Obamacare Will Increase Health Spending By $7,450 For A Typical Family of Four

It was one of candidate Obama’s most vivid and concrete campaign promises. Forget about high minded (some might say high sounding) but gauzy promises of hope and change. This candidate solemnly pledged on June 5, 2008: “In an Obama administration, we’ll lower premiums by up to $2,500 for a typical family per year….. We’ll do it by the end of my first term as President of the United States.”  Unfortunately, the experts working for Medicare’s actuary have (yet again[1]) reported that in its first 10 years, Obamacare will boost health spending by “roughly $621 billion” above the amounts Americans would have spent without this misguided law.

What this means for a typical family of four

$621 billion is a pretty eye-glazing number. Most readers will find it easier to think about how this number translates to a typical American family—the very family candidate Obama promised would see $2,500 in annual savings as far as the eye could see. So I have taken the latest year-by-year projections, divided by the projected population and multiplied the result by 4.

Simplistic? Maybe, but so too was the President’s campaign promise. And this approach allows us to see just how badly that promise fell short of the mark. Between 2014 and 2022, the increase in national health spending (which the Medicare actuaries specifically attribute to the law) amounts to $7,450 per family of 4. Read more >>

Citing costs, IBM to move 110,000 retirees off health plan

International Business Machines Corp. plans to move about 110,000 retirees off its company-sponsored health plan and instead give them a payment to buy coverage on a health-insurance exchange, in a sign that even big, well-capitalized employers aren't likely to keep providing the once-common benefits as medical costs continue to rise.

The move, which will affect all IBM retirees once they become eligible for Medicare, will relieve the technology company of the responsibility of managing retirement health-care benefits. IBM said the growing cost of care makes its current plan unsustainable without big premium increases.

IBM's shift is an indication that health-insurance marketplaces, similar to the public exchanges proposed under President Barack Obama's health-care overhaul, will play a bigger role as companies move coverage down the path taken by many pensions, paying employees and retirees a fixed sum to manage their own care. Read more >>

Obamacare causes spike in health insurance scams

Law enforcement agencies are reporting a spike in health insurance scams across the country, many of which are preying on the public's confusion over the massive changes taking place in the nation's health care system.

One recent morning, 86-year-old Evelyne Lois Such was sitting at her kitchen table in Denver when the phone rang.  She didn’t recognize the phone number or the deep voice on the other end of the line. “He asked if I was a senior, and I said yes, and he said we are sending out all new Medicare cards and I want to make sure I have all of your statistics correct,” Such recounts.

At first, the caller didn’t seem too fishy; he started by running through her address and phone number, just to make sure they were right. But then he read off a series of numbers and asked if it was her bank routing number. “I didn’t know really at the time whether it was or not, but I just said no. He said, well could you give it to me so I’ll have it correctly, and I said, well I’m not so sure about that. And he started to say something and I hung up.” Read more >>

Social Security: Many pay more than they'll get back

Up until now, Social Security has been a windfall for many retirees: They collected far more in benefits than they shelled out in taxes. That's changing. Many of those retiring will have paid more into the coveted entitlement program than they will get back.

Here are the numbers:

A couple who each earned the average wage during their careers and retired in 1990 would have paid $316,000 in Social Security taxes, but collected $436,000 in benefits, according to data crunched by Eugene Steuerle, an economist at the Urban Institute.

Had that couple turned 65 in 2010, however, they would have paid $600,000 in taxes, but could expect to collect just $579,000. This is the first time in the program's history that taxes outweighed benefits for this group, a couple with average earnings.

The imbalance will get more pronounced for future generations of retirees. Couples now in their early 40s will have forked over $808,000 in Social Security taxes by the time they retire, but get back only $703,000 in benefits. Read more >>

Workers raiding retirement saving accounts to survive

A large and growing share of American workers are tapping their retirement savings accounts for non-retirement needs, raising broad questions about the effectiveness of one of the most important savings vehicles for old age.

More than one in four American workers with 401(k) and other retirement savings accounts use them to pay current expenses, new data show. The withdrawals, cash-outs and loans drain nearly a quarter of the $293 billion that workers and employers deposit into the accounts each year, undermining already shaky retirement security for millions of Americans.

With federal policymakers eyeing cuts to Social Security benefits and Medicare to rein in soaring federal deficits, and traditional pensions in a long decline, retirement savings experts say the drain from the accounts has dire implications for future retirees.

