Posts Tagged ‘entitlements’
Health Care News
When the same Congressmen who voted for Obamacare vote to repeal a provision of it, it’s obvious that provision must be totally unworkable on every level. And that’s what happened to the Community Living Assistance Services and Support (CLASS) Act.
Formally repealed in January’s fiscal cliff deal, CLASS was Obamacare’s attempt at creating a new long-term care entitlement that was once referred to by Senator Kent Conrad (D–ND) as “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.” CLASS was one of Obamacare’s most overt failures.
CLASS was supposed to begin in 2011 as a voluntary, government-run long-term care program that was supposed to be fully funded by beneficiaries’ premiums and require no federal tax dollars. Like most government entitlements, this deal sounded too good to be true—and it was.
This concept was so flawed that even the Obama Administration recognized that implementation had to be stopped. A letter to Congress in 2011 from a CLASS administrator warned of extreme adverse selection in the program, stating that “if healthy purchasers are not attracted to the CLASS benefit package, then premiums will increase, which will make it even more unattractive to purchasers who could also obtain policies in the private market. This imbalance in the beneficiary pool would cause the program to quickly collapse.”
Health Care News
Tonight, the American people will be watching President Obama’s fifth State of the Union address. How has he done on his promises over the past four years?
Take a look at some of the promises Obama made back in 2009 during his first State of the Union.
“I pledged to cut the deficit in half by the end of my first term in office.”
During his first State of the Union, newly inaugurated President Obama vowed to cut the deficit in half by the end of his first term. Instead, Obama has averaged deficits nearly three times that of his predecessor.
For those who were concerned with President George W. Bush’s $4 trillion national debt, this pledge may have seemed like the “hope and change” the American people voted for in 2008. However, the reality of America’s additional debt over the past four years under the Obama Administration is staggering—almost $6 trillion in four years, on track to triple the amount Bush accumulated over his eight years as President. Now that Obama is heading into his second term, we’ve seen quite a change from the Barack Obama who thought $4 trillion in debt was “irresponsible” and “unpatriotic.”
“Over the next two years, this [stimulus] plan will save or create 3.5 million jobs.”
The President promised great things from the stimulus plan, but as Heritage’s J.D. Foster has said, we have to look at his record. He may have promised 3.5 million new jobs, but he’s 7.7 million jobs in the hole instead.
Health Care News
Addressing our nation’s overspending problem cannot be done without reforming entitlements, especially Medicare and Medicaid. As Washington remains clearly divided over how to get it done, Senator Orrin Hatch (R–UT) has outlined 5 health care reforms that are bipartisan.
These reforms have had the support of both parties in the past and are capable of effectively reining in spending:
- Raise Medicare’s eligibility age. Hatch proposes raising the Medicare eligibility age gradually from 65 to 67, which would coincide with Social Security. This proposal enjoys a wide range of support from both sides of the aisle and would garner significant savings for the Medicare program. Heritage’s reform proposal would raise the eligibility age to 68, which would yield an estimated savings of $243.6 billion over 10 years.
- Reform Medigap to incentivize better behavior. Limiting Medicare supplemental plans that cover initial out-of-pocket costs would decrease the excessive utilization currently occurring. This would incentivize better behavior from seniors and lower Medicare’s costs over time.
Health Care News
Last week, the Senate Budget Committee Republican staff released a report revealing that, over the next 75 years, Obamacare will add an additional $17 trillion in unfunded obligations—i.e., the benefits promised by the federal government that haven’t yet been paid for.
Before Obamacare, federal programs were already responsible for racking up 75-year unfunded obligations of an astounding $65 trillion. According to the report, Medicare accounted for $38 trillion, Medicaid was responsible for over $20 trillion, and Social Security added $7 trillion.
With the enactment of Obamacare, projected federal unfunded obligations have increased by $17 trillion, now totaling $82 trillion. Obamacare’s massive Medicaid expansion and new exchange subsidies are largely to blame.
Proponents of the recently passed health care law argue that the legislation was needed to improve the nation’s health system for both today’s citizens as well as future generations. But there are many reasons to be concerned that this new law will instead deliver both a lower quality health system and more costly and burdensome government for those paying taxes in future years. To learn more, click here.
Health Care News
Now that Obamacare passed, the Left is calling it a truly historic achievement, chalking it up as a victory for health care reformers everywhere. With the enactment of the House-Senate reconciliation bill, the so-called “fix” to the Senate bill, House Speaker Nancy Pelosi (D-CA) remarked that the bill did “something very important for the American people, very significant to their daily lives.” Well, Congressional liberals are correct about one thing. It’s historic. It is an unprecedented takeover of Americans’ health care now equal to one-sixth of the entire US economy. It is historic for its partisan backroom deals and controversial parliamentary tactics. And it is historic for its apparent disregard for the strongly held opinion of the majority of the American people. But it will long be remembered for its catastrophic side effects- in record spending and its disruption- on the lives of millions of Americans.
Recent research by Heritage’s Kathryn Nix looks at some of the major consequences of Obamacare. The paper outlines the ten ways in which liberals’ health care agenda will be a disaster for Americans. They include: (more…)
Health Care News
Thursday, Democrats and Republicans will convene at the President’s request to discuss the way forward on achieving bipartisan health care reform. In a recent paper, Heritage’s Nina Owcharenko discusses how congressional Democrats and the President can use this meeting to start over on health care reform by enlisting Republicans to pass legislation both sides agree on.
