlock Entrepreneurship

"You're not thinking in terms of taking risks, you're thinking in terms of the security the job offered through health insurance."

… Arthur Holst, a discouraged would-be entrepreneur in Pennsylvania, forced to seek a job with employer-sponsored health coverage, because a pre-existing condition made him virtually insurable if he struck out on his own.

The following is excerpted from a blog posting by John Arensmeyer, founder and CEO of the “Small Business Majority” a national nonpartisan organization founded and run by small business owners, that brings the voices of America’s 28 million small businesses to the public policy table.

Jeanne’s Introduction: Perhaps unintended, but definitely now on the minds of lots of budding entrepreneurs, the Patient Protection and Affordable Care Act (“Obamacare” to all the troglodytes out there) may be an opening to new business development and economic growth. One of the major roadblocks to any new business has been the lack of affordable and guaranteed health insurance… especially for those with existing health problems. Before he'd even graduated from college, Arthur Holst knew he was destined to work for a big organization. Not because the corporate culture called to him or because he had an undying love for cubicles, but because at age 19 he had a kidney transplant.

… He had to work somewhere that offered good health benefits because that was the only way he was going to get the insurance he needed to survive. Starting his own company and running the risk of being denied insurance because of his health condition was not an option. Many years later, the Pennsylvanian is happy working for the city of Philadelphia, but he would have preferred to have the option of striking out on his own and starting a business -- something he could have done if the Pre-Existing Condition Insurance Plan (PCIP) program enacted under PPACA had been in place.

These plans allow individuals with a preexisting condition to obtain health insurance if they're denied coverage.

On Tuesday, the U.S. Department of Health and Human Services beefed up the program to make it more affordable and easier to participate in. And although it's too little too late for Arthur, there are many people out there just like him who will now have the option to see where their entrepreneurial spirit takes them.

The PCIP program is run by the Department of Health and Human Services in 17 states and by state governments in the rest. Thanks to the regulations issued on Tuesday, premiums in the states where the federal government administers the plans will drop, some by as much as 40 percent, and eligibility requirements will become less stringent. Instead of requiring applicants to submit rejection letters from insurance companies to prove their eligibility, they can now use a doctor's note to verify their status.

America prides itself on being the land of entrepreneurialism, yet the act of denying people coverage for a preexisting condition discourages that tradition. When someone has a great idea or invention and wants to start a new business, but is forced to stay in their current job to keep health benefits, the potential for a new business flies out the window. This scenario, often referred to as "job lock," costs our economy startup opportunities and job growth.

Small business owners Marsha and Russell Geist, owners of Metropolitan Landscape Management in Dayton, MD, would have found themselves in exactly this situation if Maryland hadn't been ahead of the curve when it comes to preexisting condition bans. Both Marsha and Russell worked for the federal government while they were starting their landscape business, but were able to quit their government jobs and focus full-time on their start-up. However, Russell had medical issues, including a benign brain tumor, which landed him in the preexisting condition group. If Maryland hadn't banned denying coverage based on preexisting conditions in the 1990s, Marsha would have had no choice but to continue working for the government to maintain their insurance instead of joining her husband.

"It would have directly affected the growth of our business," Marsha said. "Maryland was very proactive in making that change."

Small business employees are also the frequent victims of coverage denial based on preexisting conditions. Small business owner Rick Poore, proprietor of Shirts 101 in Lincoln, NE, spent a tremendous amount of time trying to get one of his 29 employees who suffered from pancreatitis onto his company's group plan. If Rick had put the employee on the group plan, the costs would have skyrocketed, and it was likely the carrier would drop them altogether. Eventually, Rick was able to get his worker on the company plan without breaking the bank, but it was time and money that Rick could have spent running his business instead of jumping through one insurance hoop after another.

The U.S. Department of Health and Human Services made the right decision to lower premium costs and make it easier for people to join these much-needed programs. These new regulations will make it easier for employees like Rick's and would-be entrepreneurs like Arthur to get the coverage they need while working in the jobs they love.

June 2, 2011: Medicare's "NEVER EVENTS" Rule Extended to Medicaid

Medicaid will stop paying for about two dozen "never events" in hospitals, such as operations on the wrong bbody part and certain surgical-site infections, federal officials said today. Currently, about 21 states have such a nonpayment policy. The Patient Protection and Affordable Care Act of 2010, now in effect, expands the ban nationwide. The rule published today gives states until July 2012 to implement it. Under the rule, Medicaid funds can’t be used to pay doctors and hospitals for services that "result from certain preventable health care-acquired illnesses or injuries," the officials said. A similar regulation has been in place for Medicare, the federal health program for the elderly, since 2008.

"These steps will encourage health professionals and hospitals to reduce preventable infections, and eliminate serious medical errors," said Donald Berwick, administrator of the Centers for Medicare and Medicaid Services (CM²). "As we reduce the frequency of these conditions, we will improve care for patients and bring down costs at the same time."

Some physician groups have concerns about the new policy. "Simply not paying for complications or conditions, that, while extremely regrettable, are not entirely preventable, is a blunt approach that is not effective or wise for patients or the Medicare or Medicaid program," Dr. Michael Maves, CEO of the American Medical Association, said in written comments to CM² in March. He said the medical association has "grave concerns" about states extending the non-payment policy beyond the conditions considered by Medicare.

Responding to complaints from hospitals, CM² gave states additional time -- until July 2012 -- to implement the new policy. Cindy Mann, deputy director of CM² and director of Medicaid, said the rule gives states the option to expand the nonpayment policy to health care settings besides hospitals and to add other types of "never events."

She said the policy would help improve patient care and drive down costs in the $364 billion program. "All (health care) payers are looking to gain better value for the dollars they spend and Medicaid is no different," she said.

But the costs savings from the change is relatively modest. According to the proposed rule, Medicaid would save about $35 million over the next five years from stopping pay for such medical mistakes. Medicare has saved about $20 million a year under its policy.

The following is a list of preventable conditions that Medicaid will no longer pay for, assuming the patient did NOT have this condition upon entering the hospital:

· Foreign Object Retained After Surgery

· Air Embolism

· Blood Incompatibility

· Stage III and IV Pressure Ulcers

· Falls and Trauma

· Fractures

· Dislocations

· Intracranial Injuries

· Crushing Injuries

· Burns

· Electric Shock

· Catheter-Associated Urinary Tract Infection (UTI)

· Vascular Catheter-Associated Infection

· Manifestations of Poor Glycemic Control

· Diabetic Ketoacidosis

· Nonketotic Hyperosmolar Coma

· Hypoglycemic Coma

· Secondary Diabetes with Ketoacidosis

· Secondary Diabetes with Hyperosmolarity

· Surgical Site Infection Following:

· Coronary Artery Bypass Graft (CABG) - Mediastinitis

· Bariatric Surgery

· Laparoscopic Gastric Bypass

· Gastroenterostomy

· Laparoscopic Gastric Restrictive Surgery

· Orthopedic Procedures

· Spine

· Neck

· Shoulder

· Elbow

· Deep Vein Thrombosis (DVT)/Pulmonary Embolism (PE) Following Total Knee Replacement or Hip Replacement – with pediatric and obstetric exceptions

· Surgery on the wrong patient, wrong surgery on a patient, and wrong site surgery

June 2, 2011: IOM Report: Big Flaws in How Medicare Pays Hospitals, Doctors

Although Medicare is a national program, it adjusts payments to health care providers to reflect regional differences in wages, rent and other costs. Thus providers in many “expensive areas” in the country are paid higher reimbursement amounts than in other, primarily rural areas, but not always, says the IOM panel. But a prestigious panel says Medicare’s methods of evaluating regional costs are disturbingly imprecise and need to be overhauled.

Experts, convened by the Institute of Medicine have issued an interim report saying Medicare needs to make a "significant change" to the ways it evaluates salaries of health care workers and real estate costs. Major changes to these calculations would affect the bottom lines of thousands of practitioners and institutions, but the report did not gauge the impact.

"The Medicare program needs more precise and objective tools and methods to assure the nation that the billions being spent are appropriately and fairly disbursed," said committee chairman Frank Sloan, a Duke University health policy and economics professor, in a statement accompanying the report.

"As the criticism we heard from a range of health care providers indicates, there is significant skepticism about the fairness and accuracy of how adjustments are currently being determined. This report’s recommendations will increase the likelihood that the geographic adjustments reflect reasonably accurate measures of regional differences in expenses," he added.

If all its recommendations were adopted, they would represent the biggest transformation in Medicare’s geographic payment adjustments in two decades, said Bruce Steinwald, an independent consultant and member of the panel. Steinwald said in an interview that the current system "is inaccurate enough that the committee felt fairly substantial changes were warranted."

Because of the payment system, doctors in many urban areas tend to be underpaid and some physicians in rural areas are overpaid, according to a 2007 report by the Government Accountability Office. The report found that doctors in one in every eight counties were overpaid by 5 percent or more.

Accurately calculating regional cost differences is considered essential as Medicare prepares to revamp the way it pays hospitals.

Starting in October 2013, Medicare plans to take the amount hospitals spend per beneficiary into account when setting reimbursements. That approach, incorporated in the health care overhaul, is intended to reward hospitals that treat patients efficiently.

Some health care researchers, led by those at the Dartmouth Institute for Health Policy and Clinical Practice, have asserted that big disparities in regional Medicare spending are evidence that hospitals and doctors in some regions provide unnecessary medical treatments. But providers in high-spending areas say they are costlier places to do business. Another Institute of Medicine committee is studying that issue.

Health and Human Services Secretary Kathleen Sebelius asked the IOM, a division of the National Academy of Sciences, that advises the government, to assemble the panel. Its report pinpointed a number of ways that Medicare’s methods are too imprecise. [See IOM's original charge to the ad hoc committee in the block below.] For instance, Medicare divides the country into 89 payment areas when setting reimbursements for doctors. But the panel found those areas were so broad that some lumped together expensive urban regions with less expensive outlying areas.

The panel also recommended Medicare alter the 441 labor markets it uses for setting hospital payment areas. At present, the panel noted, 40 percent of hospitals successfully petition Medicare to be shifted into other areas to get higher payment rates.
Medicare, the report said, also should:

• Stop relying on hospital reports to calculate regional wages for health care workers and instead use data from the Bureau of Labor Statistics.

• Broaden how it measures hospitals’ and doctors’ business costs. In addition to salaries of traditional employees such as doctors and nurses and administrative assistants, Medicare should factor in what hospitals pay the increasing number of other professionals now being employed -- information technology and computer experts, for example.

********

The Kaiser Family Foundation has posted an interactive map outlining differences by regional in Medicare payments:

http://www.kaiserhealthnews.org/Graphics/2010/interactive-map-Medicare-reimbursements-per-enrollee.aspx

********

THE ORIGINAL CHARGE TO THE IOM AD HOC STUDY COMMITTEE

An ad hoc committee will conduct a comprehensive empirical study on the accuracy of the geographic adjustment factors established under sections 1848(e) and 1886(d)(3)(E) of Title XVIII of the Social Security Act and used to ensure Medicare payment fees and rates reflect differences in input costs across geographic areas. Specifically, the committee will:

▪ Evaluate the accuracy of the adjustment factors;

▪ Evaluate the methodology used to determine the adjustment factors;

▪ Evaluate the measures used for the adjustment factors for timeliness and frequency of revisions, for sources of data and the degree to which such data are representative of costs, and for operational costs of providers who participate in Medicare.

Within the context of the U.S. health care marketplace, the committee will also evaluate and consider:

▪ The effect of the adjustment factors on the level and distribution of the health care workforce and resources, including: recruitment and retention taking into account mobility between urban and rural areas; ability of hospitals and other facilities to maintain an adequate and skilled workforce; and patient access to providers and needed medical technologies;

▪ The effect of adjustment factors on population health and quality of care;

▪ The effect of the adjustment factors on the ability of providers to furnish efficient, high value care.

June 1, 2011: Hannah's Cartoon

Stop the madness.

May 31, 2011: Fact Checking: Pat Boone (and 60 Plus) On The Ryan Plan

As some Republicans distance themselves from the unpopular House-passed budget that would radically change the Medicare program, the ultra-conservative seniors group 60 Plus isn’t backing off. If anything, it is injecting new energy ... and lots of right-wing Koch-brother-type billionaire money ... into its defense of the TeaParty/Republican plan. 60 Plus has retained the Black Rock Group, a public relations firm, to keep its message in focus. And 60 Plus’ celebrity spokesman, crooner Pat Boone, today released a statement promising to “lace up my white shoes and spread the news far and wide that this administration is trying to mislead and scare seniors.”

The TeaParty/Ryan-Medicare proposal would raise the eligibility age to 67 and convert the program from a government-run, guaranteed-benefit system to one in which seniors get what amounts to a “voucher” … a set amount of money as a credit they can use to go out and buy health insurance from a virtually unregulated, for-profit, private health insurance system. An we all know what a good job those folks have been doing with near annual double-digit rate increases.

But as the mudslinging grows intense over the Medicare proposal, which was crafted by House Budget Committee Chaircritter Paul Ryan, T-Wis., polls show that the public is confused, which is, of course, the primary goal of groups like 60 Plus.

Indeed, while the rhetoric from Democrats would have seniors believe that the plan would destroy Medicare, 60 Plus and other Koch-brothers financed supporters say it would save the program. Here’s a look at some of Boone’s claims.

The claim: "Rep. Ryan’s budget will not end Medicare. Instead, it will preserve the offerings of this program for our children and grandchildren."

Closer look: The program that currently provides health care coverage to 47 million older and disabled people would be fundamentally altered, as Nobel-economist Paul Krugman recently put it, it would be “Medicare in name-only.” Call it whatever you want, it would no longer be “Medicare” as most people understand that term. Kiss Medicare god-bye! Currently, traditional Medicare covers most of the cost of whatever services patients use. Under the TeaParty/Ryan plan, seniors would get a set amount of money to buy private insurance, which by 2022 would not even come close to covering the same benefits that Medicare currently provides. While on the face of it, these changes wouldn't apply to those now 55 and older, in the real-politick world, current benefits would inevitably be scaled back as pressures from the “under-55” crowd grows, as these “voters” realize the huge gap in what they will have to pay compared to what those, who by the luck of a couple of years, have to pay out of pocket.

While those who are now 55 and older would continue to get many of the same benefits under the current system, they also would lose a lot because Ryan would repeal the Patient Protection and Affordable Care Act (PPACA), last year’s health law. For example, the law closes Medicare’s doughnut hole, a gap in prescription drug coverage, and adds annual wellness visits as well free preventive services such as cancer screenings.

The claim: Boone also says Ryan is "not proposing to take $500 billion out of Medicare – that’s President Obama’s plan!"

Closer look: Actually, while Ryan would kill the PPACA, it would retain the $500 billion (over 10 years) in Medicare savings called for in the law, money that comes from cutting payments to hospitals and cutting funding from the Medicare Advantage program ( a program which is getting 14% more than traditional Medicare and which cannot be sustained at that generous rate). That could force Medicare Advantage (who are experts at "adverse selection" ... enrolling mostly wealthier and healthier seniors as against poorer, frequently sicker seniors into their plans) insurers to do away with some of the tax-payer-financed "extra" benefits that Medicare doesn’t require, such as hearing aids and eyeglasses.

Ryan says he would reinvest those reductions into Medicare, while the health law does not. Democrats claim that there is no evidence in the budget of such a reinvestment. There is not

The claim: Boone accuses Senate Majority Leader Harry Reid "and his cohorts" of engaging in” ’Mediscare’ tactics.

Closer look: This charge has resonated throughout conservative and Republican circles. They point to one recent video produced by a liberal group circulating online featuring what the viewer is supposed to believe is Ryan pushing a old woman in a wheelchair off the edge of a cliff while she screams in terror. And the Democratic Congressional Campaign Committee has been targeting Republicans who voted for the plan, with ads accusing them of voting to end Medicare.

Under TeaParty/Ryan, the traditional “basic” Medicare program will never be allowed to remain "as-is" for anyone in it now, or going into the program by 2022. It is dramatically cut back from the git-go. And while future, post-2022, grandmas (and other seniors) would still be covered in some way under the TeaParty/Ryan plan, most middle to low income seniors would find themselves teetering on the edge of the health care cliff.

The tug-of-war over the TeaParty/Ryan budget is likely to grow as next year’s election nears and both parties woo the ever-important senior vote. Exit polls from the 2010 congressional election showed that seniors favored Republicans by 21 percentage points, according to Democratic pollster Celinda Lake. But since the House passed Ryan’s budget, the GOP’s advantage with seniors has narrowed to 10 percentage points. You can see why conservative groups such as Plus 60 are so bent on spreading their lies about PPACA and hyper-inflating the Ryan plan: if they can continue to prey on seniors by disinformation, they may be able to maintain and re-inflate their political advantage.

May 30, 2011: Requiescat in Pacem: Rev. Thomas Kirwin (1943-2011) Priest, Classmate, Friend

May 27, 2011: Misconceptions and Realities About Who Pays Taxes

A recent finding by Congress’ Joint Committee on Taxation that 51 percent of households owed no federal income tax in 2009 [1] is being used to advance the argument that low- and moderate-income families do not pay sufficient taxes. Apart from the fact that most of those who make this argument also call for maintaining or increasing all of the tax cuts of recent years for people at the top of the income scale, the 51 percent figure, its significance, and its policy implications are widely misunderstood.

