Paul Krugman: A Test for Democrats

Paul Krugman on good Democrats, bad Democrats, and the ugly thing the bad Democrats are about to do:

A Test for Democrats, by Paul Krugman, Commentary, New York Times: It’s been a good Democrats, bad Democrats kind of week. The bill expanding children’s health insurance that just passed in the House makes you want to stand up and cheer. Reports that Senator Charles Schumer opposes plans to close the hedge fund tax loophole make you want to sit down and cry.

Let’s start with the good news: The House bill ... would provide coverage to five million children who would otherwise be uninsured.

The bill is so good that it has Republicans spluttering. “The bill uses children as pawns,” declared Representative Pete Sessions of Texas. Yes, the Democrats are exploiting children — by providing them with health care.

The horror, the horror!

What’s especially encouraging is the way House Democrats were willing to take on the insurance companies. The bill pays for children’s health care in part by cutting subsidies to Medicare Advantage, a privatization scheme that yields big profits for insurers...

All in all, the bill is both a fine piece of legislation and a demonstration that Democrats can stand up to special interests. Happy days are here again.

Or maybe not.

The hedge fund tax loophole is a crystal-clear example of unjustified privilege. ... For example, ... pension fund ... manag[ers] ... are taxed ... at rates up to 35 percent. But if that money is invested with a hedge fund ... the fees the ... manager receives ... are mainly taxed as capital gains, with a maximum rate of 15 percent. ...

We’re told that the tax rate on hedge fund managers has to be kept low to encourage risk-taking. But the managers aren’t risking their own money. The only risk ... is the uncertainty of their fees — and as any ... salesman who depends on commissions can tell you, most people with uncertain incomes don’t get any special tax breaks.

We’re also told that management fees would rise, reducing returns to investors... — as if someone with a $100-million-a-year hedge fund job would walk away if his take-home pay fell from $85 million to $65 million.

And we’re talking about a lot of lost revenue here. The Economic Policy Institute estimates ... $6.3 billion a year — the cost of providing health care to three million children. Of that total, almost $2 billion a year ... goes to just 25 individuals.

If being a Democrat means anything, it means opposing this kind of exorbitant privilege. Yet ... Mr. Schumer says that he opposes any increase in hedge fund taxes unless tax breaks for the energy and real estate industries are also eliminated, and pigs start flying. Seriously, his claim that he really would support closing the hedge fund loophole if other, deeply entrenched tax privileges were eliminated ... is a fig leaf that hides nothing.

Mr. Schumer ... insists that the large financial contributions that hedge funds make to his party aren’t influencing him. Well, I can’t read his mind, but from the outside his position looks remarkably like money-driven politics as usual. And that’s not acceptable.

Look, the worst thing that could happen to Democrats is for voters to conclude that there’s no real difference between the parties, that when you replace Republicans with Democrats, all you do is replace sweet deals for Halliburton with sweet deals for hedge funds. The hedge fund loophole is a test — and it’s one that Mr. Schumer is failing.

_________________________
Previous (7/30) column: Paul Krugman: An Immoral Philosophy
Next (8/6) column: Paul Krugman: The Substance Thing

Comments

[anne]

There is an article about a young man, a summer counselor, in Minneapolis who saved who knows how many school children on a bus sliding to the Mississippi. The young man left auto-mechanic school himself this past Christmas because he could not afford the darned tuition. I suppose that leaving school for lack of tuition was fortunate for lots of children, but there is a greedy madness about us that is beyond all understanding.

Children with no health care insurance, heroic kids out of school when they should be in school, a city needlessly and still ruined, a bridge simply fallen, a hopelessly lunatic but tragic occupation, and the wealthiest people in the country are too stupid to figure know how much income taxes they should be paying.

Heck, I am not going to Confession this week and likely not next week either; Amen.

[anne]

http://www.nytimes.com/2007/08/03/us/03bus.html?hp

August 3, 2007

Stunned Victim Turns Hero in Busful of Children
By ELLEN BARRY

MINNEAPOLIS — By the time they reached the Interstate 35W bridge, the children on the bus were waterlogged and serene, some still in their bathing suits, ready to go home. It was a rare moment of quiet, and as the bus crossed over the Mississippi River a few of the counselors, barely out of adolescence themselves, had dropped off to sleep in their seats.

What happened then is difficult to describe, even a day later. Angi Haney, a counselor, realized first that she was not in her seat, and then that she was not touching any part of the bus, and then that “we were just all flying in the air.” T.J. Mattson, a 12-year-old with wire-rimmed glasses, looked out a window and saw water on the other side. Dust filled the bus, blotting out its passengers.

And then they came to rest. Jeremy Hernandez, the whip-thin 20-year-old who works as the summer program’s gym coordinator, remembers time seemed to congeal. Then something broke the spell, and his heart began pounding, and he jumped over two rows of seats and kicked open the back door. He remembers coolers flying, and he remembers passing along children to strangers lined up like a bucket brigade.

“I just acted,” Mr. Hernandez said Thursday. “I just moved. My feet were just moving. My body was following.”

The people gathered at the Waite House, the center in the Phillips neighborhood that sponsored the bus trip, were shocked, but their shock was mixed with joy. Of the 61 children and others in the school bus who plunged along with the bridge, only 14 required hospitalization, and 10 of those were quickly released. None died.

Instead, they returned to the center a day later — some with cuts and bruises, some unmarked — and swept one another up in hugs. “It’s one of those things,” said Anthony Wagner, president of Pillsbury United Communities, a nonprofit organization that operates the Waite House. “Five seconds, 10 seconds earlier, they would’ve been in the river. I think a miracle happened.”

Waite House is a low-slung brick building in Phillips, a south-side neighborhood whose population in 2000 was almost 12 percent American Indian, compared with 2.2 percent in the city as a whole. The area is also home to Hispanic immigrants and East African refugees; photographs in Waite House’s hallway show Cinco de Mayo celebrations, American Indian powwows and young girls in elaborate Hmong ceremonial dress.

Wooden houses with small yards line the streets, but children growing up in Phillips are hardly sheltered, said Kelly Morgan, who has lived there for several years. Forty percent of them live below the poverty line, according to census figures.

“You see everything you’d see on a New York street corner,” Ms. Morgan, 45, said.

For the 60 children who attend Waite House’s summer programs, a reward comes once a week: they pile into buses for a field trip like Wednesday’s, to a water park. On the trip back, they were singing a “really dorky” song in Spanish, about an elephant, said Monica Segura, 19, the center’s summer coordinator. The children remarked on the river as they passed over it, she remembered, and then the bridge dropped from under them.

Ms. Segura grabbed two children who were directly in front of her, but others fell on top of one another and started screaming. The front of the bus was wedged against a guardrail, blocking the doors. The silence was broken, she said, by Mr. Hernandez, who “jumped over the seats and kicked out the door.”

Mr. Hernandez sat beside her, looking self-conscious as she told the story. He was wearing a white tank top and low-slung jeans, and his first name was tattooed in elaborate letters on his left bicep. He had hoped to become an auto mechanic, he said, but dropped out of a training program at Christmastime because he could no longer afford the tuition....

[anne]

Pay the miserable piddling taxes and afford a few things to build this country's strength like we could afford a few things even during the Depression. Ah, and enough, enough immediately, with the lunacy of destructive and self-destructive war and occupation.

[anne]

http://www.nytimes.com/2007/08/02/health/policy/02health.html?hp

August 2, 2007

House Passes Children's Health Plan 225-204
By ROBERT PEAR

WASHINGTON — Over angry Republican objections, the House on Wednesday passed a sweeping expansion of the Children's Health Insurance Program, financed with increases in tobacco taxes and cuts in subsidies to private Medicare insurance plans for older Americans.

The bill embodies the Democrats' vision for health care, taking a step toward the goal of universal coverage while reversing what they see as Republican efforts to "privatize Medicare."

By a vote of 225 to 204, the bill passed, with support from 220 Democrats and 5 Republicans. Ten Democrats joined 194 Republicans in voting against it. The bill would provide coverage for more than four million uninsured children in low-income families, prevent cuts in doctors' Medicare payments scheduled for Jan. 1 and raise the federal cigarette tax 45 cents a pack, to 84 cents.

It would also increase assistance to low-income Medicare recipients and eliminate co-payments for most preventive care provided to Medicare recipients....

[anne]

http://www.nytimes.com/2007/08/03/washington/03health.html?hp

August 3, 2007

Senate Passes Children's Health Bill, 68-31
By ROBERT PEAR

WASHINGTON — The Senate defied President Bush on Thursday and passed a bipartisan bill that would provide health insurance for millions of children in low-income families.

The vote was 68 to 31. The majority was more than enough to overcome the veto repeatedly threatened by Mr. Bush. The White House said the bill "goes too far in federalizing health care."

But Senator Max Baucus, Democrat of Montana and chief sponsor of the bill, said, "Millions of American children have hope for a healthier future tonight."

The bill would increase spending on the popular Children's Health Insurance Program by $35 billion over the next five years.

"Covering these children is worth every cent," said Senator Orrin G. Hatch, Republican of Utah, who helped create the program 10 years ago.