Says Owcharenko, “If the President is sincere and the summit is going to be successful, it must begin by setting aside the highly unpopular bills that the House and Senate have developed. Simply adjusting the magnitude of these proposals or adding new “conservative” provisions as suggested in the President’s latest proposal, does not change their fundamental direction.”
Polls show a majority of Americans stand in opposition to the left’s health care proposals, which fall short of meeting expectations established by promises made by the President. To restore the nation’s trust in Washington, Congress and the President should focus on areas of reform which have bipartisan support. Owcharenko suggests the following as areas in which to move forward: (more…)
Health Care News
The health care plan President Obama recently released is mostly a combination of the different plans passed by the House of Representatives and the Senate. But in one major way it breaks with long-standing precedent, proposing a fundamental wrong-headed change to both entitlement policy and tax policy. He proposes for the first time to tax capital income to support entitlement programs.
Payroll taxes have always applied just to wages and salaries and the revenue those taxes raise has gone solely to pay for entitlements like Social Security and Medicare. The deal has always been that we pay payroll taxes during our working years and receive the benefits they fund after we retire. President Obama’s health care plan would shatter this compact forever.
The Hospital Insurance (HI) portion of the payroll tax is 2.9 percent on all wages and salary that is paid half (1.45 percent) by workers and half (the remaining 1.45 percent) by employers. It is supposed to pay only for the hospital insurance portion of Medicare benefits that retirees receive. President Obama’s plan adopts this break with long-held policy and doubles down by further severing the link between HI and Medicare benefits. Obama’s plan not only increases the HI tax on wages and salaries for high-income earners similar to the Senate bill, it also applies the HI tax to investment income for the first time. Obama’s unprecedented plan would levy the current 2.9 percent HI tax on what the administration obnoxiously refers to as “unearned” income, which includes capital gains, interest, dividends, annuities, royalties and rents for families earning more than $250,000 a year ($200,000 for single filers). (more…)
The President and his administration keep saying we cannot afford not to push through a major overhaul to the health care system, one-sixth of the U.S. economy. They’re partially right in that we do have a massive problem we can’t afford not to fix. But the focus is all wrong. Instead of creating a new federal health program, Congress needs to address the spending for Social Security, Medicare and Medicaid — programs that have existed for decades — that is set to explode.
Long-term excess costs for Social Security and Medicare alone are $43 trillion. When added to the national debt, that is about $184,000 for every man, woman and child in the U.S. America’s seniors are going to have to make some tough sacrifices so younger generations like their children and grandchildren aren’t saddled with massive debt to pay for these programs. But forcing them to make these sacrifices in order to create massive new benefits for others is not the way to go about it. (more…)
Sometime next month the Senate will be forced to raise the federal debt limit beyond a record $12.1 trillion. While the current recession has exacerbated the problem, our rising national deficits are actually a structural problem a long time in the making. In the coming decades, the cost of Social Security, Medicare, and Medicaid benefits will leap from 8.4% of gross domestic product (GDP) to 18.6% of GDP—an increase of 10.2% of GDP. To educate Americans about our nation’s large and growing fiscal imbalance The Heritage Foundation has, since 2005, teamed up with the The Concord Coalition, The Brookings Institution, and former U. S. Comptroller General David Walker to encourage Americans to demand action through a Fiscal Wake Up Tour.
Today The Concord Coalition released four video briefings from top national experts on the fiscal challenges facing the country, including the one on the right side of the screen, under “Featured Videos,” from Heritage Vice President for Domestic and Economic Policy Studies Stuart Butler.
You can find many of the charts used in Butler’s presentation in the 2009 Federal Revenue and Spending Book of Charts.
Last year 16 federal budget experts from seven think tanks (including: American Enterprise Institute, Brookings Institution, Concord Coalition, Heritage Foundation, New America Foundation, Progressive Policy Institute, and Urban Institute) issued a paper concluding:
- Congress should enact a real long-term budget for Medicare, Medicaid and Social Security that would limit their growth, take them off auto-pilot, and curb their current ability in the budget process to pre-empt funds from other types of programs, such as defense.
- Congress and the President should enact long-term budgets for Social Security, Medicare, and Medicaid and be required to review them every five years. The rules for the five-year review must include a trigger or action-forcing device that automatically make changes when projected spending exceeds budgeted amounts.
- The long-run costs of these three programs should be made visible in the budget at all times and considered when decisions are made.
The Heritage Foundation further recommends:
- Income-adjusting Social Security benefits to target needy seniors more effectively. This could be accomplished through “progressive indexing,” which would index initial benefit levels for middle-income and upper-income families to price inflation rather than wage growth, eliminating much of the increased Social Security costs driven by higher benefits. This would also target more benefit growth to lower-income retirees. If accompanied by an increase in the retirement age, progressive indexing could eliminate the entire Social Security shortfall.
- Reducing the massive Medicare Part B and Part D subsidies for upper-income families. These programs are not social insurance: Enrollees did not earn their benefits with payroll taxes. Rather, they are large subsidies from taxpayers. Part B recently began modest income-relating. Long-term fundamental reform will likely involve bringing more choice and competition into health care, such as moving Medicare from a defined-benefit system to a defined-contribution system.
- Converting Medicaid into a block grant to states would eliminate state incentives to overspend on Medicaid. Additionally, giving states more flexibility to craft different Medicaid packages for different individuals based on their unique personal circumstances could save money while improving service delivery. State incentives to help individuals purchase long-term care insurance could also substantially reduce Medicaid’s burden insofar as these expenses are concerned.
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