“We’re going from bad to worse,” said Diane Oakley, executive director of the National Institute on Retirement Security. “Already, fewer private-sector workers have access to stable pension plans. And the savings in individual retirement savings accounts like 401(k) plans — which already are severely underfunded — continue to leak out at a high rate.” Read more >>

Fiscal cliff negotiations reviving debate about screwing Retirees out of Social Security

Yes, we can fix Social Security (but it won't be pretty)
The fiscal cliff negotiations are reviving the debate about that other financial elephant in the room: Social Security. Under current government estimates, Social Security could face funding shortfalls in about two decades if nothing changes. That’s because the U.S. population is aging -- and generally living longer.

That sounds like a disheartening scenario for workers who are currently paying into Social Security and worry that they won’t get as much out of it once they retire.  About half of the Americans polled by Pew Research Center earlier this year believe it’s not likely there will be enough money in Social Security and Medicare to maintain current benefit levels into the future.

But experts say there are ways to fix Social Security. Politicians just may not like trying to sell those changes to the American people.

It has happened before, though. In the mid-1980s, none other than President Ronald Reagan, working with Democrats in Congress, oversaw a major overhaul of the nation’s retirement safety net.

That’s something many say seems less likely these days.

“There are politicians – and especially in the Senate but also in the House as well – who could work together and come to an agreement,” said Alan Auerbach, a professor of law and economics at the University of California, Berkeley. “But they’re not the majority of Congress.” Read more >>

How liberals will eventually throw Social Security and Medicare under the bus

Excerpted from Glenn Greenwald:

STEP ONE: Liberals will declare that cutting Social Security and Medicare benefits - including raising the eligibility age or introducing "means-testing" - are absolutely unacceptable, that they will never support any bill that does so no matter what other provisions it contains, that they will wage war on Democrats if they try.

STEP TWO: As the deal gets negotiated and takes shape, progressive pundits in Washington, with Obama officials persuasively whispering in their ear, will begin to argue that the proposed cuts are really not that bad, that they are modest and acceptable, that they are even necessary to save the programs from greater cuts or even dismantlement.

STEP THREE: Many progressives - ones who are not persuaded that these cuts are less than draconian or defensible on the merits - will nonetheless begin to view them with resignation and acquiescence on pragmatic grounds. Obama has no real choice, they will insist, because he must reach a deal with the crazy, evil GOP to save the economy from crippling harm, and the only way he can do so is by agreeing to entitlement cuts. It is a pragmatic necessity, they will insist, and anyone who refuses to support it is being a purist, unreasonably blind to political realities, recklessly willing to blow up Obama's second term before it even begins.

STEP FOUR: The few liberal holdouts, who continue to vehemently oppose any bill that cuts Social Security and Medicare, will be isolated and marginalized, excluded from the key meetings where these matters are being negotiated, confined to a few MSNBC appearances where they explain their inconsequential opposition.

STEP FIVE: Once a deal is announced, and everyone from Obama to Harry Reid and the DNC are behind it, any progressives still vocally angry about it and insisting on its defeat will be castigated as ideologues and purists, compared to the Tea Party for their refusal to compromise, and scorned (by compliant progressives) as fringe Far Left malcontents.

STEP SIX: Once the deal is enacted with bipartisan support and Obama signs it in a ceremony, standing in front of his new Treasury Secretary, the supreme corporatist Erskine Bowles, where he touts the virtues of bipartisanship and making "tough choices", any progressives still complaining will be told that it is time to move on. Any who do not will be constantly reminded that there is an Extremely Important Election coming - the 2014 midterm - where it will be Absolutely Vital that Democrats hold onto the Senate and that they take over the House. Any progressive, still infuriated by cuts to Social Security and Medicare, who still refuses to get meekly in line behind the Party will be told that they are jeopardizing the Party's chances for winning that Vital Election and - as a result of their opposition - are helping Mitch McConnell take over control of the Senate and John Boehner retain control of the House.

With last night's results, one can choose to see things two ways:

(1) emboldened by their success and the obvious movement of the electorate in their direction, liberals will resolve that this time things will be different, that their willingness to be Good Partisan Soldiers depends upon their core values not being ignored and stomped on, or

(2) inebriated with love and gratitude for Obama for having vanquished the evil Republican villains, they will follow their beloved superhero wherever he goes with even more loyalty than before. One does not need to be Nate Silver to be able to use the available historical data to see which of those two courses is the far more likely one. Read more >>

More Than Half Of All Americans Are At Least Partially Dependent On The Government

A very large segment of the population has figured out that it can use voting as a tool to get more money and benefits from the government, and that is a very dangerous thing.  Once upon a time, the free market was the one that distributed nearly all the wealth in our system.