The 51 percent figure is an anomaly that reflects the unique circumstances of 2009, when the recession greatly swelled the number of Americans with low incomes and when temporary tax cuts created by the 2009 Recovery Act — including the “Making Work Pay” tax credit and an exclusion from tax of the first $2,400 in unemployment benefits — were in effect. Together, these developments removed millions of Americans from the federal income tax rolls. Both of these temporary tax measures have since expired.

In a more typical year, 35 percent to 40 percent of households owe no federal income tax. In 2007, the figure was 37.9 percent. [2]
The 51 percent figure covers only the federal income tax and ignores the substantial amounts of other federal taxes — especially the payroll tax — that many of these households pay . As a result, it greatly overstates the share of households that do not pay any federal taxes. Data from the Urban Institute-Brookings Tax Policy Center show only about 14 percent of households paid neither federal income tax nor payroll tax in 2009, despite the high unemployment and temporary tax cuts that marked that year.[3]
This percentage would be even lower if federal excise taxes on gasoline and other items were taken into account.
Most of the people who pay neither federal income tax nor payroll taxes are low-income people who are elderly, unable to work due to a serious disability, or students, most of whom subsequently become taxpayers. (In a year like 2009, this group also includes a significant number of people who have been unemployed the entire year and cannot find work.)
Moreover, low-income households as a whole do, in fact, pay federal taxes. Congressional Budget Office data show that the poorest fifth of households as a group paid an average of 4 percent of their incomes in federal taxes in 2007 (the latest year for which these data are available), not an insignificant amount given how modest these households’ incomes are — the poorest fifth of households had average income of $18,400 in 2007. [4] The next-to-the bottom fifth — those with incomes between $20,500 and $34,300 in 2007 — paid an average of 10 percent of their incomes in federal taxes.
Even these figures understate low-income households’ total tax burden, because these households also pay substantial state and local taxes. Data from the Institute on Taxation and Economic Policy show that the poorest fifth of households paid a stunning 12.3 percent of their incomes in state and local taxes in 2010.[5]
When all federal, state, and local taxes are taken into account,the bottom fifth of households paid 16.3 percent of their incomes in taxes, on average, in 2010. The second-poorest fifth paid 20.7 percent. [6]

It also is important to consider who the people are who don’t owe federal income tax in a given year.

Some 70 percent of people who owe no federal income tax in a given year are low-income working households. These people do pay payroll taxes, as well as federal excise taxes (and, as noted, state and local taxes). Most of these working households also pay federal income tax in other years, when their incomes are higher — which can be seen by looking at the low-income working households that receive the Earned Income Tax Credit (see next bullet).
The majority of EITC recipients receive the credit for only one or two years at a time, such as when their incomes drop due to a temporary layoff; they pay federal income tax in other years. In fact, EITC recipients pay much more in federal income taxes over time than they receive in EITC benefits. A leading study of this issue found that taxpayers who claimed the EITC at least once during an 18-year period paid a net $473 billion in federal income tax over that period (in 2006 dollars). [7] This finding shows that — while in any single year some taxpayers will receive refundable tax credits whose value may exceed their payroll tax liability — EITC recipients as a group pay significant federal income taxes over time in addition to the payroll and state and local taxes they pay each year.
The fact that most people who do not pay federal income tax in a given year do pay substantial amounts of other taxes, and also are net federal income taxpayers over time, belies the claim that households that don’t owe income tax will form bad policy judgments because they ostensibly “don’t have any skin in the game.”
The federal tax system is progressive overall, but state and local tax systems are regressive and undo a significant share of that progressivity. There is nothing wrong with having one part of the overall tax system shield low- and moderate-income households, who pay substantial amounts of other taxes and who generally pay federal income tax as well in other years.

To significantly increase the share of households that owe federal income tax, policymakers would have to take such steps as lowering the personal exemption or standard deduction — which would tax many low-income working families into, or deeper into, poverty; weakening the EITC or Child Tax Credit, which would significantly increase child poverty while reducing incentives for work over welfare; or paring back the tax exclusion for Social Security benefits, which would subject more seniors with small, fixed incomes to the income tax.

This analysis now explores these issues in more detail.

Oft-Cited 51 Percent Figure Is Temporary Spike Caused by Recession

In a typical year, roughly 35-40 percent of households have no net federal income liability; in 2007, the figure was 37.9 percent. [8] In 2009, however, two factors combined to cause a large, temporary spike in the share of Americans with no net federal income tax liability — the recession, which reduced many people’s incomes, and several temporary tax cuts that have now expired. The 51 percent figure reflects these temporary factors.

Recession-induced decline in incomes. In 2009, unemployment was at its highest level in decades and rising sharply, and incomes were falling. Income tax liabilities are designed to adjust to these cyclical factors, rising when the economy is strong and falling when it is weak; this automatic adjustment helps to stabilize the economy by cushioning the drop in people’s after-tax incomes — and thus their spending — during a downturn. One consequence of the economic downturn was a sharp decline in both federal and state tax receipts, as millions of workers lost their jobs or had their work hours reduced. For many Americans, the loss of income meant that while they owed federal income taxes in 2008, they did not in 2009.
Temporary tax cuts. Policymakers responded to the deep economic contraction by enacting policies to stimulate consumer demand, including targeted public investments and temporary tax cuts that removed millions more Americans from the tax rolls. Roughly 95 percent of working families benefited from the Recovery Act’s Making Work Pay tax credit, which reduced their federal income tax liability by $400 for individuals and $800 for married couples. For some of these people, the tax credit eliminated their federal tax liability. Other temporary income tax cuts, including the exclusion of the first $2,400 in unemployment insurance benefits and a first-time homebuyer tax credit, eliminated federal income tax liability for additional taxpayers.

In other words, the federal income tax system did what it is supposed to do during the recession — take a smaller bite out of people’s incomes. As the temporary tax cuts expire and the economy and incomes strengthen, people’s tax liabilities will rebound (see Figure 1).

Lower-Income People Pay Considerable Payroll, State, and Local Taxes

The notion that “half of Americans don’t pay taxes” not only overstates the share of households that do not pay federal income taxes in a typical year. It also ignores the other taxes people pay, including federal payroll taxes and state and local taxes.

Policymakers, pundits, and others often overlook this point. At a hearing last month, Senator Charles Grassley said, “According to the Joint Committee on Taxation, 49 percent of households are paying 100 percent of taxes coming in to the federal government.” At the same hearing, Cato Institute Senior Fellow Alan Reynolds asserted, “Poor people don’t pay taxes in this country.” Last April, referring to a Tax Policy Center estimate of households with no federal income tax liability in 2009, Fox Business host Stuart Varney said on Fox and Friends, “Yes, 47 percent of households pay not a single dime in taxes.”[9]

None of these assertions are correct. As the Tax Policy Center’s Howard Gleckman noted regarding TPC’s estimate that 47 percent of Americans owed no federal income tax in 2009, “rarely has a bit of data been so misunderstood, or so misused.” Gleckman wrote:

Let me explain — repeat actually — what [the 47 percent figure] means: About half of taxpayers paid no federal income tax last year. It does not mean they paid no tax at all. Many shelled out Social Security and Medicare payroll taxes. In fact, only 14 percent of Americans didn’t pay either income or payroll taxes. Some paid property taxes and, it is fair to say, just about all of them paid sales taxes of one kind or another. So to say they pay no taxes is flat wrong. [10]

The reality is that the income tax is one of a number of types of taxes that individuals pay, both over the course of their lifetimes and in a given year, and it makes little sense to treat it as though it were the only one that matters. Some 86 percent of working households pay more in payroll taxes than in federal income taxes.[11] In fact, low- and moderate-income people pay a much larger share of their incomes in federal payroll taxes than high-income people do: taxpayers in the bottom 20 percent of the income scale paid an average of 8.8 percent of their incomes in payroll taxes in 2007, compared to just 1.6 percent for taxpayers in the top 1 percent of the income distribution (see Figure 2).[12]

In addition, Congressional Budget Office data show that lower-income households pay a significantly larger share of their incomes in federal excise taxes (levied on goods such as gasoline) than middle- and upper-income households do.

When all federal taxes are considered, it is clear that the overwhelming majority of Americans pay such taxes. The poorest fifth of households paid an average of 4 percent of their incomes in federal taxes despite their low incomes in 2007, while the next fifth paid an average of 10 percent of income in federal taxes.

Low-income families also pay substantial state and local taxes. Most state and local taxes are regressive, meaning that low-income families pay a larger share of their incomes in these taxes than wealthier households do. The bottom fifth of taxpayers paid 12.3 percent of their incomes in state and local taxes in 2010, according to the Institute on Taxation and Economic Policy (ITEP) model.[13] That was well above the 7.9 percent average rate that the top 1 percent of households paid (see Figure 3).

Considering all taxes — federal, state, and local — the bottom 20 percent of households paid an average of just over 16 percent of their incomes in taxes (12.3 percent in state and local taxes plus 3.9 percent in federal taxes) in 2009. The next 20 percent paid about 21 percent of income in taxes, on average. [14]

In fact, when all taxes are considered, the share of taxes that each fifth of households pays is similar to its share of the nation’s total income.[15] The tax system as a whole is only mildly progressive. [16]

Policy Options to Force People with Low Incomes to Pay Federal Income Tax Are Unsound

Some have implied or suggested that people who do not owe federal income tax are “freeloaders” who don’t have a “stake in the system” and that making them pay federal income taxes would improve the tax code. Yet the vast majority of the people who owe no federal income taxes fall into one of three categories (see Figure 4):[17]

Approximately 70 percent are working people who pay payroll taxes. As noted above, even the low-income households in this group pay substantial federal income taxes over time. The main options to force these people to pay federal income tax in years when their incomes are low include cutting the EITC or the Child Tax Credit, which would tend to reduce work incentives and increase child poverty and welfare use, and lowering the standard deduction or personal exemption, which could tax many low-income working families into, or deeper into, poverty.
An additional 17 percent of people who did not pay federal income taxes in 2009 are people aged 65 or older. The main option to make these individuals pay federal income tax would be to subject their Social Security benefits to taxation.[18]
The remaining 13 percent consists largely of students, people with disabilities, the long-term unemployed, and others with very low taxable incomes.[19] To make these people pay federal income taxes, policymakers would have to tax disability, veterans’, and similar benefits or make full-time students and the long-term jobless individuals borrow (or draw from any available savings) to pay taxes on their meager incomes.

In short, the kinds of policy changes that would impose federal income taxes on these groups of people would make the overall tax system less fair and less sensible, not more so. An examination of the EITC illustrates this point, as the next section explains.

Corporations and Small Business Owners Also Pay No Income Tax During Bad Years

As this report notes, in addition to paying other taxes each year (many of which involve significant tax burdens), most people who do not pay federal income tax in a given year do pay that tax over time. For example, more than half of the tax filers who received the EITC between 1989 and 2006 received the credit for no more than a year or two at a time and generally paid substantial amounts of federal income tax in other years.^* In fact, the taxpayers who claimed the EITC during this 18-year period paid $473 billion in net federal income tax over that period (in 2006 dollars) even after taking the EITC payments they received into account.

The tax-paying record of both large corporations and small businesses follows an analogous pattern — in some years no taxes are paid, while in other years substantial taxes are paid. During the years when they have net operating losses, companies that are subject to the corporate income tax generally have no tax liability.

A GAO study found that in every year from 1998 to 2005, approximately 55 percent of large corporations paid no corporate income tax. ^** But over a period of five years, fewer than 5 percent of large corporations had no net corporate tax liability. This reflects a similar pattern as applies to families and individuals — those who do not pay income tax in a given year often do pay income tax over time.

This pattern also applies to small business owners and others who deduct business losses from their taxable incomes and thereby eliminate their income tax liability in some years.

Cutting the EITC Would Discourage Work and Increase Poverty

From its roots as an idea from conservative economist Milton Friedman several decades ago, the EITC has become an increasingly important tool to make work pay more than welfare and enough to lift people working full time at the minimum wage out of poverty. Research has demonstrated the EITC’s effectiveness. Nobel laureate (and noted conservative economist) Gary S. Becker has written, “Empirical studies confirm . . . that the EITC increases the labor force participation and employment of people with low wages because they need to work in order to receive this credit.” [20] (Becker also has applauded the EITC for being “fully available to families with both parents present, even where only one works and the other cares for their children [i.e., for being available to low-income working families with stay-at-home mothers].”)

Studies of the EITC expansions of the 1980s and 1990s found those expansions induced more than half a million people to enter the labor force. One prominent study identified the EITC as “a particularly important contributor to both the recent decrease in welfare use and the recent increase in employment, labor supply, and earnings” among female-headed families.[21] The creation of the refundable component of the Child Tax Credit, which like the EITC is available only to families that work, has complemented the EITC’s pro-work efforts. Moreover, the EITC and the refundable Child Tax Credit together lifted 7.2 million people out of poverty in 2009, including 4 million children.[22] These refundable credits lift more children out of poverty than any other program or category of programs at any level of government.

Several factors reinforce the importance of these credits in promoting and rewarding low-wage work. In recent decades, incomes in the United States have grown increasingly unequal, with the lion’s share of the economic gains from globalization, advances in technology, and the like accruing to those on the upper rungs of the income ladder. CBO data show that the average income among people in the lowest income fifth was $17,700 in 2007; if all incomes had grown at the same rate since 1979, that figure would have been $6,000 higher. Our economy benefits from globalization and technological change, but there are winners and losers. The refundable tax credits help to offset a portion of the effects of the stagnation of wages at the bottom of the income spectrum.

In addition, the weak labor market is likely to continue exerting downward pressure on wages over the next several years. The unemployment rate remains stubbornly high, at 9 percent in April 2011. CBO projects that it will not drop to under 6 percent until 2015. Taking note of the current bleak employment picture facing out-of-work men, columnist David Brooks recently wrote that “wage subsidies” should be on the list of future policy responses. The EITC is a much-needed wage subsidy for low-income workers (although the EITC for poor workers without children remains very small and could be strengthened).

Finally, over the past several decades, policymakers have essentially relied more on the EITC to supplement low wages and less on the minimum wage, which they have allowed to decline by 19 percent in purchasing power since 1970 (i.e., the minimum wage has fallen by 19 percent in inflation-adjusted dollars).

For all of these reasons, scaling back the EITC in order to require more low-income working households to pay federal income taxes would be a significant step backward, discouraging work and increasing poverty.

End Notes:

[1] The Urban Institute-Brookings Institution Tax Policy Center had previously estimated the share of households who owed no federal income tax in 2009 to be 47 percent.

[2] Tax Policy Center, “Tax Units with Zero or Negative Tax Liability, 2004-2008,” October 16, 2009, http://www.taxpolicycenter.org/numbers/Content/PDF/T09-0412.pdf.

[3] Tax Policy Center, “Tax Units with Zero or Negative Tax Liability, 2009-2019,” July 1, 2009, http://www.taxpolicycenter.org/numbers/Content/PDF/T09-0333.pdf.

[4] Congressional Budget Office, “Average Federal Taxes by Income Group,” June 2010, http://www.cbo.gov/publications/collections/tax/2010/all_tables.pdf .

[5] Citizens for Tax Justice, “All Americans Pay Taxes,” April 15, 2010, http://www.ctj.org/pdf/taxday2010.pdf.

[6] Citizens for Tax Justice, 2010.

[7] Tim Dowd and John B. Horowitz, “Income Mobility and the Earned Income Tax Credit: Short-Term Safety Net or Long-Term Income Support,” Public Finance Review (forthcoming)

[8] Tax Policy Center, “Tax Units with Zero or Negative Tax Liability, 2004-2008,” October 16, 2009, http://www.taxpolicycenter.org/numbers/Content/PDF/T09-0412.pdf.

[9] Media Matters, “Do conservative media figures want to raise taxes on middle- and low-income Americans?”, April 9, 2010, http://mediamatters.org/research/201004090030.

[10] Howard Gleckman, “About Those 47 Percent Who Pay ‘No Taxes,’” TaxVox, April 15, 2010, http://taxvox.taxpolicycenter.org/2010/04/15/about-those-47-percent-who-pay-%E2%80%9Cno-taxes-%E2%80%9D/ .

[11] Len Burman and Greg Leiserson, “Two-Thirds of Tax Units Pay More Payroll Tax Than Income Tax,” Tax Notes, April 9, 2007.

[12] Congressional Budget Office, 2010.

[13] Citizens for Tax Justice, 2010.

[14] Citizens for Tax Justice, 2010.

[15] Citizens for Tax Justice, 2010.

[16] Before taxes, the bottom 20 percent of households received 4 percent of national income and the top 1 percent received 19.4 percent. After taxes, the bottom 20 percent of households received 4.9 percent of national income and the top 1 percent received 17.1 percent. Congressional Budget Office, 2010.

[17] Tax Policy Center, “Who Doesn’t Pay Federal Taxes,” http://www.taxpolicycenter.org/taxtopics/federal-taxes-households.cfm

[18] Under current law, Social Security benefits are not subject to the income tax for filers whose income is below $25,000 for individuals and $32,000 for couples.