The House passed a much larger bill on Wednesday, presenting negotiators with a formidable challenge in trying to work out differences between the two measures.

Still, the strong commitment to the issue by Democratic leaders virtually guarantees that they can work out a compromise before Sept. 30, when the program is set to expire. But that compromise is likely to be unacceptable to Mr. Bush....

[reason]

Wow! 10 Democrats voted against it. I suppose they a DINOs.

[anne]

Notice that there will likely be a President veto of the bill, and the House of Representatives majority is not large enough now to override a veto. Also, the Senate bill adds $35 billion for the health care needs of uninsured children from low-income familes, but this $35 billion is over 5 years as opposed to an increase ib the nilitary budget (not including Iraq) that is already at $44 billion just for the coming year. We can afford whatever we wish to afford.

[Alfarky]

It bothers me that there are citizens who do not appreciate the Military.

Evidently, they do not realize there would not be a United States of America if it wasn't for the Military since George Washington's time.

It quite obvious that education and welfare (health programs) are State's responsibilities. Why should I have to be taxed for the mismanagement of other States?

I'm retired, still paying taxes on wages I earned in 1945. I survived the Depression, WWII and served in the Korean Police Action (35,000 DEAD).

Now the Liberals wanting Socialism want to destroy this nation by excessive taxation of the working class so that Single Mothers can have more Illegitimate Children that we working individuals have to support.

The laws passed by the Democrats have caused the Children demanding health care.
No one except my parents paid for mine. That's what this is all about. Wanton Sex by unprincipled individuals who put themselves above anyone and everyone else.

Now they want us to pay the freight. Well even a Latino can get a job, earn money and go to a public school for free to become a auto mechanic. If the truth existed he probably flunked out or just dropped out. Anyhow, I don't have any pity for him, his situation or his race. I didn't invite him.

Hell, the State filed 58 false charges against my professional license and put me out of business. But I persevered found other work and proved they were crooks, but the Civil Rights Laws didn't do me any good. I still had to work as a common laborer.

All these Bleeding Hearts would have us invaded by Islam if they had their way!

[reason]

I wonder if Alfarky is a spoof? He sounds as if he though this was Russ Limbaugh here.

[Elvis]

Alfarky, you're full of malarky.
Obviously, you missed the "Greatest Generation" train.

[scav]

Alfarky? Get help.

[Robinia]

Krugman is so right about Schumer. At this moment in NY, where there is some mangling of the Governor's reform message due to his staff's misbehavior, it is easier than most times to doubt our Democratic leaders' sincerity. Show us your stuff, Chuck: come on out here to see your constituents and explain why we shouldn't tax hedge fund managers. And "they help me out" is NOT an acceptable reason.

[Elvis]

"Hell, the State filed 58 false charges against my professional license and put me out of business."

Don't have a clue what sort of "professional license" was investigated, but from the rambling nature of Mr. Alfarky's post it seems it was justified.

By the way, Mr. Alfarky, the Smithsonian was founded with a donation by an illegitimate child. Wanton sex by Royalty! How dare they?

Alfarky, are you really Al Franken pulling a fast one on us?

[Elvis]

"Krugman is so right about Schumer."
Robinia, right on. Krugman is also right about the Dems in general. There are other tests, like Iran. I would like to see some Dem candidate stand up and say,
"Iran? They don't scare me. In fact, besides their ignoramus of a president, they seem like nice folk."
I'd also like to see one stand up and say,
"Ethanol? I'd rather put it in my glass than in my tank."

But first, the Democratic National Commitee should just quietly ask any candidate who voted for the Iraq war to step aside. Shouldn't be any debate about it.

[robertdfeinman]

I'll sing my same old song again -

People argue over the "merits" of various proposals and the ideological basis for policies. What they don't realize is that its all about money and not just money, but the money of literally a handful of people.

In the case of the hedge funds: "Of that total, almost $2 billion a year ... goes to just 25 individuals."

In the case of the estate tax the number is 18 families.

Policy in this country is not being determined by the top 5% or 1% or even .1% it is being determined by a few hundred people. We already have a plutocracy and unlike France under the Louis's the people don't even realize it.

The fact that so many lackeys can be found to support these anti-democratic and economically harmful policies is an example of my adage: it doesn't take much money to bribe a poor man.

Schumer will throw away billions in federal revenues for a few hundred thousand in campaign donations. The senate will throw away about $200 billion in lost estate tax revenue because of the donations from these superwealthy families. The amount spent on direct political donations is only in the low millions over the last decade. Politicians, apparently, come cheap.

The conservative think tank pundits get their $100K per year to obfuscate the issues while supporting the hand that feeds them. They can only hope that they won't be on the next bridge when it collapses. That $200 billion in lost estate tax revenue might have been put to some infrastructure improvement instead of a vanity museum in Bentonville, financed by the Waltons.

Perhaps the Waltons will be able to fly over the non-functioning highway system when they get around, but how about the lackeys at Heritage, Cato, Discovery and the "Independent" Institute?

[Dave M.]

""Children's Health Insurance Program, financed with increases in tobacco taxes and cuts in subsidies to private Medicare insurance plans for older Americans.""

Cuts for older Americans? Uh-oh. Remember the sleazy attack ads showing President Bush pushing an elderly person in the wheelchair down the stairs? Looks like we can now show that the Democrats are doing it!

[anne]

"Children's Health Insurance Program, financed with increases in tobacco taxes and cuts in subsidies to private Medicare insurance plans for older Americans."

What this means is cuts in subsidies not to Medicare recipients but to private insurnce companies that charge the government more for competing with Medicare coverage while offering no more patient coverage or even less coverage than regular Medicare. There will be absolutely no harm to Medicare recipients. Here the writer of the article should have explained at once.

[anne]

http://www.nytimes.com/2007/08/02/health/policy/02health.html?hp

August 2, 2007

House Passes Children's Health Plan 225-204
By ROBERT PEAR

Under current law, Medicare payments to doctors would be cut 10 percent in January. Under the bill, payments would go up 0.5 percent.

More than eight million of the 43 million Medicare beneficiaries are in plans offered by companies like Humana and United Health. Since December 2005, enrollment in private plans has shot up 40 percent.

On average, the Congressional Budget Office says, Medicare pays the private plans 12 percent more than it would cost to cover the same people under the traditional Medicare program. The House bill would eliminate the differential, saving $50 billion over the next five years and $157 billion from 2008 to 2017....

Republicans said it was wrong to cut Medicare to finance coverage for children. "This is kids' care against Medicare," said Representative Kevin Brady of Texas. "It pits children against their grandparents."

The Bush administration and many Republicans in Congress have encouraged the development of private plans, saying they can coordinate care and control costs better than the government-run Medicare. Democrats say the "overpayments" are unjustified and threaten the solvency of the Medicare trust fund.

[Dave M.]

feinman says..
"In the case of the estate tax the number is 18 families."

Please provide evidence for your claim. Your number is way off. No citations from left-wing web sites, please. I doubt your claim is true because according to the IRS, there were about 25,000 taxable estates in 2005, even after using the most current $2 million exemption. (this year).

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96442,00.html

I also see that the IRS has 345 estate tax attorneys on staff last year.

http://www.ombwatch.org/article/articleview/3565/1/93?TopicID=1

[anne]

"Cuts for older Americans?"

Not with a Democratic Congress but cuts and harm to Medicare if Republicans were in control. Republican charges against the House of Representatives health care plan are meant to deceive and cause fear as usual and are of course rubbish.

[Dave M.]

anne says..." There will be absolutely no harm to Medicare recipients.""

Doubt it. The choice of doctors will go down. From the press release..

""More than eight million of the 43 million Medicare beneficiaries are in plans offered by companies like Humana and United Health. Since December 2005, enrollment in private plans has shot up 40 percent. ""

Why are these people flocking to these plans? One main reason is because they have a better choice of doctors. So many doctors these days are refusing medicare patients because of poor reimbursement. IMO, Democrats plan of socialized medicine will be a total disaster. And they are implementing it a little every day.

[anne]

"Cuts for older Americans? Uh-oh."

Republican rubbish, as always. And, George Bush has already promised to veto the extension of health care insurance to millions of already eligible children. But, that is what George Bush and radical Republicanism are always about, cutting health care insurance whether for children or adults.

[Arne (not anne)]

"No citations from left-wing web sites, please."
The ultimate Catch-22. Possession of facts that support a left-wing view makes you a left-winger. Being a left-winger makes you suspect. Not having the facts means you cannot get the facts.

[anne]

Rubbish, as always, Republican rubbish, because Republicans must deal in fear-mongering rubbish. As my pleased grandparents know, they have all the choice of doctors right now under regular Medicare and that choice will only be added to. But, lie away.

Imagine, here Republicans have been in control of the White House and Congress for years and they lie still about Democrats implementing this and that when all the implementing has been Republican cuts in health care insurance.

[anne]

"IMO, Democrats plan of socialized medicine will be a total disaster. And they are implementing it a little every day."

