Wednesday, April 28, 2010

FW: Enduring ObamaCare Week #5

 


 

Dear Policy Patriots,

With every week that passes, we learn more about ObamaCare and it just gets worse.  The recent report on the practical effects of ObamaCare from the Chief Actuary of the Centers for Medicare and Medicaid (CMS) is devastating.

Here are the salient findings of this report:

  • Health care costs will go up, not down. National health expenditures will increase from 17 percent of GDP now to 21 percent under the new law and will be higher than without the legislation. Net federal spending on health care will also increase.
  • Health care shortages are "plausible and even probable." Because of the increased demand for health care, "supply constraints might initially interfere with providing the services desired by the additional 34 million insured persons."
  • 14 million employees will lose their employer coverage. Employees of small firms are especially at risk (despite small employer tax credit subsidies).
  • 2 million employees who lose coverage will have to enroll in Medicaid.
  • A Medicaid insurance card is not a guarantee of care. An estimated 18 million people will be added to Medicaid. However, because there is no corresponding increase in the supply of caregivers, "it is reasonable to expect that a significant portion of the increased demand for Medicaid would be difficult to meet, particularly over the first few years."
  • One in ten insured workers will see their health benefits taxed. By 2019, more than 10% of insured workers will "be in employer plans with benefit values in excess of the thresholds (before changes to reduce benefits) and this percentage would increase rapidly thereafter."
  • Higher taxes will lead to higher premiums. The new taxes on medical devices, prescription drugs, and insurance plans "would generally be passed on through to health consumers in the form of higher drug and device prices and higher insurance premiums."
  • There are more than one-half trillion in Medicare cuts. The new health law cuts "$575 billion" from Medicare.
  • Medicare cuts would threaten almost one in every seven hospitals. About "15 percent of Part A providers would become unprofitable within the 10-year projection period."
  • Overall access to care for seniors would go down. Because of the law's payment reductions, "providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program.
  • 7.4 million people will lose access to Medicare Advantage plans. Enrollment in MA plans will be cut in half (from its projected level of 14.8 million under the current law to 7.4 million under the new law).
  • False advertising: The new "Medicare Tax" doesn't go to Medicare. "Despite the title of this tax, this provision is unrelated to Medicare; in particular, the revenues generated by the tax on unearned income are not allocated to the Medicare trust funds."
  • False advertising: Budgetary double-counting does not improve Medicare's solvency. Medicare cuts "cannot be simultaneously used to finance other federal outlays (such as the coverage expansions) and to extend the [life of the Medicare] trust fund, despite the appearance of this result from the respective accounting conventions."
  • The new long-term care insurance plan (CLASS Act) is unsound. The program faces "a significant risk of failure" because the high costs will attract sicker people and lead to low participation.
  • The promise to those with pre-existing conditions is unfunded. "By 2011 and 2012 the initial $5 billion in Federal funding for [high risk pools] would be exhausted, resulting in substantial premium increases to sustain the program."
  • The law does almost nothing to limit actual fraud and abuse. The fraud provisions in the law will save only about two percent of $47 billion in suspect claims.

 

 


Saturday, April 10, 2010

Pension Time Bomb

 

California's $500-billion pension time bomb

The staggering amount of unfunded debt stands to crowd out funding for many popular programs. Reform will take something sadly lacking in the Legislature: political courage.

The state of California's real unfunded pension debt clocks in at more than $500 billion, nearly eight times greater than officially reported.

That's the finding from a study released Monday by Stanford University's public policy program, confirming a recent report with similar, stunning findings from Northwestern University and the University of Chicago.

To put that number in perspective, it's almost seven times greater than all the outstanding voter-approved state general obligation bonds in California.

Why should Californians care? Because this year's unfunded pension liability is next year's budget cut to important programs. For a glimpse of California's budgetary future, look no further than the $5.5 billion diverted this year from higher education, transit, parks and other programs in order to pay just a tiny bit toward current unfunded pension and healthcare promises. That figure is set to triple within 10 years and -- absent reform -- to continue to grow, crowding out funding for many programs vital to the overwhelming majority of Californians.

How did we get here? The answer is simple: For decades -- and without voter consent -- state leaders have been issuing billions of dollars of debt in the form of unfunded pension and healthcare promises, then gaming accounting rules in order to understate the size of those promises.

As we saw during the recent financial crisis, hiding debt is not a new phenomenon. Indeed, General Motors did something similar to obscure the true cost of its retirement promises. Through aggressive accounting, for a while it, too, got away with making pension contributions that were a fraction of what it really needed to make, thereby reporting better earnings than was truly the case.

But eventually the pension promises come due, and for GM, that meant having to add extra costs to its cars, making its prices less attractive to consumers and contributing to its eventual bankruptcy.

In California's case, past pension underfunding means reduced funding of current programs. This explains why pension costs rose 2,000% from 1999 to 2009, while state funding for higher education declined over the same period.