[19] March 2010 Current Population Survey, U.S. Census Bureau.

[20] Gary S. Becker, “How to End Welfare ‘As We Know It’ — Fast,” Business Week, June 3, 1996.

[21] Jeffrey Grogger, “The Effects of Time Limits, the EITC, and Other Policy Changes on Welfare Use, Work, and Income among Female-Headed Families,” The Review of Economics and Statistics, May 2003.

[22] Arloc Sherman, “Despite Deep Recession and High Unemployment, Government Efforts – Including the Recovery Act – Prevented Poverty From Rising in 2009, New Census Data Show,” Center on Budget and Policy Priorities, January 5, 2011.

May 27, 2011: The Patient Protection and Affordable Care Act (PPACA) Is Helping Young Adults Stay Covered

In the United States it is young adults who are among those most at risk of going without health insurance. According to the most recent U.S. Census data, during 2009 nearly 15 million people ages 19 to 29 (one-third of the people in that age group) were not covered (roughly one-third the number of total uninsured in the USA). During the last decade, the number of uninsured young adults climbed by 4 million. These high uninsured rates are caused in part by young adults being excluded from their parents’ policies when they graduated from high school or college. Or, if they were insured under Medicaid or the Children’s Health Insurance Program (CHIP), they generally aged off this insurance at age 19. As new entrants to the labor market, young adults face significant challenges finding full-time employment that carries health benefits.

But new surveys and health plan enrollment numbers suggest the Patient Protection and Affordable Care Act (PPACA) is already turning the tide for many young adults, providing new protections to the 2011 graduating class. The law’s requirement that health plans that offer dependent coverage allow children under the age of 26 to remain on or join their parents’ policies has led to an increase of 600,000 young adult enrollees in five health plans.2 In addition, a new Gallup Poll shows that uninsured rates among 18-to-29-year-olds fell in the early part of this year.

By September 2011, when all health plans and employers with dependent coverage will include young adults, the number of them who will be newly covered is certain to climb.

Still, most young adults who are uninsured now will gain coverage only when the central provisions of the law go into effect in 2014. Nearly half of uninsured young adults, or 7.2 million who are legal residents, are in families with incomes under 133% of the federal poverty level, or FPL (today, $14,404 for a single person), and most of them will become eligible for newly expanded coverage under the Medicaid program. An additional 4.9 million have incomes from 133% to 399% of the FPL ($14,404 and $43,320 for a single person) and will qualify for subsidized private coverage under the law.

New findings from the Commonwealth Fund Biennial Health Insurance Survey of 2010 underscore why health reform has become so important for those in this age group. As the numbers of young adults without health insurance climbed over the last decade, they became more exposed to the rapidly rising costs of health care, complicating their ability to get medical attention. Forty-five percent of young adults reported that cost considerations caused them to forgo needed treatment in 2010, up from 32% in 2001. Young adults reported problems at higher rates than adults ages 50 to 64 (36%) in 2010. Forgoing care included, because of cost, not filling prescriptions, not going to the doctor when sick or seeing a specialist when necessary, and not getting follow-up treatment recommended by a doctor. Young adults in low- and moderate-income families experienced the greatest deterioration in their ability to gain timely health care over the past decade. More than half (53%) of young adults with incomes of less than 100% of the FPL ($10,830 for a single person) delayed needed health care because of the cost, up from one-third (32%) in 2001. In the next-higher income group, 100% to 199% of the FPL (up to $21,660 for a single person), the share of young adults reporting cost-related problems also rose to more than half (52%). And even young adults with somewhat higher incomes (200% of the FPL or higher) reported cost-related delays in obtaining needed care; those numbers rose from 25% in 2001 to 38% in 2010.

The survey also found that young adults have been struggling to pay their medical bills. Nearly 40% reported that they had not been able to pay their bills, had been contacted by a collection agency about unpaid bills, had to change their way of life to pay their bills, or were paying off medical debt over time. Young adults with low and moderate incomes reported problems at the highest rates: 45% of those with incomes of less than 100%of the FPL and half of those with incomes from 100% to 199% of the FPL reported problems paying medical bills, up from just over one-third (36% and 38%) in 2005. Of those young adults struggling with medical bills, one-third had depleted their savings to pay their bills and nearly one of five (18%) took on credit card debt.

Young adults who lacked health insurance had the greatest difficulty obtaining needed care and paying medical bills. Nearly six of 10 (58%) uninsured young adults reported delaying care because of cost compared with one-third (34%) of those who had health insurance all year. Half of uninsured adults reported difficulties paying their medical bills, twice the rate of insured young adults.

And women in this age group, with their greater reproductive and preventive health care needs, reported problems at higher rates than men. Half (51%) of women ages 19 to 29 reported delays in obtaining needed care because of cost, compared with 39 percent of men. And 44% of women had problems paying medical bills, compared with 34% of men.

HOW THE PATIENT PROTECTION AND AFFORDABLE CARE ACT WILL INSURE NEARLY ALL YOUNG ADULTS AND PROTECT THEIR HEALTH AND FINANCIAL SECURITY

PPACA will provide near universal coverage to young adults, allowing them to pursue educational and career goals without incurring the risk of catastrophic health care costs. There are several ways in which the law will help:

• It lets young adults remain on or join their parents’ health plans up to age 26 (this provision went into effect in 2010);

• It requires college health plans to meet new standards, starting in 2012;

• It significantly expands Medicaid eligibility to cover all adults with incomes below 133% of the federal poverty level, beginning in 2014; and

• It creates new state health insurance exchanges with subsidized private insurance for people with low and moderate incomes up to 399% of the FPL, beginning in 2014.

May 27, 2011: Medicare and Mediscares

Apropos of my posting yesterday [see below] on "Mediscare," you need to read Nobel-Prize-Winning economist Paul Krugman's column in today's New York Times: http://www.nytimes.com/2011/05/27/opinion/27krugman.html?_r=1&hp

Excerpt: "You can understand Mr. Ryan’s bitterness. He has, after all, experienced quite a comedown over the course of the past seven weeks. Until his Medicare plan was rolled out in early April he had spent months bathing in warm approbation from many pundits, who had decided to anoint him as an icon of fiscal responsibility. And the plan itself received rapturous praise in the first couple of days after its release. Then people who actually know how to read a budget proposal started looking at the plan. And that’s when everything started to fall apart. Mr. Ryan may claim — and he may even believe — that he’s facing a backlash because his opponents are lying about his proposals. But the reality is that the Ryan plan is turning into a political disaster for Republicans, not because the plan’s critics are lying about it, but because they’re describing it accurately. ... Still, are Democrats doing a bad thing by telling the truth about the Ryan plan? 'If you demagogue entitlement reform,' says Mr. Ryan, 'you’re hastening a debt crisis; you’re bringing about Medicare’s collapse.' Maybe he should have a word with his colleagues who greeted the modest, realistic cost control efforts in the [Patient Protection and] Affordable Care Act with cries of 'death panels.'"

May 26, 2011: Rush Limbaugh is a [Expletive Deleted]

I'm not really sure if I'm more incensed at this caller or Limbaugh. After all, I expect Rush to be a big-mouthed toad with mush where his brains should be. But the caller leads this off with the usual "Sc**w you, I've got mine" attitude when he says this:

LIMBAUGH: If you believe the majority of stories we get about the elderly in this country, that they are, for the most part, just a couple steps away from poverty.

CALLER: Hi, no, I don't believe that, and I hate to say this, but if they are a step away from poverty that is their responsibility because they did not save for their future. It is not my responsibility that you spent all of your money and did not save for your future.

Let's just stop right there. This caller is so arrogant and nasty I'd like to wrap Wall Street around his pencil-necked body. Let's just say for the sake of argument that some seniors actually had investments, and actually had saved for their futures. And let's also say for the sake of argument that they invested those funds in a fairly conservative portfolio of stocks and bonds. And let's go one step further and say that when the market started to tank, they yanked their money out of the market at exactly the wrong time, leaving them with cash earning nearly zero interest, and a balance equal to about 60% of what it was worth a year earlier.

Whose responsibility would that be? Would it be theirs, or the sharks on Wall Street who played fast and loose with other people's money? Oh, and we can go even one step farther and say that those seniors who own their homes outright saw their balance sheets fall even faster. If they were unfortunate enough to have a reverse mortgage on their home, well, they and their heirs might just be out of luck now. But yeah, of course that's their fault.

To date, not a single Wall Street muckety-muck, the friendly folks who brought us the economic foibles we have been living through these past 3-4 years, has been criminally indicted; not a single dime of the superheated salaries and bonuses they paid themselves work their work in nearly destroying the U.S. economy. Until these things happen, there can be no justice in America.

May 26, 2011: FACT-CHECKING RYAN ON RYAN'S PLAN

Wisconsin TeaParty/GOP Congresscritter and Chair of the House Budget Committee Paul Ryan acknowledged this morning on MSNBC’s Morning Joe that Medicare played a role in the Republicans’ loss in NY-26.

“The president and his party have decided to demagogue” the issue, the Wisconsin Republican said, calling the campaign against his budget plan “Mediscare.” When asked to clarify if he believed the “demagoguing” of Medicare played a role, Ryan said, “That’s a big part of it.” He added, that Democrats are “scaring seniors that their current benefits are going to be affected.”

Just Between You and Me: O.K., the Democratic opposition to Ryan’s plan has boiled over a bit, but compared to the demogoguing by TeaParty/GOPers before and since the 2010 elections and the outright lies that they told, and are continuing to tell about both PPACA and the alleged “cuts Democrats were making in Medicare,” what the Democrats have been saying about the Ryan plan ranks as mere hyperbole.

He also acknowledged on Morning Joe, “People in the Republican Party are nervous because of these kinds of ads,” referring to a Web video depicting him throwing an elderly woman in a wheelchair off a cliff. “You should have seen how many takes it took to make that work,” he joked. He argued, as President Obama did during the health-care debate, that the biggest hurdle is that this is a complicated issue that is difficult to explain. “Once people learn the facts, we are fine,” he claimed.

Just Between You and Me: Have no doubt about it, the consequences of adopting a Ryan-type plan with dramatic and draconian cuts to future Medicare recipient benefits and costs, no matter what the cut off age might be: will have significant impact on current Medicare beneficiaries and their future Medicare benefits and costs! Hey wake up and smell the sulfur, we live in a realpolitick world, and in that real world our society would not long tolerate such a two-tiered system; inevitably the cuts to one would be applied to all (or vice-versa, but that’s not in the Ryan plan). Trust me on this, I am a lawyer: should the Ryan plan, or one like it, be adopted, with a matter of a couple of years, the grandmothered beneficiaries would feel the pinch and Ryan’s pushing “grandma off the cliff,” would be a fait accompli.

So what are the facts?

1. Would Medicare continue to exist?

It’s true that anyone 55 and older on the face of Ryan’s plan would not be affected, so a video depicting someone currently older than 55 being thrown off a cliff is misleading. But Ryan claimed that Medicare would continue to exist. The more important question, however, is in what form?

When asked by one of the Morning Joe panelists, “For people who are 54 years of age or younger, when they're 70 years of age, are they dealing and negotiating with an insurance company?”

“No,” Ryan responded.

“Or are they dealing with Medicare?”

“It's Medicare.”

But as the Congressional Budget Office wrote in its analysis of Ryan’s plan: “People who turn 65 in 2022 or later years and Disability Insurance beneficiaries who become eligible for Medicare in 2022 or later would not enroll in the current Medicare program but instead would be entitled to a premium support payment to help them purchase private health insurance.” In other words, traditional Medicare would, in fact, be phased out for those 54 and younger. They would be significantly impacted. Lost in the back and forth of the exchange with Ryan was that in the same answer, he went on to outline just how much Medicare would change – albeit not explicitly.

“You select the plan that you want,” he said. “You can't be denied. And then Medicare subsidizes your plan. That's how it works for a lot of insurance arrangements. For federal workers, Medicare Advantage and plenty of others work like this. Medicare subsidizes a plan you choose.”

Those who are 65 by 2022, would select private insurance from an exchange system … something ominously very similar to that which TeaParty/GOPers have so vehemently opposed in PPACA. Then, the CBO writes: “The premium support payments would go directly from the government to the plans that people selected.” This would significantly impact those 54 and younger.

CBO: “Under the proposal, the gradually increasing number of Medicare beneficiaries participating in the new premium support program would bear a much larger share of their health care costs than they would under the traditional program. … That greater burden would require them to reduce their use of health care services, spend less on other goods and services, or save more in advance of retirement than they would under current law.”

In short, in 10 years, people would pay more for health care when they’re seniors under the Ryan plan than they would under traditional Medicare. (And in the realpolitick world, so will those already covered by a fast-diminishing “traditional Medicare.”) And because participation in Medicare would be voluntary, CBO says the number of uninsured seniors would increase: “[C]osts to individuals (beyond those covered by the premium support payment) would be higher under the proposal than under traditional Medicare, and some individuals would therefore choose not to purchase insurance … the number of older Americans without health insurance would be higher.”

2. Did the idea for “premium support” come from a Bill Clinton commission?

Ryan also claimed on Morning Joe that the idea for “premium support” “came from Bill Clinton's bipartisan commission to save Medicare.” He added that the “Brookings Institution first coined the phrase ‘premium support.’” While it is true that Alice Rivlin, a senior fellow at Brookings and Clinton’s former Office of Management and Budget director, worked with Ryan on coming up with the idea of “premium support,” there are at least three key differences. She told Ryan she could not support his plan, according to comments she made to Politico last month, because:

1.    Current seniors do not have a choice between staying with Medicare (traditional Medicare or a Part C “Medicare Advantage plan) or not, they are automatically covered for Medicare Part A;

2.    The increases in the amount of subsidies under the Ryan plan are too small “She said seniors would have the choice between keeping their current form of Medicare or choosing to enter the pool,” Politico wrote. “In Ryan’s version, he did not keep the beneficiaries with the choice to keep what Rivlin called the ‘default option.’”

3.    And: “The other main difference is in the rate of growth in subsidies for beneficiaries entering the new exchange system. ‘In the Ryan version, he has lowered the rate of growth and I don’t think that’s defensible,’ Rivlin said. ‘It pushed too much of the cost onto the beneficiaries.’”

May 26, 2011: Fox News Pumps "Mediscare" Controversy

Never cowed by its own past super-heated hyperbole (and outright lies, fabrications and distortions) about the Patient Protection and Affordable Care Act ("PPACA" or as Fox and right-wingers love to call it "Obamacare"), the Faux News Network has embraced the term "Mediscare" to criticize the rising opposition to the "Ryancare," the TeaParty/Republican alternative. The right-wing Weekly Standard is even conducting a survey (accompanied by a pitch for contributions to right wing candidates) entitled "Mediscare Survey."

The question I have to ask myself is do these people ever get embarrassed over their own inconsistencies and illogical arguments? They won big in 2010 using their own Mediscare, lying about proposed Medicare cuts in PPACA and now want to Democrats to roll over (again) and play softball, er wiffleball, rather than hardball when it comes to political rhetoric. Crybabies all.

May 24, 2011: Dumb and Dumber

May 23, 2011: The Toomey Senate Budget: Even More Draconian than the Ryan House Proposal

The Senate will likely consider this week a budget proposal for fiscal year 2012 from Pennsylvania TeaParty/GOP Senatecritter Patrick Toomey ( a "former" Wall Street banker) that, in several ways, is even more draconian than the House-passed plan of TeaParty/GOP House Budget Committee Chaircritter Paul Ryan.

At first blush, the TeaParty/Toomey plan may seem more moderate than the TeaParty/Ryan budget, which the Senate also will likely consider this week. That’s because the Toomey plan does not include Chaircritter Ryan’s controversial proposal to replace guaranteed Medicare benefits with vouchers that would cover part of the cost of purchasing private health insurance ... a provision that would raise total health care spending attributable to Medicare beneficiaries and more than double out-of-pocket costs for a typical 65-year-old beneficiary in 2022 and which would inevitably lead to limits on future Medicare benefits to those "grandmothered" in to "traditional" Medicare, or to those already covered.

But, in several ways, the Toomey budget is even more radical than the Ryan plan. While it essentially mirrors the Ryan plan in proposing deep cuts in non-defense discretionary programs, it proposes much deeper cuts in entitlement programs other than Medicare ... and relies on a rosy economic scenario and fanciful assumptions about tax collections ... to claim it produces modest surpluses in 2020 and 2021 instead of the approximately $400 billion deficits in each of those years under the Ryan plan.

The TeaParty/GOP Toomey plan:

Cuts funding for non-defense discretionary programs by nearly $1.5 trillion over the next ten years below the level recently enacted for the current year (fiscal year 2011), adjusted for inflation. In 2021, it would impose a 30% cut in this category ... which includes transportation and infrastructure, the FBI, most of homeland security activities (a small part of which falls in the defense category), elementary and secondary education, National Institutes of Health cancer and other health research, environmental protection, and a vast array of other significant programs. These proposed cuts are very similar to those in the Ryan budget.