Notice the lying idiocy, when Republicans have been in control so long and Democrats have implemented absolutely nothing. Of course, Republicans have been cutting Medicaid and, of course, guess what is happening through the South in the wake of Medicaid cuts? Why, an increase in infant mortality. Imagine, the shame.

[Holly W.]

RDF: The amount spent on direct political donations is only in the low millions over the last decade. Politicians, apparently, come cheap.

Ah, Robert, so far as I can tell, many of those politicians expect to get plum jobs in the corporate or lobbying world once they have retired from Congress, and that's when acting on those political donations will really pay off.

[Holly W.]

Dave M: according to the IRS, there were about 25,000 taxable estates in 2005 ...

But those families weren't necessarily spending big bucks to personally lobby Congress against the estate tax, or trying to stir up public sentiment against it. RDF's comment was specifically about 18 of the richest families in America who have been doing just that. Paying estate taxes and running a vigorous campaign against them aren't the same thing.

[anne]

The most immediately significant figure I can point to indicating the extent of wealth concentration in America, is that 1% of households controlled 57.5% of corporate shares by 2004. Since we have passed through an astonishing international bull stock market since then, I am entirely sure we will find wealth and income concentration to have risen through 2006.

http://www.nytimes.com/2006/01/29/national/29rich.html?ex=1296190800&en=784822e4b0735ee5&ei=5090&partner=rssuserland&emc=rss

January 29, 2006

Corporate Wealth Share Rises for Top-Income Americans
By DAVID CAY JOHNSTON

New government data indicate that the concentration of corporate wealth among the highest-income Americans grew significantly in 2003, as a trend that began in 1991 accelerated in the first year that President Bush and Congress cut taxes on capital.

In 2003 the top 1 percent of households owned 57.5 percent of corporate wealth, up from 53.4 percent the year before, according to a Congressional Budget Office analysis of the latest income tax data. The top group's share of corporate wealth has grown by half since 1991, when it was 38.7 percent....

[Dave M.]

anne said..."Rubbish, as always, Republican rubbish, because Republicans must deal in fear-mongering rubbish. As my pleased grandparents know, they have all the choice of doctors right now under regular Medicare and that choice will only be added to. But, lie away."

Huh? Democrats do it all the time. They are famous for calling a slowing in the rate of increase a "cut". That always amuses me.

""Imagine, here Republicans have been in control of the White House and Congress for years and they lie still about Democrats implementing this and that when all the implementing has been Republican cuts in health care insurance.""

It's not what has happened, it what they plan to do. That's what I am talking about. Surely you can realize that?

""Notice the lying idiocy,""

It sure didn't you take very long to engage in ad hominem attacks! That's a clear sign of a poor debator. You can do better, I'm sure.

[anne]

http://www.epi.org/printer.cfm?id=2764&content_type=1&nice_name=webfeatures_snapshots_20070801

August 1, 2007.

Who's Grabbing All the New Pie?
By Lawrence Mishel

A common metaphor for describing total national income is the image of a pie—when that pie is cut, some households get larger slices than others. How has that pie been divvied up in the current recovery?

Economic growth in the current recovery has been very unbalanced, with all of the income growth from 2001 to 2005 (the latest available data) accruing to the upper 5% and, in particular, the upper 1% of households. In fact, the bottom 90% of households experienced a 4.2% decline in their market-based incomes, * representing a loss of $1,293 per household on average from 2001 to 2005 (the latest year data is available). Had income growth been shared equally during this recovery, the bottom 90% would have been $2,071 better off than they actually were in 2005 (with a $778 income gain, instead of a loss)....

Since the beginning of the recovery in 2001, the income share of the top 1% grew 3.6 percentage points to 21.8% in 2005, greater than the 16.1% income share of the entire bottom half of all U.S. households. Correspondingly, the income shares of the bottom half and the upper-middle class dropped, respectively, by 1.4 and 2.3 percentage points. As a result, the top 1% of households gained $268 billion of total income and the bottom 90% lost $272 billion since 2001.

The increased inequality from 2001 to 2005—during a recovery no less—caused the bottom 90% of households to lose income (-$2,071) while the best-off 1% of households gained $183,902 on average.

Note

* Market-based income excludes government transfers.

Sources

Congressional Budget Office (2006, at http://www.cbo.gov/ftpdoc.cfm?index=7718&type=2), Piketty and Saez (2007, update at http://elsa.berkeley.edu/~saez/TabFig2005prel.xls), and author's calculations. We apply the CBO income shares of the bottom half and the 50-90th percentile group in 2001 and 2004 to the Piketty and Saez shares for the bottom 90% (using the assumption that the middle fifths income is split evenly between the top and bottom halves) in 2001 and 2005, respectively.

[Arne (not anne)]

"In the case of the estate tax the number is 18 families."
The loss of revenue is estimated at $1 trillion. The top 18 families (as identified by their expenditures lobbying against the inheritance tax) are reported, (in a no doubt left-wing source), http://www.citizen.org/documents/EstateTaxFinal.pdf, to save $76.1 billion. Not the 1/3 ratio discussed for the hedge fund managers, but a significant proportion (1/13) of the total.

[robertdfeinman]

Here's the link to the study which says that something on the order of $200 million has been spent over the past decade by 18 super wealthy families to promote their self interest in seeing the estate tax repealed.

I can't vouch for whether this site meets the criteria of being "left wing" or not...

Spending Millions to Save Billions (PDF)

Someone with an estate of, say four million may resent having to pay $30,000 - $40,000 in estate taxes, but this nothing compared to the $30 - $40 billion the Waltons will save.

[STS]

Schumer's fear is that the hedgies will move out of NYC - either to NJ or simply offshore to Bermuda. Welcome to globalization - no leverage for regulators.

[RW]

Dave M:

"Democrats plan of socialized medicine will be a total disaster. And they are implementing it a little every day."

Clearly does not simply refer to what is planned, it refers to what has already happened and is happening so the statement "It's not what has happened, it (sic) what they plan to do" is an incorrect summation.

And the following statements require support:

"Why are these people flocking to these plans? One main reason is because they have a better choice of doctors."

There are two claims here, both of which are controversial and require support; i.e., "flocking" appears an inaccurate characterization given the total numbers and time spans involved and "better choice of doctors" may simply not be true; e.g., HMO's.

'Democrats do it all the time. They are famous for calling a slowing in the rate of increase a "cut".'

Famous in right-wing folklore perhaps but I can't recall any cases where Democrats used such phrasing so this requires support (your putative amusement however will be accepted at face value). I do recall the Bush administration referring to slowing of the deficit as if it were a reduction so perhaps you were thinking of that?

In any case, and consistent with what appears to be the newly established gauge of proper authority, no citations from right-wing web sites allowed, please. And since I'm a progressive libertarian (what Ayn Rand would refer to as a filthy hippie as I recall but you can call me Al) I'm afraid 'right-wing' must include conservative outfits like Cato, sorry.

[memory]

"'Democrats do it all the time. They are famous for calling a slowing in the rate of increase a "cut".'"

There have been cases, which I'm too lazy to look up, in which Republicans wanted to expand the budget for programs more slowly than the combined rate of cost and eligibility increases. They disengenuously referred to this as "slowing the rate of increase." The slower rate of increase would necessarily result in a lower level a service for each person. This the Democrats quite properly called a cut.

[Arne (not anne)]

If inflation plus population is up by 4 percent, but educational expenses are up by 8 percent, is a 6 percent increase in the overall education budget an increase or a cut?

[anne]

http://www.cbpp.org/

http://www.cbpp.org/pubs/health.htm

The Center on Budget and Policy Priorities has an extensive series of studies of problems leading to legislative proposals on government health insurance for children and analyses of the legislative possibilities. Additionally the health care pages offer extensive analyses from 2000 to the present.

[anne]

Included at length in the http://www.cbpp.org/ health care policy analyses are studies of the problems of billions in dollars in subsidies that are going to private health care insurers, not to patients or health care professionals, and undermining the financing of Medicare. This is a serious problem of abusive, not competitive, insurance company practices that Paul Krugman has in turn written about.

[anne]

http://www.cbpp.org/5-10-07health.htm

May 10, 2007

Curbing Medicare Overpayments to Private Insurers Could Benefit Minorities and Help Expand Children's Health Coverage.
By Edwin Park and Robert Greenstein

The budget resolutions approved by both the House and the Senate include up to $50 billion for expanded Medicaid and SCHIP coverage for millions of uninsured low-income children, provided these costs are offset.[1] A proposal under consideration in Congress would help finance this expansion of children's coverage by reducing the substantial overpayments to private health insurance companies that participate in Medicare.

Not surprisingly, the insurance companies are waging an aggressive campaign to defend their overpayments, arguing that low-income and minority beneficiaries rely disproportionately on the private health plans in Medicare and that the overpayments are used to provide extra benefits not available through regular Medicare. But as explained below, the industry campaign, like most such lobbying efforts, does not provide a balanced assessment of the pros and cons of curbing the overpayments, either from taxpayers' perspective or that of Medicare beneficiaries.

Overpayments to Private Insurers Carry a High Cost ...

