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Posted by on Aug 23, 2009 in At TMV, Breaking News, Economy, Health, Politics, Society | 17 comments

It’s More Than $2, Jack, And That’s A Fact

If you thought seniors fighting phantom cuts in their Medicare benefits at those town hall meetings were angry, wait until the first of the year when it dawns on all of them they’re getting no cost of living increase for the next two years. In fact, six million of Social Security’s 50 million recipients will suffer a pay cut and all will pay more for drugs.

I say “phantom” cuts because all of the health reform proposals in Congress are no where near being enacted into law. In stead, it has been a propaganda war between special interests in the health industry and opposing political parties in which the dominant argument is stupidly focused on creation of government “death squads” to euthanize the elderly. Fostering fear is the Obama administration’s proposal to cut billions of dollars in Medicare costs as “savings” without spelling out where these cuts will occur. Some seniors translate that as cuts in their benefits.

January 1, 2010, will be the first time since 1975 Social Security beneficiaries will not receive a cost of living (COLA) adjustment. By law, the government cannot decrease benefits. In the past, COLA increases oftentimes were offset by increases in Medicare Part B medical premiums deducted from Social Security checks. The result was seniors annually falling behind because of the spiraling rise in medical bills outdistancing less inflationary sectors of the economy.

However, the law does not prevent the increase in premiums for Medicare Part D drug subsidies.

There are about six million seniors whose Medicare Part D drug subsidy program is also deducted from their Social Security checks. It is these who would face an average increase of $2 per month from their current $28/mo drug premiums although the amount varies by plan and the private insurance carrier administering the program for the federal government.

On the surface, this doesn’t appear to be a big deal. But it is to both seniors and the nation’s taxpayers.

Estimates vary but the consensus is about 25% of the 50 million seniors live in retirement with fixed income totally reliant upon their Social Security checks which average nationally at about $1,150/mo. The remaining 75% have seen their retirement and pension plans reduced by at least half because of the recession. Unless you live in your own mortgage-free home, there’s not much playing around money for any of them.

For the government, increasing Medicare premiums excluding Part D without a compensating COLA is forbidden by law. That means the government would absorb billions of more dollars annually adding to the trillion dollar deficit to make up the difference in which the premium increase would have covered.

I can only address the situation from the perspective of a single person living solely on Social Security and meeting eligibility standards for Medi-Caid and rental assistance through the Housing and Urban Development agency.

Medi-Cal is broke and no longer pays my $96/mo Medicare premium. I do. The government subsidizes Health Net to pick up all medical expenses. I pay a nominal $3.10 for each 30-day drug prescription. Every year Health Net changes the rules of what it will and will not cover. I’m a slave to their whims and am waiting with anticipation of what roadblock they will set for 2010. Last year it was no reimbursement for hospital costs. This year hospitalization was covered but should I need an ambulance to get there I had to pay $50.

Already, the Riverside County (California) Housing Authority which administers HUD’s rental assistance program notified me that beginning Oct. 1 I had to pay $50/mo. more for my apartment rent. I suppose that will make a major difference in HUD’s $18.2 billion budget helping two million families in 2010.

So, when you hear us gray panthers (we no longer are gender biased) roar, it’s more than a measly $2 increase in our drug premiums. It is more like being nickled and dimed to death.
Sources:

MSNBC

Politics & Poppycock

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Copyright 2009 The Moderate Voice
  • Leonidas

    ” I say “phantom” cuts because all of the health reform proposals in Congress are no where near being enacted into law.”

    So….

    Is the public to wait until something has become law or is being voted one before they express their opposition to ideas put forth by leaders in government?

    Hmmm…. should they not oppose the “Phantom” effort to overturn Roe vs. Wade”? the “Phantom” effort to make burning the flag illegal? the “Phamtom” effort to pass a Constitutional Amendment outlawing gay marriage. “Phantom” efforts to revoke 2nd Amendment rights, etc.

    I just have to laugh at your use of “Phantom”

  • Silhouette

    I imagine once the legitimate and accountable public system is in place, the slop we used to waste on ER-visits for the 50 million uninsured will help offset things along with taxes on harmful substances and tiny monthly premiums.