Assumes a $275 billion cut in defense below what the Ryan plan proposes (and a slightly bigger cut compared to what President Obama requested in the 2012 budget that he sent to Congress in February), largely by assuming full U.S. withdrawals from Iraq and Afghanistan by 2018.

Cuts mandatory programs other than Social Security and Medicare (or interest payments on the debt) by nearly $3.8 trillion below the baseline projections of the Congressional Budget Office (CBO) over ten years, and by $615 billion — more than half ... in 2021 alone. Of the $3.8 trillion:

About $1.4 trillion would come from repealing the parts of health reform (i.e., the Patient Protection and Affordable Care Act) that expanded health coverage. (TeaParty/Toomey intends to maintain the Medicare cuts that were included in health reform to partially offset the cost of expanding coverage, but it repeals the revenue increases that helped pay for the expansion.)

About $1.1 trillion would come from Toomey’s proposal to turn Medicaid into a block grant and cut federal funding for the program by half by 2021 (separate and additional to the $627 billion cut in health reform-related Medicaid costs). This would shift huge costs to the states and force cuts in the number of poor elderly, disabled, and children served and the services they receive. Toomey’s Medicaid cuts, not counting those related to health reform, are $326 billion larger than the proposed $771 billion cut over ten years in the Ryan plan.

Nearly $900 billion would be cut from social safety net programs (budget function 600) ... which include programs such as SNAP (food stamps), Supplemental Security Income, and unemployment insurance. By 2021, funding for this category would shrink by more than one-fifth. Toomey’s cuts in this category are more than twice as large as the $380 billion cut over ten years in the TeaParty/Ryan plan.

A little more than $400 billion would come from cuts in various other categories of mandatory spending, including a nearly $150 billion reduction in the education, training, employment, and social services category (budget function 500). Toomey’s plan does not contain any specific proposals to achieve these savings. Toomey’s cuts in this category are $80 billion higher than the $326 billion over ten years in the TeaParty/Ryan plan.

Achieves no actual deficit reduction from revenues. The plan assumes that its proposed “tax changes will be revenue neutral when scored statically…” compared to the revenues that the federal government would collect under current policies (that is, if all expiring tax cuts, including President Bush’s tax cuts that benefit high-income taxpayers, are made permanent). But Wall Street guru Toomey (based upon his vast personal experience on Wall Street) claims that eliminating loopholes, collapsing the current personal income tax rate structure into three brackets with lower rates, and cutting the corporate income tax rate from 35% to 25% “will generate strong economic growth, which will in turn yield surging tax revenues.” (And we all know how well that has worked out these past few years of Wall Street hedge-betting.) Based on this rosy economic scenario, which is more optimistic than the CBO projections that the Ryan plan employed, and on seemingly fanciful estimates of the taxes that the government will collect relative to the assumed size of the economy, the TeaParty/Toomey plan claims revenues will be $1.4 trillion higher over ten years than what the TeaParty/Ryan plan assumes with similar tax policies.

Toomey mistakenly claims that the economic assumptions behind his budget are less optimistic than those of the Ryan plan. But, while TeaParty/Chaircritter Ryan asserts that his tax plan would boost economic growth, the revenues (and spending, deficits, and debt) shown in his plan are based on CBO’s baseline economic projections ... not on the far more suspiciously optimistic economic path TeaParty/Toomey believes would result from his plan’s enactment.

Senatecritter Toomey’s decision not to include TeaParty/Chaircritter Ryan’s Medicare voucher proposal is a step in the right direction, but his even more severe cuts in Medicaid and other programs aimed at helping the most vulnerable Americans mean that his plan overall would be even more damaging than the TeaParty/Ryan plan.

May 22, 2011: Right-Washing American History

Jeanne has compiled an extensive list of "paronomasia" (over 750 puns currently in her collection) and is always looking for more. The latest one deserves to be posted on this, her blog:

"Right-Washing" -- Recent attempts (and successes) by the TeaParty/GOP to have U.S. history and science school text books re-written to eliminate what they believe to be embarrassing aspects of American history ("slavery" as incorporated into the original Constitution; the actual causes of the Civil War; the 10th amendment as being superseded and overruled by the 14th; and suggesting that the "deism" of the founding fathers was proof that this is a "Christian-only nation") and to forbid the teaching of certain aspects of U.S. societal relationships (banning the use of the term "gay," for example and either the banning of the teaching of evolution or requiring "creationism" to be taught as a legitimate scientific theory... among others).

Not really "funny" but sadly all too true. <sigh>

May 21, 2011: Chrysler to Re-Pay Government Loan; Just Another Government Failure... NOT!

Shhhhh! Do you hear that? Neither do I. I’m talking about reaction from TeaParty/GOP critics of the auto bailout to news that Chrysler will pay back the $7.5 billion that it borrowed from taxpayers of the United States and Canada. Chrysler is raising the cash to pay back its government loans through a combination of bond sales, a commercial loan and a cash infusion from its partner Italian automaker Fiat, according to a story last week in the Detroit Free Press, (with an editorial cartoon by Mike Thompson, expressing the "disappointment" by right-wing TeaParty/GOPers at the news.)

Granted, all this constitutes a refinancing of Chrysler’s debt and the company is far from being out of woods – it still owes the $7.5 billion. But the fact that an automaker that had been given up for dead a few years ago is now healthy enough to convince private investors to pony up billions is a positive sign. And the chief issue among bailout critics wasn't the long-term survival of Chrysler (they were willing to let the automaker die after all) but whether the company could ever pay back the money it borrowed from the government. Well, it just did.

So Chrysler lives to fight another day, thousands of Americans keep their jobs and the company continues to expand and post profits. Which is good news, unless you are a Toyota state Senator, are paid by a think tank to opine that government can never do anything right, or are an ideologue who’s genetically incapable of uttering the word “government” without immediately blurting out the word “boondoggle.”

Additional Note: (from the Detroit Free Press, May 24, 2011)

"Former Michigan Gov. Jennifer Granholm today 5/23/2011) lambasted Republican presidential candidates – especially Mitt Romney – for their opposition to federal loans that rescued Chrysler and General Motors from liquidation in 2009. “Michigan families, Midwestern families would have been left out in the cold, no job, no income, no industry. And these voters are not going to forget it,” Granholm said. With Chrysler recently announcing its payback of $5.8 billion in federal loans, Granholm was joined in a conference call from Washington by former Democratic Ohio Gov. Ted Strickland, and UAW president Bob King. Chrysler is expected to repay $5.8 billion today that it owed the U.S. Treasury after emerging from bankruptcy in June 2009, and Chrysler Financial repaid its $1.5 billion government loan. However, taxpayers didn’t recover all of the $14.3 billion given to Chrysler since late 2008. Even after the loans are repaid, the U.S. government will continue to own 6.6% of Chrysler. The government could recover additional money when it sells its shares either through a public stock offering or by selling its stake to another investor. Chrysler and Fiat CEO Sergio Marchionne has said a public stock offering could occur this year or next year."

Just Between You and Me: While the Democrats can crow about the success of the auto-bailouts and plan future campaigns around that success, notice one important point in the quotes above from the Free Press, both Granholm and Strickland are described as "former" governors ... each having been replaced after the 2010 elections by ultra-conservative TeaParty/GOPer governors (and dominating TeaParty/GOP state legislatures), who have since moved to destroy public employee unions in both Michigan and Ohio. TeaParty/Republicans successfully used the auto company bail-outs to against Democrats in 2010 ... with many of the same people whose jobs were actually saved, "forgetting" that the bail-outs actually helped them, and voting for the TeaParty/GOP. With Americans reacting more to bumper sticker politics, it's not clear that they won't continue to vote against their own self-interest again in 2012.

May 20, 2011: New DHHS PPACA Rule Says Health Insurers Must Justify Double-Digit Rate Increases

Health insurers seeking rate increases of 10% or more will face increased scrutiny starting in September under new rules published in final May 19, 2011 by the Obama Administration. States … or in those states where TeaParty/GOP governors and state legislatures are balking at enforcing provisions of PPACA, the federal government … will review the flagged premium increases and insurers will have to justify increases deemed unreasonable. The law does not give the federal government power to reject increases, but a few state regulators have that authority ... and many more may seek it.

The new rules, required by the Patient Protection and Affordable Care Act (PPACA), also require insurers to provide a broad overview of what they plan to spend the money on, including how much would go to “actual” medical services, profits and administrative costs. The insurance industry has already begun to lobby against many of the insurance-limit features in PPACA, most specifically the "medical loss ratio" requirement. Insurers are fighting, for example, whether the cost of utilization review can be included as a cost of actual patient care, or as administrative overhead, in the calculation of the 85% medical loss ration standard. These new rules expand on the MLR regulations from last year and which are already in effect.

“Recently, insurers have posted some of their highest profits in years … and (yet) they continue to raise rates, often without any explanation or justification,” Department of Health and Human Services Secretary Kathleen Sebelius said in a conference call yesterday. “The framework of the Patient Protection and Affordable Care Act is beginning to change this.”

The rules are nearly identical to the draft regs proposed by DHHS in December and come amid continued concern about rapidly rising insurance costs. Such increases have come even as many insurers have seen their benefit payouts slow as economically strapped consumers cut back on medical care. Just this past Sunday, the New York Times published what amounted a virtual expose on the “record profits” being made by health insurers “enriched in recent months by a lingering recessionary mind-set among Americans who are postponing or forgoing medical care.” Yet these same companies are continuing to raise premiums and pressing state insurance regulators for rate increase approvals. Never mind their reserve coffers are flush with profits and their executives are rewarding themselves with pay raises and bonuses with shareholders being rewarded with higher and higher dividends. The industry defends its proposed double-digit rate increases citing PPACA and the risks the “burdens” the new law imposes upon them.

Under the final DHHS rule, the 10% threshold will be in effect for rate hikes starting September 1, 2011. But in subsequent years, state-specific thresholds will be developed by the states in conjunction with DHHS, reflecting local market conditions.

Only insurance policies sold to individuals and small businesses … not those offered to large employers … are initially affected by the new rules. Administration officials said they will seek additional comments on whether the rules should be expanded to so-called “association health plans,” which are sold to individuals and small businesses, but are pooled together in large groups.

Some consumer groups took issue with the 10% standard, saying the rule needed a secondary “trigger” … such as increases that go beyond medical cost inflation. Without such a second option for review, the regulation could “lock in a 9.9 percent increase as the de facto “reasonable” rate,” the advocacy group Consumer Watchdog warned in a letter to DHHS. The group also said the rules allow states to keep private from consumers more in-depth financial details from insurers … information advocates say people need to make their own judgments about rate increases. “The actual data backing up insurers’ claims will still be private in many states and the public will have no ability to question those assumptions,” said Carmen Balber, director of Consumer Watchdog’s Washington office.

Under the rules, states with “effective” rate review systems will do their own reviews of the increases. To be considered effective, states must show they collect data sufficient to determine whether a rate increase is unreasonable and allow for public comment about the increase.

If a state can’t do an effective review, or refuses to implement such reviews as required under PPACA, DHHS would do it for them.

But the law does not give the federal government the ability to reject increases. That power rests solely with the states, and therein lies one very abrasive rub: red states may attempt to block implementation in their drive to make PPACA fail. According to the National Conference of State Legislatures, about two dozen states have laws allowing regulators to approve or disapprove of some types of insurance premium changes, although how the authority is used varies widely.

May 20, 2011: Health Insurers Pay CEOs a Lot ... Res Ipsa Loquitur.

Insurance Company & CEO With 2007 Total CEO Compensation

Aetna Ronald A. Williams: $23,045,834
Cigna H. Edward Hanway: $25,839,777
Coventry Dale B. Wolf : $14,869,823
Health Net Jay M. Gellert: $3,686,230
Humana Michael McCallister: $10,312,557
U.Health Grp Stephen J. Hemsley: $13,164,529
WellPoint Angela Braly (2007): $9,094,271
L. Glasscock (2006): $23,886,169

Insurance Company & CEO With 2008 Total CEO Compensation

Aetna, Ronald A. Williams: $24,300,112
Cigna, H. Edward Hanway: $12,236,740
Coventry, Dale Wolf: $9,047,469
Health Net, Jay Gellert: $4,425,355
Humana, Michael McCallister: $4,764,309
U. Health Group, Stephen J. Hemsley: $3,241,042
Wellpoint, Angela Braly: $9,844,212

Insurance Company & CEO With 2009 Total CEO Compensation

Aetna, Ronald A. Williams: $18,058,162
Coventry, Allen Wise: $17,427,789 (took over from Dale Wolf)
WellPoint, Angela Braly: $13,108,198
United Health, Stephen Helmsley: $8,901,916
Cigna, David Cordoni: $6,593,921 (took over from CEO H. Edward Hanway)
Cigna, H. Edward Hanway: $18,800,000
Humana, Michael McCallister: 6,509,452
Health Net, Jay Gellert: $3,643,342

May 19, 2011: Was Rick Santorum the dumbest member of the Senate ever ???

Mark Salter, an aide to Senator John McCain (T-Az) noted a response to an earlier Facebook posting by former Pennsylvania Senatecritter (and reputed 2012 TeaParty/GOP candidate for the presidency) Rick Santorum (T-Pa), suggesting that Senator John McCain "didn't know what he was talking about when it came to whether torture works," responded on Facebook, saying, "For pure, blind stupidity, nobody beats Santorum. In my 20 years in the Senate, I never met a dumber member, which he reminded me of today." All you have to do is Google "santorum" and you can see why so many people agree.

screen shot from Fox News... who else

May 19, 2011: The U.S. Not Yet a Third-World Country, Says the Obama Administration, in Court Papers Supporting the Constitutionality of PPACA... at Least NOT YET!

For several years now, when discussing U.S. health care and the high number of uninsured Americans who show up at our hospital emergency rooms seeking care, sometimes in critical condition, I have used the analogy, that the United States is not yet a third-world country with Mother Teresas picking up the sick and dying in our streets… at least NOT YET. We have laws, mainly EMTALA, the “Emergency Medical Treatment and Active Labor Act,” passed in 1986 as part of the Consolidated Omnibus Budget Reconciliation Act (COBRA), requiring hospitals and ambulance services to at a minimum treat and stabilize anyone needing emergency healthcare regardless of citizenship, legal status or ability to pay. The issue of the U.S. and it’s fast-approaching third-world status has now reared its apocryphal head in the briefs filed before the 11th United States Court of Appeals in the appeal of the decision in Florida, et al. vs. U.S. Department of Health and Human Services, Case No.: 3:10-cv-91-RV/EMT, in the lawsuit filed by 26 States’ Attorney Generals, challenging the “individual mandate” provision in the Patient Protection and Affordable Care Act of 2010. In the lower court decision, a semi-retired “senior” federal district court judge, originally appointed to the bench by Ronald Reagan almost 30 years ago, held the mandate provision unconstitutional and the entire law therefore unenforceable.

The Justice Department, arguing on behalf of the Obama administration and supporting the law has filed a brief echoing my apocryphal anecdote: that the states suing over the constitutionality of the health care reform law would risk leaving uninsured Americans “on the street after a car accident” without the law’s requirement that nearly all Americans buy health insurance.

The administration is asking the 11th U.S. Circuit Court of Appeals to overturn Florida Judge Roger Vinson’s decision to strike down all of President Barack Obama’s signature domestic policy accomplishment. Government lawyers are defending the health care overhaul as merely a way of regulating how Americans pay for their health care, a completely constitutional use of Congress’s power.

Seizing on an alternative suggested in passing by the 26 states in their brief, they argue that under the states' plan, Americans would be denied access to medical care, a situation “far more draconian than the tax penalty” in the health reform law. Earlier this month, the states wrote in their own brief to the 11th Circuit that Congress cannot compel someone to buy insurance, but one legal way to ensure that people pay for medical services, the states argued, would be to impose restrictions or penalties on people who dare to attempt to get health care without insurance. Oops, that opened a door and the government has rushed to take full advantage f the opportunity.

“The ‘restrictions’ that [the states] propose would limit access to medical care … in disregard of longstanding common law and state statutes,” the administration wrote in its brief filed to the appeals court on Wednesday, May 18. “Because the need for health care is unpredictable, plaintiffs’ approach would require that individuals obtain insurance or else risk being left on the street after a car accident,” attorneys for the Obama administration wrote. Fundamentally, the federal government has been making the same point since it began defending the coverage mandate: People will inevitably need healthcare, so forcing them to buy insurance is simply a matter of regulating how those services are paid for.

The latest legal briefs represent more aggressive arguments over the law’s key provision ahead of oral arguments, which are scheduled for June 8 in Atlanta. Each side’s argument has slightly evolved over time, with the government focusing more closely on the repercussions of striking down the mandate, as one lower court judge has done, or the entire law, as Vinson did in January.

But the states, which filed their suit with the National Federation of Independent Business, argue that the motive doesn’t matter if the means -- the mandate -- is not constitutional. In more than two dozen legal challenges to the law, individuals, states and associations have argued that Congress has no right to require nearly all Americans to purchase health insurance -- a key provision of the law. The states argued in their brief to the 11th Circuit earlier this month that if Congress can impose the mandate, it would also be able to “order individuals to eat more vegetables and fewer desserts, to exercise at least 45 minutes per day, to sleep at least eight hours per day and to drink one glass of wine a day but never any beer. Congress could rationally conclude that such mandates would control health care costs more directly, and perhaps more effectively, than ordering people to pay for services in a particular way.”