[anne]

http://economistsview.typepad.com/economistsview/2007/04/paul_krugman_th.html

April 20, 2007

Paul Krugman: The Plot Against Medicare
Edited by Mark Thoma

Paul Krugman says the plot against Medicare is moving forward, aided and abetted by some surprising allies:

NY Times: The plot against Social Security failed: President Bush’s attempt to privatize the system crashed and burned when the public realized what he was up to. But the plot against Medicare is faring better: the stealth privatization embedded in the Medicare Modernization Act, which Congress literally passed in the dead of night back in 2003, is proceeding apace.

Worse yet, the forces behind privatization not only continue to have the G.O.P. in their pocket, but they have also been finding useful idiots within the newly powerful Democratic coalition. ... There’s no nice way to say it: the NAACP and the League of United Latin American Citizens have become patsies for the insurance industry.

To appreciate what’s going on, you need to know what has been happening to Medicare... The 2003 Medicare legislation created Part D, the drug benefit for seniors... Medicare, Part D isn’t provided directly by the government..., you can get it only through a private ... insurance company. At the same time, the bill sharply increased payments to Medicare Advantage plans, which also funnel Medicare funds through insurance companies.

As a result, Medicare — originally a system in which the government paid people’s medical bills — is becoming, instead, a system in which the government pays the insurance industry to provide coverage. And a lot of the money never makes it to the people Medicare is supposed to help....

[anne]

Notice that where the Administration and Republicans in the House of Representatives had prepared to lower payments to doctors for Medicare patients by 10%, Democrats have voted overwhelmingly to raise payments to doctors by .5%. So much for the deceiving rubbish as to who really cares for physician choice, as Republican policy would limit Medicare as Medicaid is being limited and as Schip is being limited. Ah, and we can afford a whole lot more besides.

[wjd123]

What this means is cuts in subsidies not to Medicare recipients but to private insurnce companies that charge the government more for competing with Medicare coverage while offering no more patient coverage or even less coverage than regular Medicare. There will be absolutely no harm to Medicare recipients.....--Ann

Ann,

If only it were so. I have Medicare advantage. I picked it because the co-payments charged by regular Medicare were nickling and diming me to death. And for people like me living on a fixed income that can be taken literally, because extra cost means less medical care.
For instance, I just came out of the hospital. It's the second time this year I've had to go in. Traditional Medicare would have charged me close to $2000. Medicare advantage charged me nothing.

It's true that with Medicare advantage I have to go to my insurance companies health providers. That's a choice I make in order to get away form traditional Medicare's co-payments. Getting away from Medicare's co-payments means I actually go to see a doctor.

Are the subsidies to private insurance companies unfair? To the extent that anyone can op-out of regular Medicare and go into a private program they aren't. Are these subsidies an attempt by republicans to privatize Medicare? I think they are. Will subsidies to insurance companies hurt Medicare recipients in the long run? Probably, particularly if private plans show they can't compete with Medicare without the subsidies.

However your insistence that "There will be absolutely no harm to Medicare recipients." is just flat out wrong. Without the choice of Medicare Advantage health care recipients will be paying higher co-payments. Many of them will see a doctor less often because of the extra cost.

You're making the assumption that private insurers can offer Medicare Advantage members the same cuts in co-payments without being subsidized. Is that an assurance you are willing to stand behind?

If you are in favor of taking the subsidies away from private insurance companies at least be honest with yourself about the dangers it presents for those on Medicare Advantage.

One other thing you might think about. There are many uninsured children that live in families too rich for Medicaid and too poor to afford health insurance. SCHIP programs in states like New York subsidize private insurers to provide coverage for children. Are you in favor of taking those subsidies away also?

[anne]

WJD

Thank you for the careful comment. I am bothered because I have read nothing of your telling complaint, and I promise to completely examine the matter again from the assumption that I have been wrong. If your case, which I am sure is so, is at all a general case, then cutting the subsidies to ptivate insurers will be a cut in Medicare. I am much against cuts in Medicare. Time to begin again. Thank you.

[anne]

WJD

Please continue your explanation, especially concerning the Medicare co-payments, but I have asked several people and there will be answers. The articles I have, from Center on Budget and Policy Priorities on show no disadvantage to Medicare recipients from an end to the private insurance company subsidies. What are they missing?

[anne]

http://www.cbpp.org/7-31-07health4.htm

July 31, 2007

Private Plans Continue to Use Misleading Arguments to Oppose Reforms of Medicare Overpayments
By Edwin Park

[What is being missed in analysis?]

[anne]

http://www.cbpp.org/7-19-07health.htm

July 19, 2007

Informing the Debate About Curbing Medicare Advantage Overpayments
By Edwin Park

1. Do private plans cost more than it costs the regular Medicare program to cover the same beneficiaries?

2. How do Medicare Advantage overpayments affect Medicare’s finances?

3. How do Medicare Advantage overpayments affect beneficiary premiums?

4. Did the private plans once take the position that they should be paid at the same levels as regular Medicare?

5. If private plans were paid at the same rates as regular Medicare, would risk remain that Medicare Advantage plans still would be overpaid to some degree?

6. Can private plans reduce some existing Medicare benefits?

7. Do private plans disproportionately enroll low-income and minority beneficiaries?

8. What is the most efficient approach to help low-income and minority Medicare beneficiaries afford health care?

9. Do private plans disproportionately enroll rural beneficiaries?

10. Do private plans offer quality of care that is higher, the same, or lower than under regular Medicare?

11. Do the abusive marketing practices of some Medicare Advantage plans bear similarities to past marketing abuses associated with Medigap policies or the EITC health insurance tax credit of the early 1990s? ...

[anne]

Notice that from these analyses, a simple click will take you to both a summary question by question analysis and to preceeding lengthy analysis as well as to research and sources behind each analysis. What is being missed? What am I missing?

http://www.cbpp.org/5-10-07health.htm

May 10, 2007

Curbing Medicare Overpayments to Private Insurers Could Benefit Minorities and Help Expand Children's Health Coverage.
By Edwin Park and Robert Greenstein

[realpc]

The two parties are similar because both are made up of human beings. Krugman is so in love with the Democratic party, he is actually surprised when they turn out to be human and vulnerable to corruption.

The Republicans have been in power for too long so they are currently the masters of corruption. But that is the only reason. The two parties may have different philosophies but that just means they have slightly different ways of being corrupt.

Anyone who is not infatuated with one or the other party can see this clearly. Krugman is infatuated.

And all you have to do is say you want more health care for children, and no one can disagree without being called heartless and cruel. But some of us still think the constitution was a pretty good idea.

Krugman knows that health care is a dilemma, or he used to know before his brain transplant. Do you realize that a very large percent of health care money is spent keeping terminally ill patients alive a few more weeks? Do you realize drug companies are raking in billions of dollars selling poisonous cancer "medicine" that does not work? Do you want your taxes raised to pay for all that idiocy?

Yes children should all have health care. But maybe there are alternatives to shoveling yet more money and power into the corrupt federal government, and drug companies, and FDA. The Democrats don't care about this any more than the Republicans.

[Lafayette]

al: they do not realize there would not be a United States of America if it wasn't for the Military since George Washington's time.

Oh, we don’t? There wouldn't be a US either if it were not for Christopher Columbus ... but, so what?

When the military gives the same “value-for-money” as a decent education or health care, then maybe Americans be enamored of a DoD that pours billions into expenditures on “toys for boys”?

The defense of a nation is no less important a public service than the two cited above. But, when internal politics manipulates budgets on behalf of vested interests, like a military-industrial-complex, any citizen has a well-founded right to question where his tax dollar is going and why.

Today is not a proud day for Uncle Sam’s military. Or, maybe you’ve been vacationing on the moon these past 8 years?

What a waste of time and effort, that could have been better spent elsewhere.

[Lafayette]

Robinia: And "they help me out" is NOT an acceptable reason.

Quite right. So, what should be done?

Clamouring for tax reform is one thing, but an election funding reform that really works is another. Why not both?

We created this monster of a political class all by ourselves. It’s up to us to reform it, not the boys/girls in Washington who simply use it because they have to and because they all do.

Change the ground rules and we might see a change in the sorts of people in D.C. that are supposedly representing their constituencies, but instead are schmoozing with some lobbyist who is pursuing his/her own agenda on behalf of vested interests. Why not cut their wings as well?

The whole of the political process surrounding federal expenditure stinks to high heaven -- the rot in American politics is obvious. This was the America envisioned by its forefathers?

I think not. It's more like a banana republic.

[Lafayette]

wjd: If you are in favor of taking the subsidies away from private insurance companies at least be honest with yourself about the dangers it presents for those on Medicare Advantage
.

Why shouldn't the federal budget assume the subsidies of a decent medical coverage? Why assume that private insurance companies should?

You are looking at the problem ONLY from your perspective, that of the health care recipient. Look at it from the point of view of the funding necessary to have a first-rate health care service that pays extraordinary prices for private-practice medicine.
You are thus making the same mistake as all health care recipients ... that regardless of the cost, health care is a birthright. I agree with that sentiment. But, look closely then how it must be paid. Private medicine is unable to provide decent health care service at a cost that most people in this nation can afford.