But now the federal government has become a giant deluded "Santa Claus" that distributes goodies to the American people far beyond its actual capacity to do so.  In fact, we are borrowing trillions of dollars that we do not have so that our politicians can continue to buy votes with handouts.  Look, we will always need a safety net.  We don't want anyone in America starving to death or sleeping in the street.

However, our current system has gotten completely and totally out of control.  Today, there are nearly 80 different "means-tested welfare programs" operated by the federal government.  As I have written about previously, more than 100 million Americans are enrolled in those programs.  Sadly, that does not even count Social Security and Medicare.  Tens of millions of Americans are enrolled in each of those programs as well.  Read more >>

Over 100 Million Now Receiving Federal Welfare

A new chart set to be released later today by the Republican side of the Senate Budget Committee details a startling statistic: "Over 100 Million People in U.S. Now Receiving Some Form Of Federal Welfare."

"The federal government administers nearly 80 different overlapping federal means-tested welfare programs," the Senate Budget Committee notes. However, the committee states, the figures used in the chart do not include those who are only benefiting from Social Security and/or Medicare. 

Food stamps and Medicaid make up a large--and growing--chunk of the more than 100 million recipients. " Read more >>

The Real-World Middle Class Tax Rate: 75%

Charles Hugh Smith from Of Two Minds

The Real-World Middle Class Tax Rate: 75%
If we include all taxes, the real-world tax rate is much higher than the "official" income tax rate.

For those Americans earning between $34,500 and $106,000, the real-world middle class tax burden in high-tax locales is 15% + 25% + 5% + 15% + 15% = 75%. Yes, 75%.

Before you start listing the innumerable caveats and quibbles raised by any discussion of taxes, please hear me out first. Let's start by defining "taxes" as any fee that is mandated by law or legal necessity. In other words, taxes are what is not optional.

List of Obama's New Health Care Taxes

The health reform law changes the Medicare tax in two ways: It adds a surtax on wage income above a certain level, and it creates a new Medicare tax on investment income. Some high-income households will only be subject to one of those changes, and some will be subject to both.

Starting next year, high-income individuals will pay another 0.9 percentage points on their earned income over $200,000 ($250,000 if married). That's on top of the 1.45% they currently pay on all of their wages.

For those with investment income, they also could be subject to a new 3.8% tax on at least a portion of their capital gains and dividends. (Here's a fuller explanation of how the Medicare tax increases will work.) 

New mandate to buy insurance: Starting in 2014, individuals must be insured or pay a penalty.

The amount of the penalty rises annually from 2014 to 2016 and is adjusted for inflation thereafter.

In 2014, the penalty will be no more than $285 per family or 1% of income, whichever is greater. In 2015, the cap rises to $975 or 2% of income. And by 2016, the penalty would be up to $2,085 per family or 2.5% of income, whichever is greater.

The dollar amounts for a single adult would be $95, $325 and then $625 during that same time period.

However, the penalty couldn't exceed the national average premium of the lowest cost policy on the new health insurance exchanges.

Read the rest of the article

Shell companies steal hundreds of millions from Medicare

Image via WikipediaBy the time authorities busted a fake AIDS clinic in Miami, it had bilked Medicare of more than $4.5 million. Still, the man behind the scheme remained far ahead of the agents pursuing him.

Michel De Jesus Huarte, a 40-year-old Cuban-American, hadn't simply avoided arrest. He had hatched a plan to steal millions more from Medicare by forming at least 29 other shell companies — paper-only firms with no real operations. Each time, he would keep his name out of any corporate records. Other people — some paid by Huarte, some whose identities had been stolen — would be listed in incorporation papers.

The shells functioned as a vital tool to hide the Medicare deceit — and not only for Huarte. Hundreds of others have used the veil of corporate secrecy to help steal hundreds of millions of dollars from one of the nation's largest social service programs, a Reuters investigation has found. More...

Seniors Join Occupy Chicago, Protest Cuts To Medicare, Social Security

Hundreds of senior citizens gathered in Chicago's Federal Plaza Monday morning to let Congress know how they feel about cutting Medicare, Medicaid and Social Security. The group ultimately blocked traffic at a downtown intersection -- leading to 47 arrests.

Members of the Jane Addams Senior Caucus were joined by other grassroots organizations, including Occupy Chicago, in a rally outside of Sen. Mark Kirk and Sen. Dick Durbin's office, followed by a march.

“We are fighting for our elders, for our children, and for our future," Occupy Chicago's Rachael Perrotta said in a statement. "Their welfare is our priority. We demand our elected leaders, like Durbin, Kirk and 'Mayor 1%' Emanuel, choose to serve the people, and protect the programs that ensure our futures.” More...