Justice Department lawyers have tried to reshape the so-called individual mandate as not a requirement to buy insurance but rather a requirement to pay for health care through insurance.

“Congress did not exceed its commerce power by opting to require minimum insurance coverage or the payment of a tax, instead of conditioning access to health care on the purchase of insurance and thereby denying the sick and injured access to medical care if they do not have coverage,” they wrote on Wednesday.

In addition to challenging the “individual mandate,” the 26 states and NFIB also argued that the new law’s expansion of coverage under the Medicaid program -- in which money is disbursed to the states -- and for which the federal government will bear the lion's share of the costs for doing so, is “impermissibly coercive.” They cannot, said the states, realistically be expected to turn down such federal funds.

"No court has ever invalidated a condition on federal spending on a 'coercion' theory and several courts of appeals have rejected similar challenges to previous amendments to the Medicaid program," the federal government said in its 62-page court response.

The Atlanta-based court will be the third federal appeals court to hear argument over the legality of the legislation. The Fourth U.S. Circuit Court of Appeals in Richmond, Virginia heard arguments on May 10 on the appeals of rulings by two federal judges in that state, one of whom upheld the act’s constitutionality and another who held the individual mandate portion alone invalid.

The Sixth U.S. Circuit Court of Appeals in Cincinnati is set to hear arguments June 1 in an appeal by Thomas More Law Center, a nonprofit law group that advocates for Christian values, of a Detroit federal judge’s ruling last year upholding the law. Inconsistent decisions rendered by the three appellate panels may set the stage for later review by the U.S. Supreme Court.

May 18, 2011: Are you smart enough to tell the difference between Obamacare (PPACA) and RomneyCare? (... extracted from politifact.com)

Here are 10 descriptions of the plans taken from the published, official summaries of each law. See if you know whether each description is for Obamacare or RomneyCare.

1. "Individuals who are deemed able to afford health insurance but fail to comply are subject to penalties for each month of non-compliance in the tax year ... . The penalties, which will be imposed through the individual’s personal income tax return, shall not exceed 50% of the minimum monthly insurance premium."

2. Employers "who employ 11 or more full-time equivalent employees" and do not make a "fair and reasonable contribution" to their employees' health insurance are required to pay a fine.

3. "Tax credits to make it easier for the middle class to afford insurance will become available for people with income between 100 percent and 400 percent of the poverty line who are not eligible for other affordable coverage."

4. Children and adolescents up to age 18 "whose financial eligibility as determined by the division exceeds 133 per cent but is not more than 300 per cent of the federal poverty level" will be eligible for Medicaid.

5. "Americans who earn less than 133 percent of the poverty level (approximately $14,000 for an individual and $29,000 for a family of four) will be eligible to enroll in Medicaid."

6. A recent poll asked people whether they had a generally favorable or unfavorable view of the health plan. Responses split 41 percent and 41 percent between favoring and not favoring. Another 18 percent said they were undecided.

7. Small businesses qualify for tax credits if they pay for at least half of the workers' health insurance. A small business is defined as having fewer than 25 full-time workers paid average annual wages below $50,000.

8. Experience shows the plan is not significantly going to lower costs. Supporters of the law are actively considering new legislation aimed at cost containment.

9. The plan creates a Patient-Centered Outcomes Research Institute "to conduct research to provide information about the best available evidence to help patients and their health care providers make more informed decisions."

10. For individuals who make more than $200,000 or couples that make more than $250,000, the plan increases Medicare taxes on wages in 2013 by 0.9 percent and imposes a 3.8 percent tax on investment income.

So how many did you get right? (Answers below)

All 10: You're CBO Gold! You qualify to be an analyst at the Congressional Budget Office!

8-9: Lobbyist Silver! You're good enough to be a health care lobbyist! Watch out, Jeanne Matthews!

6-7: Bronze Policy Wonk Circle! You can be a researcher at the Kaiser Family Foundation -- or Ezra Klein!

5-6: Talking Head Honorable Mention. You're good enough for shouting matches on cable news channels!

3-4: Pollster's "don't knows." It's hard to have an opinion when you don't know what's in the plan!

0-2: Chain E-Mail Level. You forward chain e-mails that say the federal health care law puts a tax on real estate.

ANSWERS:

1. RomneyCare

Source: Massachusetts Department of Revenue, TIR 09-25: Individual Mandate Penalties for Tax Year 2010
Note: Both plans have individual mandates. The federal penalties start small, but eventually ramp up to $695 per year or 2.5 percent of income, whichever is higher. Eventually, federal penalties will tend to be higher than the Massachusetts plan.

2. RomneyCare

Source: Massachusetts Department of Revenue, Health Care Information for Employers
Note: Federal law exempts employers with fewer than 50 workers. Additionally, under the federal plan, employers pay fines only if their workers qualify for tax credits to buy insurance.

3. Obamacare

Source: HealthCare.gov, Provisions of the Affordable Care Act, By Year
Note: The Massachusetts law also provides subsidized health insurance, but the income cut-off is 300 percent of the federal poverty level.

4. RomneyCare

Source: Massachusetts health care law
Note: The Massachusetts law expanded Medicaid for children. The federal law expands Medicaid to adults, but sets the cut-off at 133 percent of the federal poverty level.

5. Obamacare

Source: HealthCare.gov, Provisions of the Affordable Care Act, By Year
Note: The Massachusetts law expanded Medicaid for children. The federal law expands Medicaid to adults, but sets the cut-off at 133 percent of the federal poverty level.

6. Obamacare

Source: The Kaiser Family Foundation, Kaiser Health Tracking Poll, April 2011
Note: Polls show the federal law has split public opinion. Polls in Massachusetts show the program is significantly more popular.

7. Obamacare

Source: Internal Revenue Service, Small Business Health Care Tax Credit for Small Employers
Note: Tax credits start at 35 percent of the employer's health premium costs and increase to 50 percent in 2014.

8. RomneyCare

Source: Gov. Deval Patrick, Patrick-Murphy administration proposes comprehensive health care cost containment legislation, Feb. 17, 2011; AP, Lawmakers hear bill to rein in Mass. health costs, May 16, 2011

9. Obamacare

Source: U.S. Government Accountability Office, Patient-Centered Outcomes Research Institute (PCORI) Governing Board; Patient-Centered Outcomes Research Institute (PCORI), About Us

10. Obamacare

Source: Kaiser Family Foundation, summary of new health reform law

May 17, 2011: Paul Ryan is One Funny Guy!

May 16, 2011: Socialized Medicine is Here! They Will Only Pay for "Quality" Health Care ... as Only They Will Define It!

Oops, as the late, great Gilda Radner used to say in the character of Emily Litella: "NEVER MIND"

All the whoopin' and hollerin' from TeaParty/GOPers about socialized medicine and the government takeover of health care with bureaucrats making the decisions overlooks and betrays real concerns we need to have over the way the private sector is "managing" the nation's health care. Actually, I want to applaud Wellpoint/Anthem for this action... but I need to qualify my acclamation with the caveat... can you imagine the outcry from the TeaParty/GOP if this announcement actually did come from the federal government? There would be no end to Fox News commentators exorcising Obama, Democrats and liberals as closet communists bent on destroying American values.

A truly reasonable and almost virtuous decision to really take deep down and serious looks at how health care is being delivered is part and parcel of PPACA: PPACA says we must honestly start asking our health care system, its providers and practitioners, whether everything being provided as health care is actually necessary; whether everything provided is actually being done well within accepted professional standards; whether there may be better (and sometimes less intrusive and expensive) things which might be done; and whether the payments made cover the real costs and act as a true incentive to quality and effective health care delivery? Good questions all.

Well, guess what? PPACA is already doing the same thing as Wellpoint/Anthem says it will do... with one important distinction. Under Wellpoint/Anthem, the definitions and the standards are dictated from the top by a corporate bureaucrat. If you don't agree or believe the decisions made are wrong, what is your alternative? To whom can you appeal? What due process procedures are given? In the private sector, there may or may not be an avenue of relief from bureaucratic excess. If anecdotal evidence of past private health insurer decisions are any guide, the road is bumpy and littered with pitfalls. Corporate profits trump patient care consistently. Under government guidelines (which actually are already quite similar to Wellpoint/Anthem) and regulations there are established appeal mechanisms and ultimately judicial review should egregious government action justify such intervention. In the private sector, "relief" comes all too often in the form of lawsuits by "the estate of ___," after the patient has died while thrashing his or her way through the impenetrable corporate morass. ... Government bureaucrats can be held accountable, private sector bureaucrats seldom are. The standards and guidelines to be invoked by the government as differentiated from those coming down from the corporate hierarchies of private health insurers (whose "bonuses" may depend on denying payments) will come only after extensive public airing opportunities for comment and challenge. Private insurers can and do change the "rules of the game," frequently when they find themselves "losing," without notice or appeal.

... and in case you missed it (because your local paper carries only "happy news") ....

Health Insurers Making Record Profits as Many Postpone Care

http://www.nytimes.com/2011/05/14/business/14health.html?_r=1

May 13, 2011: What Conservatives Won In Health Reform (And Don’t Seem to Know It)

Conservatives obviously don't like what they call "Obamacare" because they think it expands the role of government too much and spends too much money. But ironically, the Patient Protection and Affordable Care Act (PPACA) actually promotes -- though not explicitly -- something that has been a fundamental objective of conservatives in health care for years: high-deductible health plans with more "skin in the game."

[Note: Other Kaiser Family Foundation (KFF) polls have shown that when the pejorative term “Obamacare” is not used to describe the new health reform legislation, the public perception and responses to the law are significantly more favorable than when the initial question is posed as “Obamacare.”]

In a new study just released by the Kaiser Family Foundation, KFF commissioned three different actuarial consulting firms to estimate what deductibles may look like for people buying coverage in the new health insurance exchanges beginning in 2014. The analysis was complex because the levels of coverage in PPACA are specified using an "actuarial value" (the percentage of health care expenses the plan is expected to cover for a typical population of enrollees). Now to the general public, “actuarial value” is not exactly a concept that is easily understood or seemingly makes a whole lot of sense. The combination of deductible and coinsurance amounts that satisfy an actuarial value -- which determine how much someone with a given level of health expenses will pay out-of-pocket -- will vary from plan to plan and can only be estimated at this point. That's the reason KFF used three firms -- to surround a difficult technical task.

The three firms produced a wide range of estimates (a notable result in itself, and one that has implications for consumers and for federal policymakers now writing the regulations that will guide how state exchanges operate). But significantly, in all cases, the deductibles were high -- ranging from $2,750 with 30% coinsurance to $6,350 with no coinsurance for an individual policy for the basic Bronze plan in 2014, which is the minimum people can buy and satisfy the so-called "individual mandate." Patient out-of-pocket costs would be capped at $6,350, an amount that's specified in PPACA. All of these amounts would be double for a family policy.

These are high levels of cost sharing by any standard, although PPACA also ensures improvements in the quality of the insurance people get and offers a better deal for many people than is now available in the broken, non-group market. For example, it prohibits denials of coverage based on health status, provides access to preventive services with no cost sharing, and specifies an essential benefits package for all plans offering coverage in the exchanges and the small- and non-group markets.

These higher deductibles are also consistent with the trends KFF says it had been seeing in the marketplace. KFF’s 2010 employer survey found that the share of workers enrolled in a higher-deductible plan (with a deductible of $1,000 or more for single coverage) has nearly tripled since 2006. Almost half of all workers in small firms are now enrolled in such a plan. It is possible that PPACA will accelerate these trends by establishing a standard for coverage with high deductibles as a matter of national policy once the exchanges are in place.

Conservatives (and some economists) have always favored more "skin in the game," arguing that it will incentivize consumers to be more prudent purchasers of health services and hold down utilization of health care overall. They particularly favor high-deductible plans tied to tax-preferred savings accounts. According to KFF’s study, both Bronze and Silver Plans in the PPACA-established exchanges would have deductibles that meet the standards for Health Savings Accounts. It is possible, but hard to prove, that one of the factors responsible for the historically moderate increases in employer premiums in recent years has been increases in deductibles and other forms of cost sharing, which (along with the recession) may have caused workers to use less health care. Many liberals believe in comprehensive coverage without much “skin in the game.” Many health services researchers who have examined this question worry that plans with too much up front cost sharing will cause people to defer needed care, impose an added burden on families' economic security, and present special risks for the chronically ill if they defer care.

The deductibles in PPACA have not been a focus to date for several reasons. The Congressional Budget Office, Congress' official budget scorekeeper, released estimates of premium costs but not deductibles. Also, reducing deductible levels through higher actuarial values would have added to the cost of the legislation, which was already a hot issue. And, the advocacy community mostly focused its attention elsewhere, especially on the public option and on subsidies for lower income enrollees in the exchanges (which lower this high cost sharing for people with incomes up to 2.5 times the poverty level).

It is possible that in the future, once PPACA is fully in place, there will be pressure to reduce deductible levels to make out-of-pocket costs more affordable. But there will be countervailing pressure to keep premiums down, and deductibles are likely to remain high, consistent with trends in the marketplace.

Just Between You and Me: A different way of looking at PPACA is that it represents a bargain between liberals and conservatives, although not one that was ever explicitly made. The left got 32 million people covered and reforms that eliminate the worst abuses in the health insurance system. And the right got a further push, beyond the momentum already underway in the market, towards just the kind of "skin in the game" insurance they have always believed will help control health care costs. It’s the big victory in health reform conservatives seem not to realize they have won.

May 12, 2011: ‘RomneyCare’ Facts and Falsehoods

A great read: check it out ... http://factcheck.org/2011/03/romneycare-facts-and-falsehoods/

http://www.health-politics.com/issue.html#goodbadideas

May 11, 2011: Hannah's Wednesday Cartoon:

Been waiting a week for this un.

May 11, 2011: Women at Risk: Why Increasing Numbers of Women Are Failing to Get the Health Care They Need and How the Patient Protection and Affordable Care Act Will Help

Women have greater health care needs than men, and generally play larger roles in the health care of family members. Rising health care costs combined with sluggish income growth has contributed to losses in health insurance among women and rising rates of problems gaining necessary health care and paying medical bills. Women who seek coverage in the individual insurance market face additional hurdles -- few plans offer maternity coverage and, in most states, insurance carriers charge higher premium rates to young women than men of the same age. The Patient Protection and Affordable Care Act (PPACA) is bringing change for women through required free coverage of preventive care services, small business tax credits, new affordable coverage options, and insurance market reforms, including bans on gender rating. When the law is fully implemented in 2014, nearly all the 27 million working-age women who went without health insurance in 2010 will gain affordable and comprehensive benefits.

Just a note: Arizona remains crappy for women... <sigh>

May 10. 2011: Kaiser Study: 44 million could lose Medicaid coverage under GOP plan

The path to new poverty:

House TeaParty/Republican plans to repeal the new healthcare law and to convert the Medicaid insurance program into a block grant to states could force as many 44 million poor and disabled Americans out of the program over the next decade, according to a new analysis by the nonprofit Kaiser Family Foundation.

Hardest hit would be states, many in the South and West, that have not built up their healthcare safety nets in recent years. These states would have received a large influx of federal money in the healthcare law President Obama signed last year. In 2014, the law will make all Americans making less than 133% of the federal poverty level eligible for Medicaid.

The House TeaParty/GOP plan, authored by Budget Committee chairman Paul Ryan (T-Wis.), would eliminate that expansion and also slash $750 billion in federal spending on Medicaid over the next decade. The plan was approved by the House last month, though it is not expected to pass the Democratic-controlled Senate. The Medicaid program, which insures more 50 million poor and disabled people, is jointly funded by the federal government and by the states, each of which operates a slightly different program.

Because of these differences, the cuts to each state would vary widely, according to the analysis of Ryan's plan. Florida, for example, could see a 44% cut in federal funding for its Medicaid program by 2021, the report concludes.

Other states projected to see major cutbacks in federal aid include Wyoming, Alaska, Colorado, Georgia, Oregon and Nevada.

Nationally, the Kaiser report estimates that federal assistance for Medicaid will drop 34%. Illinois, with a projected 32% cut, and California, with a 31% cut, are expected to suffer relatively less than some other states. Least affected would be Washington, Vermont, Minnesota, the District of Columbia and Iowa.

Many states are already struggling to hold together their Medicaid programs while trying to balance budgets and deal with millions of new enrollees who signed up for the insurance program during the last recession.

Ryan has touted his budget plan as a way to preserve Medicaid by offering states more flexibility to wring savings from their programs. "States will no longer be shackled by federally determined program requirements and enrollment criteria," he said of the block grants. But many experts -- including the nonpartisan Congressional Budget Office -- have concluded that House budget proposal would more likely simply result in major cutbacks.

"The repeal of PPACA combined with the adoption of the Medicaid block grant would add millions more to the number of uninsured Americans and compromise Medicaid's role as the health safety net in the next recession," said Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured.

May 9, 2011: TeaParty/GOP Ransom Notes:

May 8, 2011: Tax Cuts/LoopHoles for the Rich are Costing a Lot:

What are Bush-Era Tax Cuts Really Costing Us?