The costs of private insurance programs must be recuperated from somewhere. That somewhere is inevitably the corporate program insurance premiums. And, corporations must recuperate their costs from where? From the pricing of their products and services.

The high cost of health care in America is being paid for, ultimately, by the American consumer who buys American made products/services.

So, when jobs are dislocated to China (which has no health care insurance whatsoever), you mustn't complain. After all, that too is the market mechanism at work in all its beauty (bringing you products that you can afford and willingly acquire).

All this isn’t rocket science, but simple fact. When the market mechanism generates prices that are gouging the public, it is high time for the government to step in and rectify the anomaly.

There aint no free lunch. Why not have decent public services (health care and education) that are funded out of the public purse instead of a market mechanism incapable of fair pricing for its services? Isn't it obvious that shifting the payer from the state to private enterprise is just a manipulation?

It does not solve the problem of medical costs that are exorbitant. Only state mandated pricing, that assures decent but not exaggerated fees, can give Americans health care service they can afford.

Either we pay for it out of consumer pricing or we pay for it through taxation of our total income. But, somehow, somewhere it has to be paid for. That is the issue!

[anne]

"And all you have to do is say you want more health care for children, and no one can disagree without being called heartless and cruel. But some of us still think the Constitution was a pretty good idea."

Yes, the Constitution makes it completely clear that children are not allowed to have health care insurance, especially health care insurance that would raise our taxes just to pay for poisonous cancer treatment. Thank you for reminding us.

[anne]

WJD,

So far all I can find tells me that there will be no limit in Medicare benefits to patients from limiting the subsidies to private insurers. Please provide more specifics to work on in arguing for an adverse effect so I can look further effectively. Low income Medicare patients have access to Medicaid for supplement payments, while higher income patients can use Medigap policies.

I am sure that selected Medicare Advantage plans may offer patient advantages, but I can find no evidence that this is more than a limited occurrence and no reason to believe that subsidies are being used to patient advantage. Please read the analyses of the Center on Budget and Policy Priorities, and explain further why your experience differs.

What am I missing?

[realpc]

Anne,

The constitution makes it perfectly clear that the federal government is not to be trusted. It is not the federal government's job to be our parent.

The health care children need is usually pretty simple and clever ways could be found to provide it relatively inexpensively. Most children never get cancer or other serious diseases. Yes, they should be screened because it is possible. But most of the time they just need routine checkups which can be done by nurses and other non-MD professionals.

We do not need to pay a 50% income tax to make sure all children are covered. We do not need the federal government to mismanage this, so congressmen can can hand our money out to their friends.

Democrats have a set way of solving problems -- hand it over to the federal government and raise taxes. This is seldom the best approach.

[anne]

"We do not need to pay a 50% income tax to make sure all children are covered."

Good grief, why not bother to read and think. Income taxes are not being raised, and the costs involved in the alternative legislation are absurdly small, and care of children will be by the private physicians to whom they have no access otheriwse, but of course children do not need physicians anyway so why bother at all?

[DJM]

Alfarky does seem like a spoof when he says something like "...Children demanding health care." Children don't demand... they usually just die quietly if they need health care they don't get.
It is all about priorities isn't it.

[Dave M.]

anne says... ."" The articles I have, from Center on Budget and Policy Priorities on show no disadvantage to Medicare recipients from an end to the private insurance company subsidies. What are they missing?..What is being missed? What am I missing?""

You are missing the fact that the CBBP is a left-wing group that is filled with liberals who are overly sympathetic to the poor and never saw a social program they didn't like. It's biased analysis. Even the left-wing news of MSNBC admits the CBBP is left-wing...

http://www.msnbc.msn.com/id/13813379/

Here's another side to the SCHIP story you should get educated on....

http://www.heritage.org/Research/HealthCare/wm1580.cfm

http://article.nationalreview.com/?q=ZGI3NjVlYWRlOGEyOTU2MjNlMWFmNTVjMzZlNDQ0ZTg=

And another, also with Rudy Guiliani's alternate proposal.....

http://article.nationalreview.com/print/?q=MjY5OWFjMGE2N2UyMDdkNTRmMmQ1YTVkZjJhMzhkYmI=
---------------------------
anne says.."Republican charges against the House of Representatives health care plan are meant to deceive and cause fear as usual and are of course rubbish."

No. The Schip plan was meant for poor children and is now being applied to the middle class and their adult children. The GOP and other conservatives are pointing this out plus the fact that it is crowding out private enterprise,which will definitely kill jobs. Schip plan will now include families of four making up to $82,000 a year and having kids up to the age in their 20's. That's hardly being poor and being termed a child. The Heritage Foundation’s Rea Hederman estimates — 70,000 “American families are both poor and high-income — simultaneously.” They qualify for SCHIP and the Alternative Minimum Tax.
-------------------------------
anne says..." There will be absolutely no harm to Medicare recipients.""

Not according to some. Benefits will go down. Heritage foundation says.."The Medicare Advantage program provides this diverse population of seniors with additional health benefits beyond those available in the traditional Medicare package, including better access to specialized health care and care management, lower cost-sharing, more preventative services, and prescription drugs. " Link posted above.
--------------------------------
Holly W. says... Dave M: according to the IRS, there were about 25,000 taxable estates in 2005 ...
"But those families weren't necessarily spending big bucks to personally lobby Congress against the estate tax, or trying to stir up public sentiment against it. RDF's comment was specifically about 18 of the richest families in America who have been doing just that. Paying estate taxes and running a vigorous campaign against them aren't the same thing. "

Ok, but what is the difference between 18 families lobbying Congress for changes in the estate tax law and 18 of the biggest labor unions donating to democrats for changes in labor law or 18 of the biggest law firms donating to democrats for no changes in tort law? I would think it safe to assume that those 18 families have created more jobs for working americans than the law firms and unions combined. Besides, wealthy interests trying to buy political influence has been around for centuries, internationally. Surely you know that.
---------------------------
anne says... ""The most immediately significant figure I can point to indicating the extent of wealth concentration in America, is that 1% of households controlled 57.5% of corporate shares by 2004. Since we have passed through an astonishing international bull stock market since then, I am entirely sure we will find wealth and income concentration to have risen through 2006.""

So what? With our progressive tax system, these rich people are carrying the heavy load to fund our government. In 2007, according to the CBO, the top 40% of taxpayers paid 83.1% of federal taxes while the bottom 40% paid only 6.3%. In addition, the top 5% pay 53.25% of all income taxes while earning only 32% of the income. (2001 data)

http://www.cbo.gov/ftpdocs/57xx/doc5746/08-13-EffectiveFedTaxRates.pdf
---------------------------------
anne says...August 1, 2007.
""Who's Grabbing All the New Pie?
By Lawrence Mishel
A common metaphor for describing total national income is the image of a pie—when that pie is cut, some households get larger slices than others. How has that pie been divvied up in the current recovery?""

Notice that he doesn't mention that the entire pie has grown. it's disingenuous. Anyway, continuing..

""Economic growth in the current recovery has been very unbalanced, with all of the income growth from 2001 to 2005 (the latest available data) accruing to the upper 5% and, in particular, the upper 1% of households. In fact, the bottom 90% of households experienced a 4.2% decline in their market-based incomes, * epresenting a loss of $1,293 per household on average from 2001 to 2005 (the latest year data is available). Had income growth been shared equally during this recovery, the bottom 90% would have been $2,071 better off than they actually were in 2005 (with a $778 income gain, instead of a loss)....
Note
* Market-based income excludes government transfers.
Sources
Congressional Budget Office (2006, at http://www.cbo.gov/ftpdoc.cfm?index=7718&type=2)""

Ha! This report is laughable! If you go to the link you will see that this CBO report is for households with no children and no elderly people! Talk about selective presentation of data! This guy should have any grant money removed immediately. Didn't he think we would check?
------------------------------
Posted by: robertdfeinman | August 03, 2007 at 10:31 AM
STS says...
""Schumer's fear is that the hedgies will move out of NYC - either to NJ or simply offshore to Bermuda. Welcome to globalization - no leverage for regulators.""

And the laughable thing is that Krugman is incensed that these private equity hedgie types pay less of a tax rate than he does with his book revenues. No where is he incensed that our progressive tax system does the same thing! I, for one, am certainly incensed that we don't have a flat tax where everyone pays the same tax rate. That's the only fair thing to do.
-------------------------------------
RW says... ""There are two claims here, both of which are controversial and require support; i.e., "flocking" appears an inaccurate characterization given the total numbers and time spans involved and "better choice of doctors" may simply not be true; e.g., HMO's.""

You must be joking. A 40% enrollment increase in approx. 19 months and you think that 'flocking" is an inaccurate description and requires support? Wow.

""I do recall the Bush administration referring to slowing of the deficit as if it were a reduction so perhaps you were thinking of that?""

The only proper way to look at the deficit is as a percentage of GDP. Nominal (absolute) numbers are ridiculous. It must be looked at on a relative basis. This is what the Bush admin. was referring to and they are correct.

