By
iWatch News
If Americans who are embracing Rep. Paul Ryan's "Path to Prosperity" -- and that now includes Mitt Romney -- spent a few minutes reviewing a few recent research reports, they just might conclude that the Wisconsin Republican's plan to reduce the deficit might better be renamed the "Path to the Poorhouse" because of what it would mean to the Medicare program and many senior citizens.
Ryan's proposal, which will get new scrutiny now that Romney has made him his running mate, would end the current Medicare program for everyone born after 1956. It would replace Medicare with a system in which beneficiaries would receive a set amount of money from the government every year to buy coverage from private insurers. That money would go straight into insurance companies' bank accounts, which would make them far richer and even more in control of our health care system than they already are.
While the amount of money beneficiaries would receive would depend on their health status, the average 65-year-old would get $8,000 under the Ryan plan in 2022, the year it would take effect. That's the amount the current Medicare program is expected to spend on the average 65-year-old that year. After 2022, the annual increase in the "premium support" payments would be based on the consumer price index (CPI). And therein lies one of the biggest problems for anyone hoping to live long enough to enroll in Medicare and stay alive for a few years.
Last month the government reported that the consumer price index had increased 1.7 percent between June 2011 and June 2012, meaning we've been paying on average 1.7 percent more this year than last year for goods and services. The cost of medical care, however, shot up 4.3 percent -- more than two and a half times the CPI. And that was not an aberration. The cost of medical care has been rising faster than the cost of just about everything else in this country for years. That's one of the reasons why private health insurance premiums have been increasing so rapidly. That and the fact that insurance corporations have to report a big enough profit every quarter to satisfy their shareholders and Wall Street analysts.
Health insurance premiums rose nine percent in 2011 to an average of $15,073 for an employer-subsidized family plan, according to the Kaiser Family Foundation. Over the past 10 years, premiums have increased a "whopping" (Kaiser's word) 113 percent, much faster than wage increases and general inflation. So you can see what almost certainly would happen to Medicare beneficiaries beginning in 2022: They would have to shell out more and more money out of their own pockets every year just to cover the premiums their private insurers would charge them.
That's bad enough, but consider this: Health insurers began implementing a strategy several years ago to move all of us into high-deductible plans, meaning every one of us will soon be paying (if we're not already) thousands of dollars of our own money for medical care before our insurance company will pay a dime. Insurers adopted this strategy because they have failed miserably at controlling health care costs. If you can't control those costs, the only way you can make Wall Street-pleasing profits if you're an insurer is to keep hiking premiums and shifting more of the cost of care to policyholders.
Under the privatized Medicare program Ryan envisions, the effect of that cost-shifting strategy would be disastrous for the growing number of senior citizens who are finding that every year they have less and less money to make ends meet.
Almost half of Americans now die with virtually no financial assets, according to a recent study by economics professors at Harvard, MIT and Dartmouth. They found that 46.1 percent of Americans are now dying with less than $10,000 (19 percent die with no financial assets at all) and that many rely almost entirely on Social Security benefits for support. Not surprisingly, those people are disproportionally in poor health.
"With such low asset levels, they would have little capacity to pay for unanticipated needs such as health expenses or other financial shocks or to pay for entertainment, travel, or other activities," the professors wrote.
Those findings are not so surprising when you look at other recent measures of Americans' wealth and our ability -- actually, our inability -- to save money. The Federal Reserve reported in June that, after adjusting for inflation, median family income fell to $45,800 in 2010 from $49,600 in 2007. The recent economic crisis also took a big toll on median home equity, which fell during the same period from $110,000 to $75,000, and family net worth, which plummeted 40 percent from $126,400 to $77,300.
For the relatively wealthy Americans lucky enough to have a 401(k), most of their account balances are not nearly high enough to be of significant help when they retire. According to Fidelity Investments, the country's largest 401(k) administrator, the average account balance among its customers at the end of June was $72,800, which is down 2.4 percent from March and about the same as it was in June 2011. And balances in Health Savings Accounts are also low -- averaging just $1,494 in 2010, according to J.P. Morgan.
So one has to wonder how Messrs Ryan and Romney think making our senior citizens pay a lot more for care under a privatized Medicare program could even remotely be a Path to Prosperity for most of us. Could it be that they're not thinking -- or even caring -- about most of us but about people who, like them, have such big 401(k) accounts they'll be able to do just fine in their golden years regardless of how Medicare is structured?