May 3, 2011: Yeah Right, It Was George W. Bush Who Captured Osama bin Laden ...

Bush: Truly not concerned about bin Laden (short version)

www.youtube.com

And President Obama was the wimp who did nothing, just as he said he would do during the 2008 campaign, when Republicans were the ones calling for aggressive action against al Qaeda and Osama... NOT!

As then candidate Barack Obama during a presidential debate in October 2008:

“I understand that (Pakistan) President Musharraf has his own challenges. But let me make this clear. There are terrorists holed up in those mountains who murdered 3,000 Americans. They are plotting to strike again. It was a terrible mistake to fail to act when we had a chance to take out an al-Qaida leadership meeting in 2005. If we have actionable intelligence about high-value terrorist targets and President Musharraf won’t act, we will.”

So naturally, Republicans like John McCain had to reflexively oppose him.

“Sen. John McCain of Arizona, close to clinching the GOP nomination, called Sen. Barack Obama ‘naive’ today and…blasted him for advocating a bombing of Al Qaeda hide-outs in Pakistan,” the Los Angeles Times reports.

As did The Quitter-Chief herself, Sarah Palin:

Sarah Palin’s pointed criticism of Barack Obama’s foreign policy agenda Tuesday morning included a swipe at Obama’s stated commitment to strike at terrorists inside Pakistan’s borders if they are in the sights of the American military.
“Senator Obama has also advocated sending our U.S. military into Pakistan without the approval of the Pakistani government,” Palin said. “Invading the sovereign territory of a troubled partner in the war against terrorism.”

And best of all — Commander McFlightsuit George W. Bush:

Appearing today on Fox News Sunday, President Bush laid into Sen. Barack Obama, claiming he would “attack Pakistan” and “embrace” Iran’s president Mahmoud Ahmadinejad.
“I certainly don’t know what he believes in,” Bush said when asked if there had been a “rush to judgment” about Obama. “The only foreign policy thing I remember he said was he’s going to attack Pakistan and embrace Ahmadinejad.”

But if you read right wing print media and listen to the right wing broadcast media and track the right wing social networks, you won't be told about any of this. They were out to get him all along and if hadn't been for them Osama would still be enjoying the luxury of his million dollar mansion in he resort suburbs of Islamabad, Pakistan. <sigh> Never the truth get in the way.

May 1, 2011: LAW DAY, USA!

Today is Law Day, did you remember to hug a lawyer today?

April 28, 2011: The National Debt: by Presidential Administration

April 27, 2011: The TeaParty/GOP Ryan Medicare Plan in Action: 2022 (Enrolling in Medicare, 2022 ... er, make that 2024)

Medicare Office. 9am, May 1, 2022:

Bureaucrat: Good morning. May I help you?
Senior: Yes! I just turned 65 and I'd like my Medicare, please.

B: Sorry, under the Republican budget law enacted in 2011, you must now be 67 before you qualify for Medicare.

S: But because of my age and health, I can't afford the coverage offered to me by private insurers and I had to retire this year and no longer have my company’s group health insurance.

B. That’s not our problem, we can’t make employer’s cover any part of their retired employee’s health plan before they qualify for Medicare, and the private market is free to charge anything they want for health coverage, the age and pre-existing condition limitation provision in ex-President Obama’s health reform plan was repealed in 2011.

S. But, but…

B. [guh-bye… ker-slam]

Medicare Office. 9am, May 1, 2024:

Bureaucrat: Good morning. May I help you?
Senior: Yes! I just turned 67 and I'd like my Medicare, please.

B: Of course. Here you go.
S: What is this, a coupon?

B: No, silly. It only looks like a coupon. But it's really premium support!
S: Oh. So what do I do with this, um, premium support?

B: I'm glad you asked! You just hop on the phone and order up some health insurance from an authorized private-sector provider! Be sure you tell 'em you have a Certificate of Really Awesome Protection.
S: Wait, you're giving me…

B: Yup! We're giving you CRAP. Aren’t you lucky to live in America!
S: So this will pay for my healthcare in my golden years?

B: Yup! CRAP pays for all your healthcare except for the healthcare it doesn’t pay for.
S: What doesn’t this CRAP pay for?

B: Oh, this and that. Your authorized insurance provider will give you all the details on what kind of CRAP-based plan you'll get!
S: My neighbor says she tried to use her coupon…er, CRAP…and they made her pay so much out of her own pocket that she had to move in with her son's family.

B: Well, y'know, we all need to sacrifice. Tough times and all.
S: But wasn't the Ryan Plan supposed to make things better?

B: Yes! And it did! Thanks to Ryan's CRAP, people who make over a million dollars per year are finally free of that oppressive double-digit tax bracket.
[Ring Riiiing!]
B: I really have to take this call. But thanks for stopping by and good luck staying healthy! Oh, and before you go…
S: Yes?

B: Would you like a CRAP sandwich?
S: Thanks, but I think you just gave me one.

April 27, 2011: HAPPY BIRTHDAY to the Universe:

Happy birthday today to the universe, at least as far as the great astronomer Johannes Kepler had calculated it: It was on this day in 4977 B.C. according to Kepler, who believed he had discovered God’s geometrical plan for the universe. Much of Kepler’s enthusiasm for the Copernican system stemmed from his theological convictions about the connection between the physical and the spiritual; the universe itself was an image of God, with the Sun corresponding to the Father, the stellar sphere to the Son, and the intervening space between to the Holy Spirit. OK, he was off by 42,000 +/- years if you are a "creationist" and by 4-5 BILLION years according to modern science, but who's counting.

April 27, 2011: Granddaughter Hannah's Wednesday "Cartoon"

I had to look up their names. That's how hard I don't care.

April 26, 2011: Realizing Health Reform’s Potential: Will the Affordable Care Act Make Health Insurance Affordable?

Using a budget-based approach to measuring affordability, a new Commonwealth Fund issue brief explores whether the subsidies available through the Patient Protection and Affordable Care Act (PPACA) are enough to make health insurance affordable for low-income families. Drawing from the Consumer Expenditure Survey, the authors assess how much "room" people have in their budget, after paying for other necessities, to pay for health care needs. The results show that an overwhelming majority of households have room in their budgets for the necessities, health insurance premiums, and moderate levels of out-of-pocket costs established by PPACA. Fewer than 10 percent of families above the federal poverty level do not have the resources to pay for premiums and typical out-of-pocket costs, even with the subsidies provided by the health reform law. Affordability remains a concern for some families with high out-of-pocket spending, suggesting that this is the major risk to insurance affordability.

Citation

http://www.commonwealthfund.org/~/media/Files/Publications/Issue%20Brief/2011/Apr/1493_Gruber_will_affordable_care_

act_make_hlt_ins_affordable_reform_brief_v2.pdf

J. Gruber and I. Perry, Realizing Health Reform’s Potential: Will the Affordable Care Act Make Health Insurance Affordable? The Commonwealth Fund, April 2011.

April 25, 2011: Cut Entitlements, AND RAISE TAXES

April 23, 2011: Deficit Frenzy! Is Our Nation's Debt Really Our Biggest Problem?

[From "Digby"] .... The entire political world has descended into a deficit frenzy that rivals the mass hysteria of the Salem witch trials. The mania has been growing for months, but exploded this past month when D.C. heartthrob TeaParty/GOP Housecritter Paul Ryan unveiled what was widely received as the most important document since the Emancipation Proclamation and the entire political establishment started babbling about “brio” and “courage.”

Nothing else matters at this point … not anemic economic growth, not sustained, shockingly high unemployment, not a Middle East uprising of world-changing consequence … not even an epic nuclear catastrophe. Senatecritter Saxby Chambliss (T-Ga.) said on CNN that the deficit is “the most significant national security interest that the United States is facing today.” And that’s with the U.S. currently involved in three wars! (Well, two wars and one “kinetic military action.”)

Oddly, even with budget terror consuming every waking moment, many insist on tackling a projected shortfall in Social Security that will not materialize until 2037. In fact, it is currently in surplus, safely invested in U.S. treasury bills that help finance the government. Nonetheless, they insist that this potential problem far into the future must be dealt with immediately. Former Senatecritter John Warner (R-Va.) explained, “What we want to make sure is that there’s going to be Social Security 75 years from now, and the idea that we should just punt on this problem because there is still some money left in the trust fund makes no sense to me.”

Considering the lack of interest in the job-creation crisis or the looming catastrophic future crisis of climate change, this nonsensical insistence on injecting Social Security into the mix can only be seen as another symptom of the deficit delirium that has overtaken the Capitol. It reached such a pitch that the government was nearly shut down over spending on Pap smears and the president, a man commonly accused of being a socialist by political rivals, rushed to take credit for the largest spending cuts in history. It may still cause economic catastrophe if the nation’s “debt ceiling” is not raised and the country begins defaulting on defaulting on its debts. One would have thought that would break the fever, but it shows no signs of abating.

Unless some old and sick people are thrown onto the bonfire, many Americans now seem to believe we will never purge the deficit demon from our body politic.

There are those who seem to be immune. Investors appear unmoved by the frenzy, buying U.S. treasury bonds even at historically low interest rates. Respected economists aren’t affected either, pointing out that the more immediate concern for our economic health is slow growth and high unemployment. According to Paul Krugman, more than half the deficit was caused by the plunge in tax receipts and the need to stimulate the economy, so big deficits at a time like this are both appropriate and necessary.

Government spending didn’t cause our economic problems, and it’s delusional to think cutting it will solve them. But the powers that be are apparently going to forge on and try to immediately “reform entitlements” to prove that they are Very Serious about purging the phantoms the moneyed interests have created to explain why the American Dream is turning into a nightmare. Let’s hope this fever burns itself out before it causes permanent damage.

April 19, 2011: USA Life Expectancy at Birth Lags Major Industrial Nations

The 2009 OECD "health statistics" report (the last on available) has lots of really cool ... or is that "cruel" ... stuff regarding comparisons of U.S. health care to other industrialized nations. We really stink!

Take Life Expectancy at Birth, for example. The only thing we can take consolation over is that we rank ahead of Turkey:

And as bad as that is, when we see how much the USA pays, per capita in health care compared to these other nations, we really, really suck.

Talk about outliers!

April 19, 2011: Only the "Little People" Pay Any "REAL" Taxes

Leona Helmsley was the billionaire real estate baroness New Yorkers loved to hate. She was famous for humiliating her household help and staff at her hotels. When it came to home improvement, she routinely charged it as a business expense or simply left her contractors unpaid. Her greed eventually led to prosecution in 1988 by then New York District Attorney Rudy Giuliani. Helmsley received a four year sentence for fraud and tax evasion. She served eighteen months. When she died in 2007 the Queen of Mean left her relatives in the cold and the bulk of her fortune to charity. Trouble Helmsley, Leona’s Maltese poodle, got a $12 million trust fund, took up residence at the Helmsley Sandcastle hotel, and by all reports was indifferent to the New York Post headline calling her a “rich bitch.”

The infamous Helmsley is probably most remembered for her quote revealed during her trial. Helmsley’s former maid quoted her boss as saying: “We don’t pay taxes. The little people do.” Not since Marie Antoinette told starving Parisians to eat cake has callous royalty done so much to stir up populist fervor. Luckily for Helmsley the little people on the jury did not have the guillotine as a sentencing option.

Martin Sullivan, a tax guru put together a little chart this year, after surveying residents at Helmsley's old "high rent" apartment building. It's janitor is paying a higher tax rate than the average resident:

This echoes the statement made last year by multi-billionaire Warren Buffet, saying in effect that his secretary was paying a higher percentage of her income in taxes than he was. The "effective" tax rate for the extremely wealthy is in almost every instance LOWER than for the average American middle income family. And under the tax policies being pushed by TeaParty/Republicans, that gap is growing ever larger. But according to Fox News, if you focus on these issues, you are "waging class warfare." Go figure.

For more: http://motherjones.com/politics/2011/04/taxes-richest-americans-charts-graph

April 19, 2011: Medicare Will Not Be Destroyed and There Will Be No "Voucher" System to Replace It, Says President Obama

If you would like to see or review this blog item, please contact Jeanne at: jeanne,matthews@health-politics.com

April 18, 2011: Supply Side

April 17, 2011: David Cay Johnston: Nine Things the Rich Don't Want You Know About Taxes

The following is an article that appeared this week on U.S. tax policy. I have to admit that I knew some of these things but I didn't actually realize how out of whack U.S. tax policy had become. I just had to share it. The emphasis added is mine and I did add just a couple of jeanne-isms.

David Cay Johnston is a columnist for tax.com and teaches the tax, property and regulatory law of the ancient world at Syracuse University College of Law and Whitman School of Management. He has also been called the “de facto chief tax enforcement officer of the United States” because his reporting in The New York Times shut down many tax dodges and schemes, just two of them valued by Congress at $260 billion. Johnston received a 2001 Pulitzer Prize for exposing tax loopholes and inequities. He wrote two bestsellers on taxes, Perfectly Legal and Free Lunch. Later this year, Johnston will be out with a new book, The Fine Print, revealing how big business, with help from politicians, abuses plain English to rob you blind.

1. Poor Americans do pay taxes.

2. The wealthiest Americans don’t carry the burden.

3. In fact, the wealthy are paying less taxes.

4. Many of the very richest pay no current income taxes at all.

5. And (surprise!) since Reagan, only the wealthy have gained significant income.

6. When it comes to corporations, the story is much the same -- less taxes.

7. Some corporate tax breaks destroy jobs.

8. Republicans like taxes too.

9. Other countries do it better.

For three decades we have conducted a massive economic experiment, testing a theory known as supply-side economics. The theory goes like this: Lower tax rates will encourage more investment, which in turn will mean more jobs and greater prosperity—so much so that tax revenues will go up, despite lower rates. The late Milton Friedman, the libertarian economist who wanted to shut down public parks because he considered them socialism, promoted this strategy. Ronald Reagan embraced Friedman’s ideas and made them into policy when he was elected president in 1980.

For the past decade, we have doubled down on this theory of supply-side economics with the tax cuts sponsored by President George W. Bush in 2001 and 2003, which President Obama has agreed to continue for two years.

You would think that whether this grand experiment worked would be settled after three decades. You would think the practitioners of the dismal science of economics would look at their demand curves and the data on incomes and taxes and pronounce a verdict, the way Galileo and Copernicus did when they showed that geocentrism was a fantasy because Earth revolves around the sun (heliocentrism). But economics is not like that. It is not like physics with its laws and arithmetic with its absolute values.

Tax policy is something the framers left to politics. And in politics, the facts often matter less than who has the biggest bullhorn.

The Mad Men who once ran campaigns featuring doctors extolling the health benefits of smoking are now busy marketing the dogma that tax cuts mean broad prosperity, no matter what the facts show.

As millions of Americans prepare to file their annual taxes, they do so in an environment of media-perpetuated tax myths. Here are a few points about taxes and the economy that you may not know, to consider as you prepare to file your taxes. (All figures are inflation-adjusted.)

1. Poor Americans do pay taxes.

Gretchen Carlson, the Fox News host, said last year “47 percent of Americans don’t pay any taxes.” John McCain and Sarah Palin both said similar things during the 2008 campaign about the bottom half of Americans.

Ari Fleischer, the former Bush White House spokesman, once said “50 percent of the country gets benefits without paying for them.”

Actually, they pay lots of taxes -- just not lots of federal income taxes.

Data from the Tax Foundation show that in 2008, the average income for the bottom half of taxpayers was $15,300. This year the first $9,350 of income is exempt from taxes for singles and $18,700 for married couples, just slightly more than in 2008. That means millions of the poor do not make enough to owe income taxes. But they still pay plenty of other taxes, including federal payroll taxes. Between gas taxes, sales taxes, utility taxes and other taxes, no one lives tax-free in America.

When it comes to state and local taxes, the poor bear a heavier burden than the rich in every state except Vermont, the Institute on Taxation and Economic Policy calculated from official data. In Alabama, for example, the burden on the poor is more than twice that of the top 1 percent. The one-fifth of Alabama families making less than $13,000 pay almost 11 percent of their income in state and local taxes, compared with less than 4 percent for those who make $229,000 or more.

2. The wealthiest Americans don’t carry the burden.

This is one of those oft-used canards. Senate Rand Paul, the tea party favorite from Kentucky, told David Letterman recently that “the wealthy do pay most of the taxes in this country.”

The Internet is awash with statements that the top 1 percent pays, depending on the year, 38 percent or more than 40 percent of taxes.

It’s true that the top 1 percent of wage earners paid 38 percent of the federal income taxes in 2008 (the most recent year for which data is available). But people forget that the income tax is less than half of federal taxes and only one-fifth of taxes at all levels of government.

Social Security, Medicare and unemployment insurance taxes (known as payroll taxes) are paid mostly by the bottom 90 percent of wage earners. That’s because, once you reach $106,800 of income, you pay no more for Social Security, though the much smaller Medicare tax applies to all wages. Warren Buffett pays the exact same amount of Social Security taxes as someone who earns $106,800.