    Look, we’re all our brother’s keepers. We’re all in this together..
    ******

    “January 1, 2010, will be the first time since 1975 Social Security beneficiaries will not receive a cost of living (COLA) adjustment. By law, the government cannot decrease benefits”
    *****
    What, no raise when Uncle Sam is bankrupt? Shocker! Time to fix the system. Time to rein it in and put it above board.

  • Davebo

    Don’t you need to have inflation for a COLA adjustment?

    I feel your pain, but it’s pretty minimal compared to the reduction in my income during this recession. And began paying FICA right after Reagan jacked up the payroll deduction rate, yet it seems unlikely I’ll get the level of benefits, adjusted for inflation you enjoy.

    Which is why, no matter how bad business is, I save for retirement ad why my house will be paid off decades before I retire.

    And keep in mind, I have to pay both the employee and employer portions.

  • Father_Time

    Well if the Republicans had their way there would be no Social Security, no Medicare or Medicaid.
    Social-Darwinism would reign and if you had not the will or the means to prepare for your elderly years, you would die in the street somewhere.

    • Don Quijote

      Social-Darwinism would reign and if you had not the will or the means to prepare for your elderly years, you would die in the street somewhere.

      Just the way the good lord intended.

  • Leonidas

    ” the legitimate and accountable public system is in place”

    *grin*

    *smirk*

    *chuckle*

    *snort*

    *laugh*

    *chortle*

    *guffaw*

    *ROTFLMAO*

  • Davebo

    Anyone remember that 80’s movie “Better off Dead”?

    I want my two dollars! 😉

  • jkremmers

    Davebo,
    You are to be commended for doing the right thing, making the right decisions and planning for your retirement without being a burden on society. As it so happened, I embarked on the same trail with the same lofty goals as you and millions of others. Unfortunately the best laid plans sometime run a foul. Stuff such as a former trusted business partner fraudulently stealing $50,000 of my money and fleeing to Mexico. Stuff such as half of my one-lump retirement account from the newspaper lost in the dot.com busted bubble and the other half invested in Intel in which I cashed in at $26/share after buying at $43 because I needed the money desperately.I live with my decisions and have no regrets. My situation is a constant challenge and do not carry an ounce of guilt since I paid into the government system for Social Security and state income taxes for 60 years and Medicare since its inception until two years ago.

    People like you should not pretend to be so smug. As the license sticker on the car bumper says: “Shit Happens.”

  • GeorgeSorwell

    There probably won’t be a COLA because there has been negative inflation. There has been negative inflation because the economy is in rough shape. Because the economy is in rough shape, a lot of chickens are coming home to roost.

    One of them is the fact that government spending is popular. Another is that paying taxes is unpopular.

    These have been reconciled, if you want to call it that, by running up a huge budget deficit.

    The government programs seniors depend on don’t get funded by magic. They get funded by taxes. Social Security and Medicare have been underfunded for a generation. So, in spite of the fact that people have “paid into” these systems for years, they didn’t pay enough. That’s a simple fact buried under a culture-wide denial of reality. Maybe the economy will recover and we can slip painlessly back into denial. Or maybe we’re going to face up to reality.

    Or maybe everyone will just be angry.

    I’m sure things are going to be tough for a lot of seniors, like Jerry. But things are already tough for people like Davebo.

  • DLS

    [sigh]

    The Dems’ health care is more problem-ridden than anything else they’ve done badly and wrong so far.

    Cuts? What’s the change in GDP? Imagine if there were substantial deflation.

  • ksb43

    “So, in spite of the fact that people have “paid into” these systems for years, they didn’t pay enough.”

    And in the end, this is the key truth that no one receiving these benefits likes to admit. Yes, you paid into the system, but the reality is that the benefits you will receive through the end of your life will be many, many times that which you paid in. This is irrespective of inflation, by the way. So, essentially, Generation X and Millennials will be broken suppporting the medical and SS benefits the Baby Boomers voted for themselves, while having little to no hope of being on the receiving end of the same largess.

    This is generational theft, on a breathtaking scale. So to see the number of gray-haired angry people protesting health care reform (ie “I’ve got mine, so suck on it”), repeating the most scurrilous lies and nonsense fed to them by talk radio, is infinitely despicable.