What can we do about this? For the promises already made, nothing. They are contractual, and because that $500 billion of debt must be paid, retirement costs will rise dramatically no matter what we do. But we can reduce the sizes of promises made to new employees and require full and truthful disclosure so that pension debt can never again be hidden.

Last summer Gov. Arnold Schwarzenegger proposed exactly that. Since then? Silence. State legislators are afraid even to utter the words "pension reform" for fear of alienating what has become -- since passage of the Dills Act in 1978, which endowed state public employees with collective bargaining rights on top of their civil service protections -- the single most politically influential constituency in our state: government employees.

Because legislators are unwilling to raise issues that might offend that constituency, they have effectively turned the peroration of Abraham Lincoln's Gettysburg Address on its head: Instead of a government of the people, by the people and for the people, we have become a government of its employees, by its employees and for its employees.

This explains why legislators fight harder to overturn employee furloughs than to reform pensions and elect to pay more in compensation to just 65,000 employees in one single department -- corrections -- than they spend on a higher education system serving 10 times as many people.

Simply put, the single most important step a legislator can take to protect programs and taxpayers is to embrace pension reform. There is no structural impediment to pension reform, and no initiative has forced legislators to issue all that pension debt. All of the damage has been caused by legislation, most notoriously SB 400 in 1999, which retroactively and prospectively boosted pension promises by billions of dollars without boosting contributions. Likewise, all the remediation can be accomplished by legislation.

Even the state legislature of Illinois -- a legendary poster state for pension misbehavior -- has now passed pension reform. There's no reason the California Legislature cannot do the same.

Call or write your legislator about pension reform, and while you're at it, remind him or her that we are indeed a government of the people, by the people and for the people.

David Crane is special advisor to Gov. Arnold Schwarzenegger for jobs and economic growth.

Friday, April 02, 2010

Social Security = An Excellent Summary........


Social Security 

Your Social Security

Just in case some of you young whippersnappers (& some older ones) didn't know this. It's easy to check out, if you don't believe it.  
Be sure and show it to your kids. They need a little history lesson on what's what and it doesn't matter whether you are Democrat or Republican. Facts are Facts!!!

 

Our Social Security

Franklin Roosevelt, a Democrat, introduced the Social
Security (FICA) Program. He promised:

1.) That participation in the Program would be
Completely voluntary,

 
No longer Voluntary

 

2.) That the participants would only have to pay
1% of the first $1,400 of their annual
Incomes into the Program,

 
Now 7.65%

 

3.) That the money the participants elected to put
into the Program would be deductible from
their income for tax purposes each year,

 
No longer tax deductible

 

4.) That the money the participants put into the
independent 'Trust Fund' rather than into the
general operating fund, and therefore would
only be used to fund the Social Security
Retirement Program, and no other
Government program, and,

 
Under Johnson the money was moved to

 
The General Fund and Spent

 

5.) That the annuity payments to the retirees
would never be taxed as income.

 
Under Clinton & Gore

 
Up to 85% of your Social Security can be Taxed

 

Since many of us have paid into FICA for years and are
now receiving a Social Security check every month --
and then finding that we are getting taxed on 85% of
the money we paid to the Federal government to 'put
away' -- you may be interested in the following:

------------ --------- --------- --------- --------- --------- ----

Q: Which Political Party took Social Security from the
independent 'Trust Fund' and put it into the
general fund so that Congress could spend it?

A: It was Lyndon Johnson and the democratically
controlled House and Senate. 


------------ --------- --------- --------- --------- --------- --------- --

Q: Which Political Party eliminated the income tax
deduction for Social Security (FICA) withholding?

A: The Democratic Party. 


------------ --------- --------- --------- --------- --------- --------- -----

Q: Which Political Party started taxing Social
Security annuities?

A: The Democratic Party, with Al Gore casting the
'tie-breaking' deciding vote as President of the
Senate, while he was Vice President of the  US 


------------ --------- --------- --------- --------- --------- --------- -

Q: Which Political Party decided to start
giving
annuity payments to immigrants?

AND MY FAVORITE:

A: That's right!

 
Jimmy Carter and the Democratic Party.
immigrants moved into this country, and at age 65,
began to receive Social Security payments! The
Democratic Party gave these payments to them,
even though they never paid a dime into it! 


------------ -- ------------ --------- ----- ------------ --------- ---------

Then, after violating the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away! 


And the worst part about it is uninformed citizens believe it!

 
If enough people receive this, maybe a seed of
awareness will be planted and maybe changes will
evolve. Maybe not, some Democrats are awfully
sure of what isn't so.

But it's worth a try. How many people can YOU send this to?

Actions speak louder than bumper stickers.

 
AND CONGRESS GIVES THEMSELVES 100% RETIREMENT FOR ONLY SERVING ONE TERM!!!


 
A government big enough to give you everything you want, is strong enough to take everything you have.
-Thomas Jefferson