Bogus Healthcare Bill Abolishes The Right to Sovereignty Over Our Own Bodies

Ellen Brown
Compulsory Private Health Insurance: Just Another Bailout for the Financial Sector?

Dr. Benjamin Rush, a signer of the Declaration of Independence, is quoted as warning two centuries ago:

"Unless we put medical freedom into the Constitution, the time will come when medicine will organize into an underground dictatorship. . . . The Constitution of this republic should make special privilege for medical freedom as well as religious freedom."

That time seems to have come, but the dictatorship we are facing is not the sort that Dr. Rush was apparently envisioning. It is not a dictatorship by medical doctors, many of whom are as distressed by the proposed legislation as the squeezed middle class is. The new dictatorship is not by doctors but by Wall Street -- the FIRE (finance, insurance, and real estate) sector that now claims 40% of corporate profits.

Economist L. Randall Wray observes that ever since Congress threw out the Glass-Steagall Act separating commercial banking from investment banking, insurance and Wall Street finance have been "two peas in a pod." He writes:

"[T] here is a huge untapped market of some 50 million people who are not paying insurance premiums--and the number grows every year because employers drop coverage and people can't afford premiums. Solution? Health insurance "reform' that requires everyone to turn over their pay to Wall Street. . . . This is just another bailout of the financial system, because the tens of trillions of dollars already committed are not nearly enough."

The health reform bills now coming through Congress are not focused on how to make health care cheaper or more effective, how to eliminate waste and fraud, or how to cut out expensive middlemen. As originally envisioned, the public option would have pursued those goals. But the public option has been dropped from the Senate bill and radically watered down in the House bill. Rather than focusing on making health care affordable, the bills focus on how to force people either to buy health insurance if they don't have it, or to pay more for it if they do. If you don't have insurance and don't purchase it, you will be subject to a hefty fine. And if you do purchase it, premiums, co-pays, co-insurance payments and deductibles are liable to keep health care cripplingly expensive. Most of the people who don't have health care can't afford to pay the deductibles, so they will never use the plans they are forced to buy.

To subsidize those who can't pay, the Senate bill would make families earning two to four times the poverty level who don't have employer-sponsored insurance surrender 8% to 12% of their income to insurance payments, or pay a fine. In another effort to make the insurance payments "affordable," the Senate bill calls for the lowest cost plan to cover only sixty percent of health care costs. "In other words," wrote Dr. Andrew Coates in a November 23 article, "a guarantee of insurance industry dominance and the continued privatization of health care in every arena."

An excellent analysis was posted on December 22 by a national organization of 17,000 physicians called Physicians for a National Health Program. The authors observed:

"Some paint the Senate bill as a flawed first step to reform that will be improved over time, citing historical examples such as Social Security. But where Social Security established the nidus of a public institution that grew over time, the Senate bill proscribes any such new public institution. Instead, it channels vast new resources including funds diverted from Medicare into the very private insurers who caused today's health care crisis. Social Security's first step was not a mandate that payroll taxes which fund pensions be turned over to Goldman Sachs! . . .

"The bill would drain $43 billion from Medicare payments to safety-net hospitals, threatening the care of the 23 million who will remain uninsured even if the bill works as planned. . . . The bill would leave hundreds of millions of Americans with inadequate insurance an "actuarial value' as low as 60 percent of actual health costs. . . . The bill would inflate the already crushing burden of insurance-related paperwork that currently siphons $400 billion from care annually. . . . [T]he bill will cause U.S. health costs to increase even more rapidly than presently, and budget neutrality is to be achieved by draining funds from Medicare and an accounting trick front-loading the new revenues while delaying most new coverage until 2014."

The Right to Sovereignty Over Our Own Bodies

Compulsory health insurance is like compulsory selective military service (the draft), except that all of our numbers have come up. The argument has been made that auto insurance is compulsory, so why not health insurance? But the obvious response is that you can choose to drive a car. The only way to escape the vehicle we call a body is to give up the ghost.

And that brings up another issue alluded to by Dr. Rush: the matter of freedom of choice in health care, which some people would equate with freedom of religion. Not everyone believes in Modern Medicine. If we the people have a right to choose what we believe about life after death, we should have the right to choose what we believe about life before death, by choosing how to maintain our own bodies.

The conventional treatment promoted by the medical/pharmaceutical complex is an aggressive approach that can wind up killing the patient as collateral damage in its war on the disease. Among other researchers questioning the wisdom of this approach is Gary Null, who reported the results of an exhaustive independent review by the Nutrition Institute of America in 2004. The reviewers concluded that the number one killer is not heart disease or cancer but conventional medicine itself. Conventional medicine was found to be responsible for an estimated 783,936 deaths annually, including 106,000 deaths from adverse drug reactions, 98,000 from medical errors, and 88,000 from infection; and those figures were conservative, since no more than 20 percent of iatrogenic (doctor- or drug-caused) mishaps are ever reported.

