Friday, August 19, 2011

Proposal floats to look at seniors' assets as part of means testing

A reader of the Washington Post, Robert Glenn in suburban Maryland, lays it on the line with how to balance the budget, partly in terms of entitlement cuts (which won’t do as much to balance as conservatives think).

For Social Security, he wants to raise the retirement age to 70 (how quickly?) and include assessment of net worth or accumulated or inherited wealth as well as annual income in means testing (even for current beneficiaries?)  This is the first time I’ve seen anyone mention looking at assets in a fashion similar to what is done with Medicaid.  But, remember, the FICA contributions were supposed to be related to your final level of benefits (in a tiered system, to be sure). So, did someone like me “earn” my benefits?  I thought so.  If it could really be yanked away by redistribution, I would want a totally privatized system (like the Tea Party).

This reminds me of the behavior of the radical Left , which regarded “upper middle class” individuals as part of the “enemy” and wanted to outlaw all inherited wealth, back in the early 1970s.

Glenn also suggests age cutoffs for certain procedures under Medicare at public expense, and mentions means testing. Why should someone be allowed to keep his own wealth and use public expenses for coronary bypass surgery when lifestyle matters could have prevented it?  Why not recognize that life is not infinite, and everyone has their “turn” and time limits?  It sounds like cold rationality.

As previous posts have suggested, Medicare benefits, especially Parts B and D, are covered much less by individual premiums and previous Medicare taxes than is Social Security.

The link is here. The letter appears in print on p A26 in the Washington Post Aug. 19.

Monday, August 15, 2011

Tom Coburn (R-OK) would means test Medicare Part B in premium collection, raise retirement age gradually

Walter Pincus has a column on p A15 of the Monday Aug. 15 Washington Post, in which he discusses a proposal to reform Medicare by Sen. Tom Coburn (R-OK). The link is here

Coburn, compared to Campbell Aug. 11, maintains that Medicare taxes and premiums may well cover the Part A inpatient, but not Part B, which he says is only 25% covered by contributions, or Part D, which he says is 83% taxpayer funded despite the notorious “doughnut hole”.  He wants to raise premiums markedly for Part B for individuals making over $150000 a year or couples making $300000. Why the sharp cutoff, I ask? Should accumulated or perhaps inherited (generational) wealth be included in the means testing?

He would also gradually raise the eligibility age up to 69 over many years. The average person should have about ten years of access, with increasing life spans.

Coburn is himself a physician. 

Thursday, August 11, 2011

Medicare hospice spending increases 70% in four years

The National Coalition on Health Care (NCHC) is reporting that Medicare spending on hospice care has risen 70% over four years (since mid 2007), as for-profit companies are a larger portion of the “market”. The link for the story is here

My own experience for Mother from late 2009 to her passing at the end of 2010 was with Capital Hospice in Arlington VA, which I believe is non-profit, though “private”.  From what I recall, the Hospice bills to Medicare tended to average close to $4000 a month for visits. 

Normally, to qualify for in-home hospice visits, someone must have a diagnosis where the expected life expectancy is six months or less, although it can be recertified every two months if the person lives longer. 

Wednesday, August 10, 2011

Cap lifetime Medicare benefits and then use a tradeable voucher system, conservative scholar says

Don Campbell has a column in USA Today Aug. 10, “Ration health care with Medicare credits”, link here

While Social Security benefits are “largely” covered by FICA tax “premiums” (including spouses’ and employers’), typical Medicare benefits run about three times what was paid in Medicare taxes, the article says.

Campbell suggests a personal lifetime limit of $150000, with a system of credits that can be bought or sold for extension.  Some higher income beneficiaries may have paid enough Medicare tax to cover their benefits, he admits.  He connects the idea of means testing to premiums that might have been paid.

He thinks that “deservedness” decisions will inevitably happen (effectively rationing) because the current way Medicare works is not sustainable.

But other “conservative” scholars recommend greatly extending deductibles, at least to recipients who can afford them.  

There is a possibility that these sorts of changes could occur even with current beneficiaries.

There is another question on life extension, as to whether “less is more” and whether enormously expensive treatments to extend life a few months (as for prostate cancer once metastasized) add any meaningful quality.  My own father died on New Year’s Day 1986 only four weeks after diagnosis of widespread prostate cancer in the lungs, liver and brain.

Sunday, August 07, 2011

It's dangerous to leave the future welfare of seniors in the hands of "The (Super) Committee"

I remember the idea of a “Committee” from the days of the military draft back in the 1960s, as student deferments were to be ended. The “Local Board”, whose members didn’t seem accountable to anyone, could decide whom to put on the front lines.

So we have a Super Committee now on the budget. It serves us old turkey right before Thanksgiving. Congress must take it or leave it.  The Committee can do what it wants.

There is some talk that the Committee will stick kick the toughest cans down the road, until after the 2012 election. That means it could be likely to keep its cuts on entitlements to those of future beneficiaries.  There’s not much question that retirement ages will have to rise, and benefits will have to increase more slowly, if at all.

But, as I’ve noted, there’s not much question that, if it really wanted to, it could demand some sacrifices of current beneficiaries, at least those with “means”. Maybe not much on Social Security because of legal challenges that could result on the Trust Fund issue, but certainly much higher deductibles on Medicare benefits, based on means, could be put in immediately.   And Congress will no longer have the ability to exclude any specific controversial provision from the final bill.  If you need coronary bypass surgery and have some cash, you could wind up parting with a lot more of it first.

It could mean that some seniors wonder about whether to “get everything done” this fall.  Or maybe accept the way it used to be, before lifespans started to increase rapidly while the number of adult children to support the extra years did not: everybody gets old, and there is a limit to how much we can do, at public or even private dole, for anyone. 

One other thing to keep in mind: despite all the talk about entitlements as the biggest drain on the debt, they probably aren’t. The biggest problem is probably contract overruns.

Wednesday, August 03, 2011

Would a "Committee" find the Ryan anti-Medicare plan appealing?

Reuters is analyzing the Tea Party “victory” in the recent skirmish in Congress, as an opportunity for “The Committee” to reform Medicare, and speculates about the Ryan Plan.

This plan would leave current retirees alone, but future retirees, at some age, would lose guaranteed Medicare coverage and have it replaced by a voucher system for purchasing private insurance. It’s pretty obvious that seniors could have issues with pre-existing conditions or “moral hazard” (and all the problems usually documented by Michael Moore), or could be means tested.

One can make the argument that seniors with means should not have the government pay their medical bills so they can pass on money to their kids. But the money saved this way would proportionately not be that large in trimming budget deficits.

In theory, similar arguments could be made about current beneficiaries. The practical resistance would come from the large percentage of seniors who vote in elections. But to an "Committee", it could sound more appealing. 

The Reuters story is here.

Tuesday, August 02, 2011

Are married people (with adult kids) better prepared for retirement than singletons?

Robert Rowell has a Market Watch story on Yahoo!, “The Retirement-Savings Crisis Is Overblow”, link here.

There is a curious statistic reported, that, according to a Rand study, 55% of single persons are prepared adequate prepared for retirement, but 80% of married people are. That may be because two can live more efficiently than one, and having kids (at least in marriage) ultimately works both ways financially. 89% of college-educated people were prepared.

Of course, recent Census reports show that minorities are falling behind, partly because of negative equity in homes, and because Hispanics particularly tend to live in areas where real estate was hit the hardest.

In this story, follow the CNN link, “why I took social security early”.