3. In fact, the wealthy are paying less taxes.

The Internal Revenue Service issues an annual report on the 400 highest income-tax payers. In 1961, there were 398 taxpayers who made $1 million or more, so I compared their income tax burdens from that year to 2007. Despite skyrocketing incomes, the federal tax burden on the richest 400 has been slashed, thanks to a variety of loopholes, allowable deductions and other tools. The actual share of their income paid in taxes, according to the IRS, is 16.6 percent. Adding payroll taxes barely nudges that number.

Compare that to the vast majority of Americans, whose share of their income going to federal taxes increased from 13.1 percent in 1961 to 22.5 percent in 2007.

(By the way, during seven of the eight George W. Bush years, the IRS report on the top 400 taxpayers was labeled a state secret, a policy that the Obama administration overturned almost instantly after his inauguration.)

4. Many of the very richest pay no current income taxes at all.

John Paulson, the most successful hedge-fund manager of all, bet against the mortgage market one year and then bet with Glenn Beck in the gold market the next. Paulson made himself $9 billion in fees in just two years. His current tax bill on that $9 billion? Zero. Congress lets hedge-fund managers earn all they can now and pay their taxes years from now. In 2007, Congress debated whether hedge-fund managers should pay the top tax rate that applies to wages, bonuses and other compensation for their labors, which is 35 percent. That tax rate starts at about $300,000 of taxable income -- not even pocket change to Paulson, but almost 12 years of gross pay to the median-wage worker.

The Republicans and a key Democrat, Senatecritter Charles Schumer of New York, fought to keep the tax rate on hedge-fund managers at 15 percent, arguing that the profits from hedge funds should be considered capital gains, not ordinary income, which got a lot of attention in the news.

What the news media missed is that hedge-fund managers don’t even pay 15 percent. At least, not currently. So long as they leave their money, known as “carried interest,” in the hedge fund, their taxes are deferred. They only pay taxes when they cash out, which could be decades from now for younger managers. How do these hedge-fund managers get money in the meantime? By borrowing against the carried interest, often at absurdly low rates -- currently about 2 percent.

Lots of other people live tax-free, too. I have Donald Trump’s tax records for four years early in his career. He paid no taxes for two of those years. Big real-estate investors enjoy tax-free living under a 1993 law President Clinton signed. It lets “professional” real-estate investors use paper losses like depreciation on their buildings against any cash income, even if they end up with negative incomes like Trump.

Frank and Jamie McCourt, who own the Los Angeles Dodgers, have not paid any income taxes since at least 2004, their divorce case revealed. Yet they spent $45 million one year alone. How? They just borrowed against Dodger ticket revenue and other assets. To the IRS, they look like paupers.

In Wisconsin, Terrence Wall, who unsuccessfully sought the Republican nomination for U.S. Senate in 2010, paid no income taxes on as much as $14 million of recent income, his disclosure forms showed. Asked about his living tax-free while working people pay taxes, he had a simple response: Everyone should pay less.

5. And (surprise!) since Reagan, only the wealthy have gained significant income.

The Heritage Foundation, the Cato Institute and similar conservative marketing organizations tell us relentlessly that lower tax rates will make us all better off.

“When tax rates are reduced, the economy’s growth rate improves and living standards increase,” according to Daniel J. Mitchell, an economist at Heritage until he joined Cato. He says that supply-side economics is “the simple notion that lower tax rates will boost work, saving, investment and entrepreneurship.”

When Reagan was elected president, the top marginal tax rate (the tax rate paid on the last dollar of income earned) was 70 percent. He cut it to 50 percent and then 28 percent starting in 1987. It was raised by George H.W. Bush and Clinton, and then cut by George W. Bush. The top rate is now 35 percent.

Since 1980, when Reagan won the presidency promising prosperity through tax cuts, the average income of the vast majority -- the bottom 90 percent of Americans -- has increased a meager $303, or 1 percent. Put another way, for each dollar people in the vast majority made in 1980, in 2008 their income was up to $1.01.

Those at the top did better. The top 1 percent’s average income more than doubled to $1.1 million, according to an analysis of tax data by economists Thomas Piketty and Emmanuel Saez. The really rich, the top one-tenth of 1 percent, each enjoyed almost $4 in 2008 for each dollar in 1980.

The top 300,000 Americans now enjoy almost as much income as the bottom 150 million, the data show.

6. When it comes to corporations, the story is much the same -- less taxes.

Corporate profits in 2008, the latest year for which data are available, were $1,830 billion, up almost 12 percent from $1,638.7 billion in 2000. Yet, even though corporate tax rates have not been cut, corporate income-tax revenues fell to $230 billion from $249 billion—an 8 percent decline, thanks to a number of loopholes. The official 2010 profit numbers are not added up and released by the government, but the amount paid in corporate taxes is: In 2010 they fell further, to $191 billion—a decline of more than 23 percent compared with 2000.

7. Some corporate tax breaks destroy jobs.

Despite all the noise that America has the world’s second-highest corporate tax rate, the actual taxes paid by corporations are falling because of the growing number of loopholes and companies shifting profits to tax havens like the Cayman Islands. (Jeanne: And with it, many of our best jobs.)

And right now America’s corporations are sitting on close to $2 trillion in cash that is not being used to build factories, create jobs or anything else, but acts as an insurance policy for managers unwilling to take the risk of actually building the businesses they are paid so well to run. That cash hoard, by the way, works out to nearly $13,000 per taxpaying household. (Jeanne: So much for trickle-down and economic growth ... NOT!)

A corporate tax rate that is too low actually destroys jobs. That’s because a higher tax rate encourages businesses (who don’t want to pay taxes) to keep the profits in the business and reinvest, rather than pull them out as profits and have to pay high taxes.

The 2004 American Jobs Creation Act, which passed with bipartisan support, allowed more than 800 companies to bring profits that were untaxed but overseas back to the United States. Instead of paying the usual 35 percent tax, the companies paid just 5.25 percent.

The companies said bringing the money home -- “repatriating” it, they called it -- would mean lots of jobs. Senatecritter John Ensign, the Nevada Republican, put the figure at 660,000 new jobs.

Pfizer, the drug company, was the biggest beneficiary. It brought home $37 billion, saving $11 billion in taxes. Almost immediately it started firing people. Since the law took effect, Pfizer has let 40,000 workers go. In all, it appears that at least 100,000 jobs were destroyed.

Now Congressional Republicans and some Democrats are gearing up again to pass another tax holiday, promoting a new Jobs Creation Act. It would affect 10 times as much money as the 2004 law.

8. Republicans like taxes too.

President Reagan signed into law 11 tax increases, targeted at people down the income ladder. His administration and the Washington press corps called the increases “revenue enhancers.” Reagan raised Social Security taxes so high that by the end of 2008, the government had collected more than $2 trillion in surplus tax.

George W. Bush signed a tax increase, too, in 2006, despite his written ironclad pledge never to raise taxes on anyone. It raised taxes on teenagers by requiring kids up to age 17, who earned money, to pay taxes at their parents’ tax rate, which would almost always be higher than the rate they would otherwise pay. It was a story that ran buried inside The New York Times one Sunday, but nowhere else.

In fact, thanks to Republicans, one in three Americans will pay higher taxes this year than they did last year.

First, some history. In 2009, President Obama pushed his own tax cut -- for the working class. He persuaded Congress to enact the Making Work Pay Tax Credit. Over the two years 2009 and 2010, it saved single workers up to $800 and married heterosexual couples up to $1,600, even if only one spouse worked. The top 5 percent or so of taxpayers were denied this tax break.

The Obama administration called it “the biggest middle-class tax cut” ever. Yet last December the Republicans, poised to regain control of the House of Representatives, killed Obama’s Making Work Pay Credit while extending the Bush tax cuts for two more years -- a policy Obama agreed to.

By doing so, Congressional Republican leaders increased taxes on a third of Americans, virtually all of them the working poor, this year.

As a result, of the 155 million households in the tax system, 51 million will pay an average of $129 more this year. That is $6.6 billion in higher taxes for the working poor, the nonpartisan Tax Policy Center estimated.

In addition, the Republicans changed the rate of workers’ FICA contributions, which finances half of Social Security. The result:

If you are single and make less than $20,000, or married and less than $40,000, you lose under this plan. But the top 5 percent, people who make more than $106,800, will save $2,136 ($4,272 for two-career couples).

9. Other countries do it better.

We measure our economic progress, and our elected leaders debate tax policy, in terms of a crude measure known as gross domestic product. The way the official statistics are put together, each dollar spent buying solar energy equipment counts the same as each dollar spent investigating murders.

We do not give any measure of value to time spent rearing children or growing our own vegetables or to time off for leisure and community service.

And we do not measure the economic damage done by shocks, such as losing a job, which means not only loss of income and depletion of savings, but loss of health insurance, which a Harvard Medical School study found results in 45,000 unnecessary deaths each year.

Compare this to Germany, one of many countries with a smarter tax system and smarter spending policies.

Germans work less, make more per hour and get much better parental leave than Americans, many of whom get no fringe benefits such as health care, pensions or even a retirement savings plan. By many measures the vast majority live better in Germany than in America.

To achieve this, unmarried Germans on average pay 52 percent of their income in taxes. Americans average 30 percent, according to the Organization for Economic Cooperation and Development.

At first blush the German tax burden seems horrendous. But in Germany (as well as in Britain, France, Scandinavia, Canada, Australia and Japan), tax-supported institutions provide many of the things Americans pay for with after-tax dollars. Buying wholesale rather than retail saves money.

A proper comparison would take the 30 percent average tax on American workers and add their out-of-pocket spending on health care, college tuition and fees for services, and compare that with taxes that the average German pays. Add it all up and the combination of tax and personal spending is roughly equal in both countries, but with a large risk of catastrophic loss in America, and a tiny risk in Germany.

Americans take on $85 billion of debt each year for higher education, while college is financed by taxes in Germany and tuition is cheap to free in other modern countries. While soaring medical costs are a key reason that since 1980 bankruptcy in America has increased 15 times faster than population growth, no one in Germany or the rest of the modern world goes broke because of accident or illness. And child poverty in America is the highest among modern countries—almost twice the rate in Germany, which is close to the average of modern countries.

On the corporate tax side, the Germans encourage reinvestment at home and the outsourcing of low-value work, like auto assembly, and German rules tightly control accounting so that profits earned at home cannot be made to appear as profits earned in tax havens.

Adopting the German system is not the answer for America. But crafting a tax system that benefits the vast majority, reduces risks, provides universal health care and focuses on diplomacy rather than militarism abroad (and at home) would be a lot smarter than what we have now.

Here is a question to ask yourself: We started down this road with Reagan’s election in 1980 and upped the ante in this century with George W. Bush.

How long does it take to conclude that a policy has failed to fulfill its promises? And as you think of that, keep in mind George Washington. When he fell ill his doctors followed the common wisdom of the era. They cut him and bled him to remove bad blood. As Washington’s condition grew worse, they bled him more. And like the mantra of tax cuts for the rich, they kept applying the same treatment until they killed him.

Luckily we don’t bleed the sick anymore, but we are bleeding our government to death.

April 15, 2011: Granddaughter Hannah's Cartoon:

Creeeepy Paul Ryan.

April 14, 2011: Comparative Effectiveness Research Could Save Money, Support Providers, and Empower Patients

If you would like to see or review this blog item, please contact Jeanne at: jeanne,matthews@health-politics.com

April 14. 2011: Medicare isn't the Problem, it's the Solution (Well worth reading from former Secretary of Labor, Robert Reich... emphasis added, mine)

If you would like to see or review this blog item, please contact Jeanne at: jeanne,matthews@health-politics.com

April 14, 2011: HIGH PERFORMANCE HEALTH SYSTEMS: A New Report Outlines How PPACA's Accountable Care Organization Provisions Can Address Many of the Cost, Quality and Efficiency Problems in the U.S. Health System

If you would like to see or review this blog item, please contact Jeanne at: jeanne,matthews@health-politics.com

April 12, 2011: FACT CHECK: Your Source Before Forwarding the Next Viral E-Mail You Receive With Lies About Politics, Congress, President Obama, Republicans and/or Democrats

If you would like to see or review this blog item, please contact Jeanne at: jeanne,matthews@health-politics.com

April 12, 2011: TeaParty/GOPer Ryan Gets Roughly Two-Thirds of His Huge Budget Cuts From Programs for Lower-Income Americans

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April 11, 2011: Private Plans Under TeaParty/GOP Budget Plan Would Cost More Than Current Medicare

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April 10, 2011: Mostashari Named Health IT Czar

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April 8, 2011: 7 Examples of How the Poor Are Being Robbed to Give More Wealth to the Rich

If you would like to see or review this blog item, please contact Jeanne at: jeanne,matthews@health-politics.com

April 8, 2011: The TeaParty/GOP Road to Nowhere ... an Analysis of the Republican Budget Proposal's Impact on Medicare and Medicaid

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April 7, 2011: Sustainable Growth Rates are No Longer Sustainable

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March 13, 2011: PPACA: Year Two... Wonks Wield Weirding Wisdom to Wend Way to Waiting World of Woeful but Wildly-Wishful Health Wanna-bees.

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March 12, 2011: Proposed Rules Rolled Out on State Innovation Waivers in Health Care Overhaul

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March 11, 2011: Blocking Health Care Overhaul Funds Would Add $5.7 Billion to Deficit, CBO Says

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March 8, 2011: Cynics vs. Conservatives vs. Reality

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March 7, 2011: State Op-Out Creates “Problems” for Governors

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March 6, 2011: "Comparative Effectiveness" Another G-R-E-A-T GOP Idea Gone Bad

One of the best Republican ideas before it became a bad idea by being co-opted by Democrats was the idea of “comparative effectiveness.” As President George W. Bush said when discussing the issue way back in the pre-Tea Party era,

“In the future we will only pay for what works and, not for what doesn’t work.”

President George W. Bush, September 17, 2006

The idea of “comparative effectiveness” was a key component in the 2003 Medicare Modernization Act,” that gave us a privatized version of Medicare, known as Medicare Advantage, or Medicare Part C. The 2003 MMA was passed by a GOP-controlled Congress, in the middle of the night, after holding the House floor vote open for a record 12 hours (while GOP leadership rounded up recalcitrant GOP votes), by one vote, without a single Democratic voting for it, using a little known Congressional device known as reconciliation.

Buried in the law were plans for several demonstration projects designed to test Medicare reimbursements based on quality and effectiveness and a requirement that the National Institute of Medicine conduct a study into the “comparative effectiveness” of various health care services. The result (as these things always take a few years to complete), was study report issued by the IOM in June of 2009, five months after Barack Obama became president.

So it was when the final version of the Patient Protection and Affordable Care Act was signed into law on March 23, 2010, the idea of “comparative effectiveness” was included … a good, even GREAT Republican idea, gone bad.

A new federal panel, the Patient-Centered Outcomes Research Institute (PCORI) was created last fall under authority given the Secretary of Health and Human Services by PPACA (PL 111-148, PL 111-152) to provide a stable source of funding for studies that compare the effectiveness of various treatments and ways of delivering care for the same condition. During the health care debate, the topic of “comparative effectiveness” research had been turned on its ear by TeaParty/GOPers who saw in it the opportunity to describe the new law as “Obamacare” with the “rationing” of health care by denying coverage in some instances when the provision of such services might be considered as ineffective or less effective.

At the first meeting of PCORI, this week, members of different committees on the board will propose work plans to the rest of the panel members. The program development committee, which is the group that will guide the research agenda of the institute after gathering public input, will present its initial plans for the next six to 12 months. The program development committee will probably recommend that PCORI make some initial grants to groups that can help the institute decide such issues as how to best disseminate research findings and increase the likelihood that clinicians will use the studies as they are weighing different treatment options for patients. The idea is that even before the institute starts handing out funding for research on specific treatments or delivery of care models, officials should commission some work that could inform the process of setting a research agenda and helping the public understand how to use findings.

The institute is still in the early stages of its work. The board of governors has met twice since October and has established a committee to guide research methodology. The board hopes to hire a director by the end of April.

March 5, 2011: Patient Protection and Affordable Care Act Sets Nation on Right Course for Health Reform, Experts Say

If you would like to see or review this blog item, please contact Jeanne at: jeanne,matthews@health-politics.com

March 4, 2011: TeaParty/GOP Favorite, Paul Ryan (T.-Wisc.) Pushes Privatized "Vouchers" to Replace Medicare ("Keep Yur Guvamint Pawz Off-en Mah Medcare")

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March 4, 2011: Arizona Secedes from the Union!

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March 4, 2011: Why Not Bipartisanship and Cooperation in Congress to Solve the Nation's Problems?

John McCain was asked in a press interview (Arizona Republic, February 18, 2010, page B1), “Why can’t you people work together? McCain’s answer: “Because if we did, you wouldn’t re-elect us!”

If you reach across the aisle, you’re raising your hands in surrender. Compromise is weakness. Discourse is gullibility. And the other guy isn’t just wrong, he is evil. More TeaParty/GOP "Animal Farm" politic-speech!