""In any case, and consistent with what appears to be the newly established gauge of proper authority, no citations from right-wing web sites allowed, please. And since I'm a progressive libertarian (what Ayn Rand would refer to as a filthy hippie as I recall but you can call me Al) I'm afraid 'right-wing' must include conservative outfits like Cato, sorry.""

Yeah, well, it took only 3 posts after yours for one of your compatriots to quote the CBBP, a definite left-wing organization. So, this forum seems permanently degraded.
------------------------------------------
anne says...
"NY Times:The plot against Social Security failed: President Bush’s attempt to privatize the system crashed and burned when the public realized what he was up to. "

Yes, now the young workers of today are stuck with quite meager returns on their SS deductions for many decades. How sad that 12% of their income will get a return of only 1 or 2% a year. Every time one of my teenage kids come home with a paycheck and complain about the high taxes taken out, I always say..."Vote Republican, George Bush tried to help you a little, but the Democrats blocked him. Remember that"
-------------------------------------
wjd123 says...
""However your insistence that "There will be absolutely no harm to Medicare recipients." is just flat out wrong. Without the choice of Medicare Advantage health care recipients will be paying higher co-payments. Many of them will see a doctor less often because of the extra cost. ""

And that is socialized medicine. Forced rationing either because of long wait times to see doctors, limited access to specialists, or difficulties with costs of copayments. As I said, I can't wait to see the GOP ad campaign highlighting the Democrats pushing the elderly in wheelchairs down the stairs. This is so the unemployed, welfare queen mom with 6 kids (6 different fathers) sits on the couch watching soaps and eating bon-bons (bought with food stamps) can have medical insurance. So much for personal responsibility. What's next, government paid homeowners insurance? All kids gotta have a roof, dontcha know!

[wjd123]

Anne,

I read the study from the Center on Budget and Policy Priorities. I've heard these arguments before except for the suggestion to extend the Medicare Savings Program. I agree with what they are suggesting. My problem is with what you said, "There will be absolutely no harm to Medicare recipients."

There are many people covered by Medicare that are "tweeners," too wealthy to qualify for Medicaid or the Medical Savings Programs but too poor to afford high medical co-payments. I'm one of them. I'm also on a fixed income. I do get a COLA adjustment to my social security every year but most of that is immediately eaten up by an increase in my Medicare premium.

When your income stays the same and everything else is going up--property taxes, utilities, etc.--you're in a bind, or should I say vise.

If I didn't have other peoples needs and wants to consider I could probably find some wiggle room. That's not the case. So I look for ways to save and saving on my medical bills is one of the first places I go. However, I don't want to save on them at the expense of my health, so Medicare Advantage suits me well.

If their co-payments go up or I have to change my doctors again I'll probably get a Medigap policy. That will be another $150 per month. The vise gets tighter. Tweeners get hurt, or potencially will get hurt, by the removal of the subsidies.

I also have a problem with Krugman's article about good Democrats and bad Democrats in this context.

He has been arguing for months that paying for children's health insurance by taking away the subsidies from the elderly is fair. Well it's not fair if good Democrats believe in progressive taxation. It amounts to taking from the needy to pay for the more needy. Seniors go into these Medicare Advantage programs to escape traditional Medicare's high co-payments which many can't afford.

The cost of programs effects the use of programs. SCHIP programs with high co-payments would have the same effect on parents as high co-payments have on Medicare users. Their children would be insured in a program their parents are reluctant to use because of costs.

It's usually the Republicans who conger up social programs from the realm of the unreal. Democrats are catching on to the art of claiming they are helping people by giving them programs they'll be reluctant to use.

For instance, before Medicare part D and increased subsidies to my Medicare Advantage insurer, I could get all the generic drugs I needed for a low co-payment. After Medicare part D I ended up falling into the donut hole and paying $450 more a year for the same drugs. Any new generic drugs recommended to me by my doctors would then (this isn't true this year for my insurance plan) cost me full price. Do you think I was more or less open to following my doctors suggestions?

Anne, I'm not against covering uninsured children my purpose here is to show that paying for it by cutting health subsidies isn't the no-brainer Krugman makes it out to be. It also seems to me that the criterion being use by Krugman in his article to separate good from bad Democrats is where they stand on progressive taxation. In which case Krugman is as bad a Democrat as Senator Schumer.

Perhaps I've exaggerated his criterion, if it's only that taxes should be fairer, than it's catch as catch can according to your definition of fair. That would scatter good and bad Democrats all over the ethical map, and Krugman would have to change the title of his article to "Good Democrats and Bad Democrats According to Me."

To me, good Democrats believe in health care for everyone paid for through progressive taxation--which also means no high co-payments. And since we know that single payer plans can deliver better results for less, that's the way to go.

[Dave M.]

wjd123 said..."And since we know that single payer plans can deliver better results for less, that's the way to go. "

We do? I disagree. Can you provide some evidence?. Like ABC's John Stossel, I can't think of any program that the government does better than private enterprise. He says..

""As I wrote in "Give Me a Break:" "If government would just back off, the private sector will provide many of the same services faster, better and cheaper." There are plenty of examples that should astound the socialists, like better private water works, ambulance services, roads, even air-traffic control.

Of course, I'm talking about a private sector that gets no privileges from the state. That doesn't describe our private sector now. For years government has bestowed all kinds of favors on special interests, from trade restrictions on foreign competitors to cash subsidies and cheap loans to corporate tax deductions for health insurance. People in and out of government have conspired to pollute the voluntary private sector with force and regimentation. That's why we have a mixed rather than a free economy.

Private competitors innovate or die. Government workers do what they did last year. That's why I want the private sector to provide my health care. Pursuit of profit will give us our best medicines and medical devices. I'll pay you $1,000 if you can name one thing government does more efficiently than the private sector.""
----------------------------------
wjd123, Stossel has $1,000 waiting for you if you can prove your claim!

[anne]

WJD,

Thank you, again. The specificity helps me further understand, and since the last thing I wish to have or anticipated having was a group of Medicare recipients being made to subsidize the cost of health care insurance for children I am much annoyed.

Then, your argument is that without the subsidy for Medicare Advantage insurers there will be fewer or most costly benefits for Medicare Advantage recipients and relying on Medicare will not compensate. I simply missed this possibility, as did the analyses I read.

[anne]

"You are missing the fact that the CBBP is a left-wing group that is filled with liberals who are overly sympathetic to the poor and never saw a social program they didn't like. It's biased analysis. Even the left-wing news of MSNBC admits the CBBP is left-wing...."

There is never sense in paying attention to a lunatic, so rant along, I could care less.

[memory]

Dave M.:

"So what? With our progressive tax system, these rich people are carrying the heavy load to fund our government."

Late breaking news: the tax system in America is not progressive. The income tax is, but other taxes, such as sales taxes, are regressive. Combine it all and you get a wash.

"wjd123 said..."And since we know that single payer plans can deliver better results for less, that's the way to go. "

We do? I disagree. Can you provide some evidence?."

Provide some evidence!? When did you start being interested in heath care? I know it was today; I just wondered what time today.

[anne]

WJD,

"For instance, before Medicare part D and increased subsidies to my Medicare Advantage insurer, I could get all the generic drugs I needed for a low co-payment. After Medicare part D I ended up falling into the donut hole and paying $450 more a year for the same drugs. Any new generic drugs recommended to me by my doctors would then (this isn't true this year for my insurance plan) cost me full price...."

Please explain how this relates to your example.

[robertdfeinman]

Some random anecdotal evidence. My wife and I have supplementary health insurance that covers what Medicare doesn't.

I don't know the practical details, but from our perspective we pay a nominal amount for office visits ($5) and $5-25 for drugs, depending on which class they are in.

The premium for this is about $370 each per month. This is about $9,000 per year. One can see why this is not an option for many people. I should add that this is a "group" rate since we are covered under a former employer.

The firm, Unitedhealth, had income of $19 billion and earnings of almost $1 billion in the last quarter. Their former CEO is under investigation for having stock options of $1.8 billion.

I don't know how people can fail to see that there is something wrong with this picture.

[anne]

WJD,

Well, I am convinced, as I was from the time you commented, that your problem is real for you and others. There are a class of Medicare recipients who could lose a cost benefit in Medicare Advantage if the subsidies to private insurers are ended. I would be much annoyed.

However, only portions of the subsidies are going to patient care now and there may as a result be no resulting cut in patient benefits, especially so if insurers can compete on a benefits basis alone for patients against Medicare. Can private insurers continue to compete; will they choose to compete? I do not know, but suspect the answer will be that at least some prime companies remain competitive since insurer profitability has been so high.

Though you are right, we do not know enough to guess at the dimensionss of any resulting problem. I do not believe Democrats in Congress would risk alienating any significant class of Medicare recipients. But, you are right to fret and complain and we need to know more.

Remember, nothing has happened so far and the House version of legislation for childrens' health will at the least be cut down.

[anne]

Robert Feinman

"Some random anecdotal evidence. supplementary health insurance that covers what Medicare doesn't.