There are more natural, less invasive alternatives, but most are not covered by insurance; and even such simple remedies as healthy organic food may be too expensive for people forced to use a major portion of their incomes for medical insurance. A true public option of the Medicare-for-all variety could have solved the problem by keeping health care affordable. If other industrialized countries can find the money for a national health service, we could too. For a model, we could follow the lead of Canada, which originally obtained the funds for its national health service from its own publicly-owned central bank. But that will be the subject of another article. Stay tuned.

More US Govt Idiocy - $500 for Every Newborn

Kimberly Palmer
Coming Soon: $500 for Every Newborn?
Imagine a world where every baby received a trust fund at birth. It might sound like a fairy tale, but being born into money--or at least into a $500 savings account--could soon become reality for all children born in the United States. Lawmakers are considering a bill that would give each newborn just that, with the goal of promoting savings that would later be used for education, a first home, or retirement. Here's what you should know about the ASPIRE ("America Saving for Personal Investment, Retirement, and Education") Act:

How would this program work?

The ASPIRE Act would give each child born in the United States a $500 savings account. Recipients could then use that money once they were older to pay for education, a first home, or retirement. Low-income children would receive additional funding, and all participants could add to their accounts over time.

Would it really help people save more money? Five hundred dollars isn't much.

The purpose of the accounts, says Reid Cramer, director of the Asset Building Program at the New America Foundation, is to get people invested in their future. "Having an asset has the potential to change the way people think and plan for their future, and sometimes those effects can be generated just from small asset holdings," he says, adding that it's possible for people to build up significant savings over time. The ASPIRE Act also pairs the creation of the accounts with financial literacy programs in schools.

Indeed, pioneering research by University of Michigan professor Michael Sherraden suggests starting individual savings accounts for lower-income people can lead them to feel more confident about the future. Recipients of such accounts also report feeling that they have greater control over their lives, including the ability to plan for education and retirement costs. Further studies have shown that owning assets is associated with greater empowerment and civic participation, increased income, and positive educational outcomes.

Why not just give the money to low-income people who really need it?

Entitlement programs that benefit everyone, such as Social Security and Medicare, tend to enjoy more widespread support and therefore last longer. Programs aimed exclusively at lower-income groups, such as welfare programs, often attract more controversy and receive less political support.

"The important thing is that everybody gets an account," says Cramer, and that it's opened automatically so families don't need to take much action. It would still be a progressive program, he adds, because as the ASPIRE Act is currently written, poorer families would receive additional funding.

Don't we already have a lot of policies in place that encourage savings?

Yes, but they tend to mainly help people with higher incomes. According to Sherraden, two thirds of retirement tax benefits go to households that earn incomes of $100,000 and higher. Policies that encourage homeownership, such as tax deductions on interest payments, similarly benefit those who can already afford to purchase homes. Other savings systems, such as 529 accounts for college savings, depend on parents opening the accounts and making deposits. The ASPIRE Act is different because each child would have an account and receive an initial deposit.

Has this been tried anywhere before?

Yes--in Great Britain. Since September 2002, children born in the United Kingdom have received a $500 savings account, just as the ASPIRE Act would provide in the United States. Recipients can withdraw the money after the age of 18; unlike in the proposed U.S. version, there are no restrictions on how they can spend the money. About one quarter of the recipients add extra money to the account, and, according to calculations by Cramer, most of the accounts go up in value so they are worth over $600. (The money is invested in a diversified portfolio of stocks, much like college savings, or 529, accounts in the United States.) Since the program's first enrollees are now only 7 years old, it's too early to say how they will spend the money once they turn 18.

Could this really become law in the United States sometime soon?

Lawmakers are expected to reintroduce the ASPIRE Act before the end of the year, and it already enjoys bipartisan support. The main challenge for supporters will most likely be over how to justify the cost at a time of great budget deficits and competing demands for federal dollars. Critics argue that the program would simply create another costly entitlement program. Writing for the Portland-based think tank Cascade Policy Institute, policy analyst Sreya Sarkar says the program would provide benefits to one generation by taxing another.

How would this program be paid for?

Over the first decade of its life, the program would cost around $37.5 billion, and would start at around $3.25 billion per year. Cramer argues that because the money would be invested through the savings account, it would help spur economic growth. Lawmakers sponsoring the bill have said they would pay for it by making other cuts, but the bill doesn't specify what those cuts would be.