March 3, 2011: America the Not So Beautiful!

http://www.youtube.com/watch?v=NutFkykjmbM&feature=player_embedded#at=154

March 3, 2011: BREAKING NEWS: Bipartisan Senate Duo Wants Medicare To Make Payments To Doctors Public

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March 3, 2011: Whew, We're Saved! For Two Weeks, at Least ... But New WSJ Poll Says Americans Do NOT Support Cuts to Medicare and Social Security

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March 2, 2011: What Would Jesus Cut?

Nothing in recent days yanked my chain (and there are a lot of things that tug away) more than TeaParty/GOP Majority Leader, John "the Orangeman" Boehner's remark that the TeaParty/GOP had a "moral obligation" to cut spending (but not, of course, to raise taxes on the richest of the rich who have benefited the most from the Congress they have bought and paid for). If you haven't checked the Sojourners web site, please do: http://www.sojo.net/

March 2, 2011: TeaParty/GOP Inflexibility as the Animal Farm Version of Politi-Speech: War is Peace, Inflexibility is Flexibility.

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March 2, 2011: Job-Killing: Republicans' Blank-Blanking Pejorative Du Jour

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March 1, 2011: "Physician Compare" A Lesson in How NOT to Do It!

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February 28, 2011: Medical Loss Ratio: Will Private Insurers Really Dry Up and Go Away if they Have to Pay-Out 85% of their Premiums in REAL, Actual Health Care Benefits?

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February 22, 2011: Getting Behind the Obama Budget... Fixing the "Doc-Fix" ... and Dealing With Other Health Cuts

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February 22, 2011: TeaParty/GOP Goal: Changing Medicare from a Defined Benefit to a Defined Contribution Program, and Killing it in the Process

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February 21, 2011: It's Time to Take Our Medicine, Even if It May Be a Big Pill to Swallow

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February 21, 2011: Job-Busting Law??? Well, Yes, Repealing PPACA Will be Job-Busting... in Many Areas, and Especially in Community Health

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February 19, 2011: Professionally Practicing Physicians Per 1,000 Population, an OECD Conundrum

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February 18, 2011: You Gotta Love this Economy:

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February 18, 2011: They're Kidding Right??? New TeaParty/GOP Senator Says Child-Labor Laws are Unconstitutional

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February 18, 2011: Toward a Shared Vision of Payment Reform: A Commonwealth Fund White Paper

http://www.commonwealthfund.org/~/media/Files/Publications/Other/2011/Shared_vision_payment_reform.pdf

February 18, 2011: House Proposal to Defund Health Reform Would Block Market Reforms, Cost-Containment Measures, and Coverage Improvements

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February 17, 2011: FreedomWorks: "Don't Fix PPACA, It Might Actually Help the American People ... They'll Like it More ... and We'll Lose the Next Election"

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February 17, 2011: PPACA Defunding: A Split Personality is Developing

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February 16, 2011: This is High Season for Budget Blueprints on Capitol Hill.

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February 15, 2011: Kaiser Family Foundation "Pop Quiz" -- Testing American Understanding of PPACA... er, "Obamacare"

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February 15, 2011: Katie Bar the Door, All Heck Breaking Loose Over Obama's Proposed "Doc-Fix" (see below)

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February 14, 2011: The "Doc-Fix" ... Blaming the SGR Crisis on PPACA; and Holding PPACA Hostage

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February 13, 2011: Where Does the United States REALLY Rank Among Nations When it Comes to Health Care?

[Moved to Resources Page]

February 12, 2011: PPACA Does Raise Some Taxes; And Gives Some Tax Breaks, Too. Here's the List:

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February 11, 2011: Some Medicare Part D Drug Plan "Doughnut Hole" FAQs

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February 11, 2011: Budget Cuts, Budget Cuts ... Oh What to Cut ... What to Cut: TeaParty vs. GOP vs. America

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February 10, 2011: Random Thought: Home for the "Super Rich" Now Symbol for New York (and America)

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February 9, 2010: Congress Passes Socialized Medicine and Mandates Health Insurance ... in 1798

The following is an article which appeared on the web site of the ultraconservative Forbes magazine. It's interesting not only for its historical perspective, but that Forbes is the magazine that published it. I have reproduced it in full along with some of my parenthetical comments. Enjoy:

The ink was barely dry on the PPACA when the first of many lawsuits to block the mandated health insurance provisions of the law was filed in a Florida District Court.If you would like to see or review this blog item, please contact Jeanne at: jeanne,matthews@health-politics.com

The pleadings, in part, read -

The Constitution nowhere authorizes the United States to mandate, either directly or under threat of penalty, that all citizens and legal residents have qualifying health care coverage.

State of Florida, et al. vs. DHHS

It turns out, the Founding Fathers would beg to disagree.

Just Between You and Me: And as it turns out so do most constitutional law experts, not the least of which is Charles Fried, Beneficial Professor of Constitutional Law at Harvard University, and Ronald Reagan's former Solicitor General of the United States, testifying last week before the U.S. Senate's Judiciary Committee. (See: Fried Testimony) Fried opened his testimony by burnishing his conservative bona fides: "I come here not as a partisan for this act. I think there are lots of problems with it. I'm not sure it's good policy, I'm not sure it's going to make the country any better." Detect a theme here?" Fried went on, "But, I am quite sure that the health care mandate is constitutional." Later on, Fried scoffed at Judge Roger Vinson's mash note to the Tea Party in his recent decision striking down the bill. "Judge Vinson also said that those who threw the Tea into Boston harbor would be horrified at this," Fried said. "Let me remind you that the citizens of the early United States were well-acquainted with many taxes. Remember the Whiskey Rebellion. The reason they threw that tea in the harbor was taxation without representation. A parliament which they hadn't elected did this to him. Well the people elected a Congress in 2010 and changed the Congress, and that is why we are not subjects, why we are citizens."

In July of 1798, Congress passed – and President John Adams signed - “An Act for the Relief of Sick and Disabled Seamen.” The law authorized the creation of a government operated marine hospital service and mandated that privately employed sailors be required to purchase health care insurance.

Just Between You and Me: As it has for America's seniors through the Medicare Act of 1965... government-run and government-financed health care have a long history of success in this country... from the merchant marine act above, to the State Children's Health Insurance Plan Act of 1997, and everything in between, i.e., the Public Health Service Act also of 1798, the Indian Health Service, TRICARE (formerly known as the Civilian Health and Medical Program of the Uniformed Services, CHAMPUS), and the Federal Employees Health Benefit program (FEHBP). PPACA opponents love to make comparisons between private health insurance and government-run programs, citing the pending bankruptcy of Medicare for example and the escalating costs of other programs as examples of government mismanagement and alleged incapability to deliver care. Such comparisons fail to take into account the almost exponentially-exploding costs of private health care insurance with double-digit rate increase year-after-year. Private insurers can and have raised their rates virtually at will, creating in many respects the problems we have in health care financing today. Insurance costs have risen so high that many employers have escalated their "outsourcing" of U.S. jobs to friendlier countries where health care is either virtually non-existent (and thus not their problem, i.e., 3rd-world countries) or to countries with developed systems of health care where the delivery of care to ALL citizens is considered a "social cost" to be borne by all fairly and not just by the employer and individuals. Private insurers raise their rates and lower their pay-outs to maximize profits. Today, only about 70% of every premium dollar gets paid out in benefits while the rest is eaten up in overhead and profits. Medicare, on the other hand, has had its hands tied. It faces the same rising costs as do private insurers but it still pays out around 94% of every dollar collected in actual benefits. Nonetheless, it has been unable to raise its supporting "premiums" (read: taxes) as Congress controls the premiums and thus we have seen a steady erosion of the Medicare Part A trust funds with no ability to restore a balance.

Keep in mind that the 5th Congress did not really need to struggle over the intentions of the drafters of the Constitutions in creating this Act as many of its members were the drafters of the Constitution. And when the Bill came to the desk of President John Adams for signature, I think it’s safe to assume that the man in that chair had a pretty good grasp on what the framers had in mind.

Here’s how it happened. During the early years of our union, the nation’s leaders realized that foreign trade would be essential to the young country’s ability to create a viable economy. To make it work, they relied on the nation’s private merchant ships – and the sailors that made them go – to be the instruments of this trade. The problem was that a merchant mariner’s job was a difficult and dangerous undertaking in those days. Sailors were constantly hurting themselves, picking up weird tropical diseases, etc.

The troublesome reductions in manpower caused by back strains, twisted ankles and strange diseases often left a ship’s captain without enough sailors to get underway – a problem both bad for business and a strain on the nation’s economy.

Just Between You and Me: And today, rising health care costs are weakening the nation's ability to economically compete against foreign competitors; it is costing the U.S. jobs and dollars (see outsourcing, or as TeaParty/GOPers prefer to label it ... as it doesn't sound as bad ... "off-shoring" ... of U.S. jobs).

But those were the days when members of Congress still used their collective heads to solve problems – not create them.

Realizing that a healthy maritime workforce was essential to the ability of our private merchant ships to engage in foreign trade, Congress and the President resolved to do something about it.

Just Between You and Me: Today we are faced with a "party of no" on one side that would oppose any solution, even if originally their own, agreed to by President Obama because, well because he is an "illegitimately-elected president" and "not one of us" (i.e., a black man). Take for example the short list of ideas Obama incorporated into PPACA that were "good ideas" by Republicans before they became "evil" when endorsed by Obama:

Enter “An Act for The Relief of Sick and Disabled Seamen”.

I encourage you to read the law as, in those days, legislation was short, to the point and fairly easy to understand.

The law did a number of fascinating things.

First, it created the Marine Hospital Service, a series of hospitals built and operated by the federal government to treat injured and ailing privately employed sailors. This government provided healthcare service was to be paid for by a mandatory tax on the maritime sailors (a little more than 1% of a sailor’s wages), the same to be withheld from a sailor’s pay and turned over to the government by the ship’s owner. The payment of this tax for health care was not optional. If a sailor wanted to work, he had to pay up.

This is pretty much how it works today in the European nations that conduct socialized medical programs for its citizens – although 1% of wages doesn’t quite cut it any longer.

The law was not only the first time the United States created a socialized medical program (The Marine Hospital Service) but was also the first to mandate that privately employed citizens be legally required to make payments to pay for health care services. Upon passage of the law, ships were no longer permitted to sail in and out of our ports if the health care tax had not been collected by the ship owners and paid over to the government – thus the creation of the first payroll tax in our nation’s history.

When a sick or injured sailor needed medical assistance, the government would confirm that his payments had been collected and turned over by his employer and would then give the sailor a voucher entitling him to admission to the hospital where he would be treated for whatever ailed him.

While a few of the healthcare facilities accepting the government voucher were privately operated, the majority of the treatment was given out at the federal maritime hospitals that were built and operated by the government in the nation’s largest ports.

As the nation grew and expanded, the system was also expanded to cover sailors working the private vessels sailing the Mississippi and Ohio rivers.

The program eventually became the Public Health Service, a government operated health service that exists to this day under the supervision of the Surgeon General.

So much for the claim that “The Constitution nowhere authorizes the United States to mandate, either directly or under threat of penalty….”

Just Between You and Me: Judge Vinson in the Florida court was wrong. A better federal court decision, by far, upholding the constitutionality of PPACA’s individual mandate, came from another federal court, this one in Michigan, that upheld the individual mandate, saying: "Congress had a rational basis to conclude that economic decisions not to purchase insurance to pay for [healthcare] services, taken in the aggregate, substantially affect interstate commerce by, among other things, shifting costs to third parties."

As for Congress’ understanding of the limits of the Constitution at the time the Act was passed, it is worth noting that Thomas Jefferson was the President of the Senate during the 5^th Congress while Jonathan Dayton, the youngest man to sign the United States Constitution, was the Speaker of the House.

While I’m sure a number of readers are scratching their heads in the effort to find the distinction between the circumstances of 1798 and today, I think you’ll find it difficult.

Yes, the law at that time required only merchant sailors to purchase health care coverage. Thus, one could argue that nobody was forcing anyone to become a merchant sailor and, therefore, they were not required to purchase health care coverage unless they chose to pursue a career at sea.

However, this is no different than what we are looking at today.

Each of us has the option to turn down employment that would require us to purchase private health insurance under the health care reform law.

Would that be practical? Of course not – just as it would have been impractical for a man seeking employment as a merchant sailor in 1798 to turn down a job on a ship because he would be required by law to purchase health care coverage.

What’s more, a constitutional challenge to the legality of mandated health care cannot exist based on the number of people who are required to purchase the coverage – it must necessarily be based on whether any American can be so required.

Clearly, the nation’s founders serving in the 5th Congress, and there were many of them, believed that mandated health insurance coverage was permitted within the limits established by our Constitution.

The moral to the story is that the political right-wing has to stop pretending they have the blessings of the Founding Fathers as their excuse to oppose whatever this president has to offer.

History makes it abundantly clear that they do not.

Just Between You and Me: On thing that has become abundantly clear is that the Tea-Baggers, er... Tea-Partiers ... have absolutely no understanding of American history.

February 8, 2011: The Medical Industrial Complex is Pumping Tens of Thousands to Support TeaParty/GOP

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February 7, 2011: Alternatives to the Individual Mandate? Be Careful What You Ask For!

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February 7, 2011: ACCOUNTABLE CARE ORGANIZATIONS: New Rules Soon... Very Soon

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February 5, 2011: Will PPACA Cost More Than Predicted? Maybe, But Whatever it Costs, It Will Be Less than Doing Nothing

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February 2, 2011: Hey Stupid Tea-Partiers, American Tax Rates are the LOWEST They've Been Since 1950! (Of course, we are now paying the price of low tax rates, with state bankruptcies and debt crisis. It may be time to consider raising taxes and restoring services while still paying down the debt).

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January 31, 2011: Is PPACA to Blame for Recent Health Insurance Premium Increases? ... or a Better Question: Will PPACA Actually Help to Hold Down Steadily Rising Health Insurance Premiums?

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January 29, 2011: Lies and the Big Fat Liars that Tell Them

Moved to Topics Page: http://www.health-politics.com/breaking.html#lies2

January 26, 2011: Does the U.S. have too few physicians, or too few primary care practitioners?

Moved to Topics Page: http://www.health-politics.com/breaking.html#toofew

January 25, 2011: Let Sleeping Gorillas Lie: Setting the Benefit Rules Under PPACA

Moved to Topics Page: http://www.health-politics.com/breaking.html#gorillas

January 24, 2011: The Nation's Uninsured (as seen by the Centers for Disease Control)

Moved to Topics Page; http://www.health-politics.com/breaking.html#uninsuredCDC

January 18, 2011: The Independent Payment Advisory Board Under Fire: Can Its Opponents Succeed in Killing It?

Moved to Topics page: http://www.health-politics.com/breaking.html#killIPAB

January 12, 2011: Way too many seniors really don't understand the concept:

January 12, 2011: Means-Testing Medicare: The rich have been getting richer. Should they should pay more? Or get less?

[Moved to Topics page: www.health-politics.com/breaking.html#means

Undermining the middle class

Rigging the system even more heavily in favor of the richest 1 percent

Ending the Medicare guarantee and raising health care costs for seniors

Undercutting the economic recovery

Deviating dramatically from a balanced approach to deficit reduction

Reneging on last year’s bipartisan budget agreement

Conclusion

Mitt "Cayman islands" Romney and all his SuperPac billionaire contributors should have paid the 35% high rate on ALL of their income above the $300,000 tax code threshold, regardless of whether it was "earned" from cashing in capital gains or digging a ditch.

Why Does Mitt Romney Want to Keep His Tax Returns From the Bain Years Under Wraps?

By Dave Johnson, AlterNet Posted on January 24, 2012, Printed on January 26, 2012 http://www.alternet.org/story/153881/why_does_mitt_romney_want_to_keep_his_tax_returns_from_the_bain_years_under_wraps

International Profiles of Health Care Systems: Australia, Canada, Denmark, England, France, Germany, Italy, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United States

References

Key Findings

Addressing the Problem

Analysis

Sources

Conservative Arguments that Higher Income Taxes for the Wealthy Hurt Employment Don’t Hold Up to Scrutiny

The Patient Protection and Affordable Care Act Extends the Life of Medicare While the House Republican Budget Ends It

The House budget shifts costs to low-income seniors while giving huge tax cuts to the wealthy

The Patient Protection and Affordable Care Act also makes wealthier seniors pay slightly more

Vouchercare Is Not Medicare

The following is excerpted from a blog posting by John Arensmeyer, founder and CEO of the “Small Business Majority” a national nonpartisan organization founded and run by small business owners, that brings the voices of America’s 28 million small businesses to the public policy table.

Oft-Cited 51 Percent Figure Is Temporary Spike Caused by Recession

Lower-Income People Pay Considerable Payroll, State, and Local Taxes

Policy Options to Force People with Low Incomes to Pay Federal Income Tax Are Unsound

Corporations and Small Business Owners Also Pay No Income Tax During Bad Years

Cutting the EITC Would Discourage Work and Increase Poverty

Health Insurers Making Record Profits as Many Postpone Care

Citation

If you would like to see or review this blog item, please contact Jeanne at: jeanne,matthews@health-politics.com

By Dave Johnson, AlterNet
Posted on January 24, 2012, Printed on January 26, 2012
http://www.alternet.org/story/153881/why_does_mitt_romney_want_to_keep_his_tax_returns_from_the_bain_years_under_wraps