"I don't know the practical details, but from our perspective we pay a nominal amount for office visits ($5) and $5-25 for drugs, depending on which class they are in.

"The premium for this is about $370 each per month."

Thank you, but is the cost per person or per couple? The cost quoted about was about $150 a month per person. Please be as specific as possible.

[anne]

Darn, above should read:

Robert Feinman -

"My wife and I have supplementary health insurance that covers what Medicare doesn't.

"I don't know the practical details, but from our perspective we pay a nominal amount for office visits ($5) and $5-25 for drugs, depending on which class they are in.

"The premium for this is about $370 each per month."

Premium per person or per couple? Please continue the specificity....

[wjd123]

Thank you, again. The specificity helps me further understand, and since the last thing I wish to have or anticipated having was a group of Medicare recipients being made to subsidize the cost of health care insurance for children I am much annoyed.

Then, your argument is that without the subsidy for Medicare Advantage insurers there will be fewer or most costly benefits for Medicare Advantage recipients and relying on Medicare will not compensate. I simply missed this possibility, as did the analyses I read.--Anne

Actually, Anne, I learned from one of your posts that the subsidies come out of general funds. It's the taxpayers who are doing the subsidizing. If I recall your post correctly around 40% of Medicare funds come from the general treasury.

I have two indications that the removal of subsidies to my insurance company will and won't hurt me. The first one is a letter from my insurer telling me that if Congress takes away the subsidies they might have to raise my co-payments. The other is that before Congress added new subsidies with the passage of Medicare Part D my insurance company was providing me with better services than they are today.

My argument is two fold. That "tweeners" like me with lots of medical expenses could be hurt by the removal of the subsidies if they have to pay higher co-payments which in turn will self-limit their medical care. The second is that this may be a fairer way of provide health insurance but it's not a more progressive way since taking away subsidies from Medicare Advantage will put the heaviest burden for increased child health insurance on "tweeners" with medical problems.

I'm just a little annoyed at the remark you made about no one on medicare getting hurt. I also feel that people in my position aren't getting a hearing by Krugman. I'm not anxious to be trampled underfoot as the crowd roars its approval for the method used to fund child health care.

I had a story to tell and I told it. Thanks for listening.

[anne]

Robert, I just do not understand the $370 monthly cost estimate.

[anne]

WJD,

I was wrong. so complain away because the subject is too important to be wrong about.

"I have two indications that the removal of subsidies to my insurance company will and won't hurt me. The first one is a letter from my insurer telling me that if Congress takes away the subsidies they might have to raise my co-payments. The other is that before Congress added new subsidies with the passage of Medicare Part D my insurance company was providing me with better services than they are today."

The first indication I understand completely, and knew of such letters but foolishly dismissed them. The second indication however makes no sense yet. Why would your insurer offer poorer services after new subsidies? What might such limiting of service after subsidies mean?

[anne]

http://krugman.page.nytimes.com/b/a/258293.htm

August 3, 2007

Locking Up Loopholes

Robert Helman, Tracy, Calif.: Thanks for your concise summary of the hedge fund income taxation issue, which also applies to P.E. entities.

Senator Schumer conveniently ignores a significant detail when he points to the alleged unfairness of allowing capital gains treatment of income to real estate and energy companies, but not to hedge funds. These real estate and energy companies referred to by Senator Schumer are entities regulated under the Investment Company Act of 1940. They are known as P.T.P.'s and M.L.P.'s, and they receive their special status under I.R.C. Sec. 7704c.

Hedge funds, on the other hand, are un-regulated and operate in ways that are forbidden to P.T.P.'s.

The argument over ordinary versus capital gain treatment of hedge fund earnings, while substantive, is a red herring,
What the hedge funds really want is the access to public markets that is enjoyed by regulated companies without the burden of regulation. They achieve this by burying a Sec. 7704c entity in an ingenious and complicated structure of interlocking general and limited partnerships and blocker corporations. Tax mavens will enjoy a study of the Blackstone I.P.O., a truly inspired document.

Those who are sympathetic to the arguments of Senator Schumer and others should ask themselves: who is the lender of last resort when private equity and hedge funds go public? Not the general partners, for they have little money in the venture and not the limited partners — their investment is limited to their invested capital. The taxpaying public, of course, is the lender of last resort, and we shouldn't award them an additional income tax bonus.

Paul Krugman: Well, that's another whole can of worms. I suspect that we'll find out fairly soon whether the lack of hedge fund regulation is a serious problem, as the fallout from rising risk premiums spreads.

John Walkmeyer, San Ramon, Calif.: Amen to your comments on both the children's health care legislation and Schumer's position on taxation of carried interest income. The best thing about the children's health care legislation is that maybe the Democrats have learned that they can stand up to the health insurers and not get killed as a result. That could come in handy as they tackle broader health care reform. As Dan Rather used to say, courage!

Your sales commission analogy to hedge fund manager earnings and so-called risk-taking was perfect. It's exactly the same thing, except that the hedge fund manager's reward ratio is much richer. One of my former bosses, Leo Hindery of cable industry fame, is now a private equity manager. He went on CNBC and made it very clear that his carried interest income should be taxed like ordinary income. Way to go Leo! It reminds me of why I was never so proud to be part of the cable industry as when he was CEO of the company I worked for.

Paul Krugman: I decided, for the column, to avoid the description that's closest to home: hedge fund managers are just like book authors who don't know how big their royalties will be. And I'd take a 15 percent tax rate on my royalties, with no Medicare tax, any day....

Douglas Durst, New York: The hedge fund loophole does not exist. If the hedge fund managers' carried-interest income is taxed as ordinary income, then there should be an offsetting expense to the hedge fund. This would result in almost no tax revenue gain to the government. The hedge fund tax only generates income by taxing the payment to the manager as income, but treating the cost to the fund as a capital expense. The result of this will be not more I.R.S. revenue, but a different method of rewarding hedge fund managers, and Congress will be able to use the phantom forecasted increase in revenue to increase the federal deficit.

Paul Krugman: No, you're misunderstanding the situation. Hedge fund managers are in effect given a 20 percent share of the fund, without actually making an investment; this grant of share is never taxed anywhere except to the extent that the fund's profits are taxed as a capital gain. The revenue gain from taxing as ordinary income is entirely real — trust me, the C.B.O. has gone through it, and it's really a loophole.

[wjd123]

Anne,

The $150 I quoted was for one person not two. My wife is retired but still covered by her union. She has no co-payments to worry about except a small one for drugs.

[wjd123]

Anne,

The sense of the second indicator is that my insurer did it before and they can do it again, provide the same level of services without raising my co-payments even if the subsidies are taken away.

[anne]

Ah, I understand the second indicator. The issue then becoming, if as I suspect the subsidies are continued, how to insure that subsidies benefit Medicare recipients. Each comment has further explained the mix of problems we are dealing with, and there we have an expecially important complaint in safeguarding delivery of services by audit.

The more of your fine criticism, the more what I have read is set in context and the more I am understanding.

[anne]

Notice that Paul Krugman added an important observation would otherwise have missed entirely. When we allow private equite managers to class income as capital gains, they also do not have to pay Medicare insurance on the income.

WJD also reminds us of the effectiveness of continuing union-employer supplemental health care coverage during Medicare years.

[robertdfeinman]

Anne:
Each of us pays $370. So that is $740 per month or almost $9000 per year. We do get to deduct that from our income tax (to the extent that total expenses exceed the threshold and if we itemize).

This is what gets me about Giulaini's latest "plan". He is going to offer up to a $16K tax deduction to pay for health insurance premiums. First, most of the people being squeezed probably don't even pay close to $16K in federal taxes. Second, the insurance companies will just raise their rates to soak up most of the subsidy. They price their services based upon what the market will bear.

Have the geniuses who advice these Republicans ever met a poor person? Do they have any idea of what their budgets are like? Do they not realize that tax breaks are only worth something to people in the higher brackets?

I'll try a stab at the answers. No, they have never met a poor person, unless they stay late at the office and the cleaning staff arrives. No, they have no idea how much these people earn. Yes, they know perfectly well their tax breaks are going to benefit their base and not the general public.

[anne]

Robert Feinman:

"Each of us pays $370. So that is $740 per month or almost $9000 per year. We do get to deduct that from our income tax (to the extent that total expenses exceed the threshold and if we itemize)."

I am sure you are right, but this level of cost to supplement Medicare makes no sense to me.

[anne]

http://www.nytimes.com/2007/08/01/us/politics/01giuliani.html

August 1, 2007

Giuliani Seeks to Transform U.S. Health Care Coverage
By MARC SANTORA

ROCHESTER, N.H. — Rudolph W. Giuliani on Tuesday called for transforming the way health care coverage is provided in the United States, advocating a voluntary move from the current employer-based system to one that would grant substantial tax benefits to people who buy their own insurance.

The proposals by Mr. Giuliani, a Republican presidential candidate, set the stage for a contentious battle with the Democratic candidates over health care, a defining domestic issue this campaign season.

In his speech here, he excoriated Democrats for advocating a "socialist" solution to solving the problem of the nation's 44.8 million uninsured, saying the party's candidates encouraged a "nanny government" by proposing a greater government role in health care.