He responds like a person whose had too much schooling and not enough real life
experience/common sense.
Voters, citizens, friends and neighbors. Health care for millions of Americans will soon be at our doorstep. The crush of humanity will either consume the very foundation of our freedoms of choice and liberty or we can act now to ease the struggle for independence for so many. The insurance once spoken of as isolation from calamity has become what is feared most.
Single payer with cost controls is the simplest way to enact the broadest most comprehensive group policy for all Americans. There are models. There are facts and figures we can utilize. What we need is competent action to form the worlds most complete authority on health care in the world.
They don't. Its a "Path to Prosperity" for the already (very) prosperous.
So supposing we spot Mr. Potter that increasing financial costs associated with Mr. Ryan's plan will be very difficult for seniors to bear, how is the existing Medicare system supposed to be more bearable for taxpayers? By the time the folks who would be affected retire, we're going to be in a situation where we have two workers for every retiree on Social Security and Medicare. Medicare is already at the point where nearly half of all money comes from general revenues (i.e., corporate and personnal income taxes vice Medicare taxes and Medicare fees). How is a system where that cost is borne by a shrinking workforce supposed to be fiscally viable? You could double the tax rates on the wealthy and you wouldn't be able to pay for those hikes.
This built-in timebomb is going to destroy Medicare regardless of whether we do anything; the only solution will be large, middle-class tax hikes that will pit the working class against the seniors. At least Mr. Ryan has the honesty of pointing this out and proposing a solution (for which he has Democratic co-sponsors, another fact this article doesn't mention). Mr. Obama's solution is to just let future politicians figure out how to deal with it; a complete kick-the-can mentality. At least Mr. Ryan's proposed solution makes an attempt to control costs by introducing competition, which has a much better track record at containing costs than electronic records or bureaucratically-imposed practices.
A majority of seniors will, yet again, vote GOP. Against their own interests, against the interests of their children and grandchildren, and against the best interests of this nation.
"Almost half of Americans now die with virtually no financial assets, according to a recent study by economics professors at Harvard, MIT and Dartmouth. They found that 46.1 percent of Americans are now dying with less than $10,000 (19 percent die with no financial assets at all) and that many rely almost entirely on Social Security benefits for support. Not surprisingly, those people are disproportionally in poor health." Frankly, depending on the context, I don't necessarily see a problem with this. I see no problem with people that have earned their money spend most of it instead of giving it away or bequeathing it to their heirs.
However, the notion the Romney/Ryan will be looking to significantly reduce medicare and social security (which will impact me as I was born after 1956) causes me huge concern. Unless the Romney/Ryan team rethink and modify their plans, I may very well be voting for Obama/Biden.
Thus, he cannot influence or motive the business community and has completely failed since he became president. You should watch some financial shows/reports and listen to business leaders.
You should also know as you seem to be unaware, revenues received unincorporated business owners are taxes as personal income. So tax cuts to these 'executives' do go to the bottom line for their businesses and impact hiring.
Obama's stimulus plan has been a complete failure - he borrowed money to give to the states so they can retain expensive public workers; didn't create any notable jobs.
You won't hear the stupid comments from Romney like "You didn't make that..." and "the private sector is doing just fine.." as we did from Obama. Obama has no real idea how to working with the business & economic community and they seem to have largely ignored him.
I wouldn't call HC a Ponzi scheme, and it's not a right. It's a service.
The problem is the republican's won't tax them simply because they are the ones who line their pockets with campaign money.
So, the republican's look elsewhere to get that money and now it's the elderly. This same kind of republican logic just happened in Michigan.
Gov. Synder and the republican majority recently passed a bill to eliminate the small business tax.
Then to make up for that loss of revenue and to balance the budget, they state taxed the elderly's pensions. Same republican policy, cater to the 1% and take it out on someone in the 99%
Synder said that passing this bill would create jobs and in all fairness the elderly should pay state taxes.
Well, Michigan's unemployment rate has risen, so where are the jobs the republicans said were going to be created? And now, the elderly get to pay taxes for business'es that they don't even own.
If R & R do get elected and make changes to medicare, the retiree's in Michigan are going to get hit very hard and won't be able to make ends meet with taxes and health care costs.
And what about the rest of America's retiree's? How are they going to create enough jobs to help all of these people that they will force back into the workforce to make ends meet?