Instead, he proposed tax exemptions of up to $15,000 per family, allowing individuals to direct that money toward the purchase of health insurance and other medical spending. He also said he opposed any government mandates that would require people or businesses to buy insurance, which is central to the universal health care plan neighboring Massachusetts passed in April 2006....

[Barry]

Dave M, quoting Heritage and the NR is pretty laughable.

[anne]

http://www.nytimes.com/2007/08/04/opinion/l04bridge.html

Preventing the Next Bridge Collapse

To the Editor:

“Stunned Victim Turns Hero in Busful of Children”:

What a remarkable man young Jeremy Hernandez is! But my heart almost stopped when I read the following sentence:

“He had hoped to become an auto mechanic, he said, but dropped out of a training program at Christmastime because he could no longer afford the tuition.”

What has become of this country when bridges collapse from neglect and education is too expensive for the working poor? Think of how we could have spent the money for this hideous war.

Wendy Moffat
Carlisle, Pa., Aug. 3, 2007

[Lafayette]

realpc: It is not the federal government's job to be our parent.

Wrong.

Would you say that about defense? About firemen, police work (both national and local)? Our judiciary? How about the FDA vetting medicines?

Then why not health care or education or job training? Are they less indispensable? Are they less of requirement for a decent standard of living?

Answer the question.

[Lafayette]

Santora: The proposals by Mr. Giuliani, a Republican presidential candidate, set the stage for a contentious battle with the Democratic candidates over health care, a defining domestic issue this campaign season.

How so?

We will get a choice between Tweedle Dum and Tweedle Dee. No more, no less.

The problem with health care services WILL NOT BE ADDRESSED - that of their cost. For as long as we depend upon private practice, unregulated practitioners, we will have the same exorbitantly priced health care services - that you will pay for out of either general pricing of consumer products/services or by means of increased taxation.

[Lafayette]

rdf: They price their services based upon what the market will bear.

The costs are unbearable presently and there are NO present alternatives that will change it. (Mark my words, because this is GOING to happen. We can return to this discussion in five years time - when not much will have changed given the present course of the political debate.)

Extending coverage to children and uncovered workers is a palliative measure. We will still be saddled with a national health care service that is substandard and very costly - a burden on all of us.

The cost of services is to be found not in "administrative costs" (which could be automated electronically in the blink of an eye), but inherent manpower costs - that of the practitioners (nursers, doctors, aids) and the means employed (hi-tech equipment and costly pharmaceuticals).

If otherwise, do tell us by what magic the outcome predicted above will not be the case. Please, please.

[Lafayette]

rpc: But maybe there are alternatives to shoveling yet more money and power into the corrupt federal government, and drug companies, and FDA.

There are. A full-frontal assault on the hegemony of the AMA and its K-street acolytes.

If we could embark upon an ambitious program to get to the moon (the return of which has been zilch to most of us) funded fully by the Federal government, why not a national program for decent, affordable health care? Why limit Medicare to just the aged? Is that fair? Is it even constitutional?

These are all unanswered questions because they go to the heart of the problem. Which is Health Care institutionalized long ago by the practioners' most important lobby in Washington - the American Medical Association and private insurance.

All this was done in Washington right under our noses. So, undo it. When something is this broke, fixing it will get us nowhere.

NB: Whilst thinking about subsidized health care, why not also think about every damn time we have a national ambition, that same ambition is realized by some mandate to private enterprise to realize it. And, we pay through the nose for it.

[wjd123]

Anne,

I've been doing some research since I talked to my neighbor two weeks ago when he gave me the $150 quote on his supplemental health insurance policy. It wasn't a Medigap policy just a supplementary policy to his Oxford insurance. In order to get a Medigap policy you have to be in traditional Medicare and not one of the Medicare Advantage programs.

Medigap policies, yes that's policies, range from A through L. If you want specifics you will have to ask a specific question about which letter of the alphabet you're talking about. Even then you will have to call an insurance company to get a price quote.

If you want to see how complicated getting a Medigap policy can be, go here:

http://www.medicare.gov/Publications/Pubs/pdf/02110_LE.pdf

PS. I'd explain to you how my wife's union health insurance works but I'd probably get it wrong. You can never presume anything when it comes to health insurance. You can suspect that the workings will be byzantine.

[Betsy L. Angert]

Dear Mark . . .

This editorial brings so much to mind. Each day I cry as I contemplate Congressional doings. Even as I reflect on the recent passage of the children's health insurance Bill, I am pained. The Commander-In-Chief plans to veto the measure; funds are better spent on military might and telephone trolling. While, it seems there are enough votes to overturn the President's ruling, for me, this quarrel speaks to how we define society.

Thomas Paine hoped to enlighten American citizens centuries ago. In the scholar's desire to explain the intent of government, he compared and contrasted the rationale for a democratic government, while honoring the role of society. I offer a discussion of this topic as it relates to our youngest citizens. I invite you to share your thoughts on, Congress and Bush Clash; Children's Health and the Commonwealth.

As I consider the hedge fund folly, I am reminded of a moment observed at the Yearly Kos Democratic debate this weekend. It seemed Hillary Clinton was almost stymied when asked about her acceptance of lobbyist money. Senator Clinton skillfully danced around an attempt to take her to task.

During the same discussion, it was revealed another candidate, proud of his decision not to take monies from paid petitioners, does indeed accept donations from hedge funds.

I contemplate the current Congress, and I see no great changes. For me, there is no reason to rejoice. I was not overjoyed when we voted for more Democrats in November. I expected nothing and it appears that is what we got.

The vote days ago, authorizing broader authority for wiretapping, I think awful. Congress concludes George W. Bush and Attorney General Alberto Gonzales need or deserve more power. Laws are imposed that force citizens to forfeit their Civil Rights.

Krugman ponders; will we the people think Democrats are different, better, or worse. My thought is no matter the political Party, Americans must recall we are a society. Therefore, we must work with our common interests in mind.

Betsy L. Angert
BeThink.org

[Dave M.]

anne says...”” There is never sense in paying attention to a lunatic, so rant along, I could care less.””

Once more you engage in ad hominem attacks instead of debating my facts on the issues. Since you can’t dispute my facts you resort to name calling. How old are you? Lol.
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memory says... “”Late breaking news: the tax system in America is not progressive. The income tax is, but other taxes, such as sales taxes, are regressive. Combine it all and you get a wash.””

Care to provide some evidence for that claim? The sales tax is regressive? Huh? Care to explain that? Wealthy people get a break on sales taxes? It makes no sense, because it’s flat, not regressive. But anyway, let me correct your errors here, you admit the income tax part is progressive, but the sales tax is flat, (not regressive) and that combination, does not make a wash. BTW, don’t rich people have more disposable income that incurs taxes?
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anne says..””.Remember, nothing has happened so far and the House version of legislation for childrens' health will at the least be cut down.””

Be thankful that George Bush will veto this horrible piece of legislation. He, ironically, will be preventing the democrats from pushing the elderly in wheelchairs down the stairs! Not to many years after they accused him of doing so! Gotta love the neo-socialist democrats!
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memory says...””Provide some evidence!? When did you start being interested in heath care? I know it was today; I just wondered what time today.””

You seem to be another liberal who engages in insults because you have no facts to debate with. Surely you can do better.
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robertdfeinman says...”” The firm, Unitedhealth, had income of $19 billion and earnings of almost $1 billion in the last quarter. Their former CEO is under investigation for having stock options of $1.8 billion. I don't know how people can fail to see that there is something wrong with this picture.””

It would help if you learned the facts. He was the CEO since 1989. He grew the company from 400 million in sales to over 71 billion. The stock price went from 30 cents to 50 bucks. His compensation in the five years 2001-2005 was $341 million. That’s a lot less than most entertainers like Oprah make. Just like in pro sports, good talent is hard to find!
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anne says..””I was wrong. so complain away because the subject is too important to be wrong about.””

If you listen to conservatives, you just might learn something. But you seem to get apoplectic immediately. You should work on that.
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robertdfeinman says... “”This is what gets me about Giulaini's latest "plan". He is going to offer up to a $16K tax deduction to pay for health insurance premiums. First, most of the people being squeezed probably don't even pay close to $16K in federal taxes.””

Ahem, it’s a deduction, not a credit. Learning the difference will be helpful to your conversational expertise.

“”Have the geniuses who advice these Republicans ever met a poor person? Do they have any idea of what their budgets are like? Do they not realize that tax breaks are only worth something to people in the higher brackets? No, they have never met a poor person, unless they stay late at the office and the cleaning staff arrives. No, they have no idea how much these people earn. Yes, they know perfectly well their tax breaks are going to benefit their base and not the general public””

Nice to see you admit that the poor don’t pay any taxes. Too bad that’s not entirely what Rudy meant. He also meant people who are middle class and not just “cleaning staff”
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Barry says...
“”Dave M, quoting Heritage and the NR is pretty laughable.””

Well, if you have any facts to dispute what they say, I’m all ears. Until then, you don’t seem to have anything intelligent to say about the subject at hand.