  • DLS

    Jerry,

    Not only has the GDP not exhibited stellar growth (one of the things people look at when assessing our ability to pay for various things, like entitlements or health care beyond “mere” Medicare), but what has been the experience with our economy recently? Cost of living has (consumer prices) have held steady or dropped (as anyone in the real world encountering so many various kinds of sales businesses now are holding, or in other ways, can recall in an instant).

    Will it make seniors upset? Perhaps. But they’re upset already, and of course, it’s not for what you wrongly call “phantom” [misc] things. Swiping $500 billion from Medicare affects seniors directly, obviously (to those who are awake and aware, at least). Not only that, it additionally adds concerns by people because of course that won’t be enough to pay for the current crazy health care effort, nor will the Dems and their lackeys convince anyone intelligent that the difference will be made up by blithe references (and little more than that) to “removing waste, fraud, and abuse” from Medicare and precluding the same in whatever other health care by Washington has a chance of being enacted. Only fools have faith in the Dems. What does it say about the poor-quality attacks on people who know better than that?

  • DLS

    “And in the end, this is the key truth that no one receiving these benefits likes to admit”

    I’ve tried to tell people, including people on this site, for ages what the Trustees of Social Security and Medicare have been saying. Not only are the programs unsustainable, to pay for them will require more out of GDP (and with the rest of the federal government, more still) than we have ever paid before. (The resemblence to Europe that makes the Blissful Idiots reluctant to be concerned, or even to have faith in the future because of such a spector, ignorantly or otherwise neglect that Europe’s problems are even worse, and they have already given people in government nightmares, while even the gentlest hints at anything resembling gestures of reform have been met by ignorant and childish Europeans with work stoppages and other tantrums of denial.)

    What’s ignored or impossible for these people to grasp also includes the nature of the “Trust Funds” and to bonds that of themselves have no value, but must be paid for by revenues shifted from other expenses, more taxes, or more borrowing, long before the “Trust Funds” are exhausted, but as soon as the bonds begin to be redeemed. (I guess if they feel Obama and other Dems’ recklessness is okay, it would explain why they don’t seem to acknowledge, much less be concerned about, this.) Once surpluses that still exist with some of these entitlements peak and then begin to decline, it should make reform imperative.

    The admonitions fall on deaf ears, blind eyes, or on minds unable or unwilling to face the reality.

    I wonder if these blind-and-deaf-or-worse people ever believed or still believe Obama’s entitlement reform vow.

  • DLS

    “There probably won’t be a COLA because there has been negative inflation. […]”

    Thanks, George. Refreshingly welcome stuff on here, for a Change [tm].

  • DLS

    “when you hear us gray panthers (we no longer are gender biased) roar”

    Also, as I’ve tried to tell people for age, just wait until 20-30 years from now. The vast increase in the number of aged doesn’t involve only the vast increase in federal expenditures for Social Security (and Medicare), but a vast increase in the number of beneficiaries. Cut or merely restrict the growth in the cost of their benefits, impose already-long-overdue-today upward revisions in the retirement age, etc., and just wait for the roaring. But, silly people can’t expect things to continue as they are now, much less get more generous or even lavish. For also we will be treated to the increased roaring of the taxpayers.

    And the politicians will be forced to strike a compromise or “balance” between the roaring of the retired and the roaring of the taxpayers. The level of roaring will be sought that’s approximately equal from each side, that is. This is what I have referred to as the dark (cynical) future “equilibrium” phenomenon.

  • DLS

    “Look, we’re all our brother’s keepers. We’re all in this together..”

    [snicker]

    Obama said this. Obama also said that this health care zaniness (much worse, actually) was a “core moral and ethical issue,” too.

    This, while he oh-so-ironically referred to “demagoguery” and disparaged it.

    * * *

    “I paid into the system…”

    So did Bernie Madoff’s clients. Similar kind of scheme, too.

    * * *

    “This is generational theft, on a breathtaking scale.”

    When I lived in Seattle, some of us would routinely discuss matters like this (unsustainable pay-as-you-go entitlements included) and the academic-oriented guy (loquacious, with vocabulary sized and tailored to match) who was still firmly in the real world (real debate — “Goddammit, the gloves come off!”) had a thing or two to say about this generational theft.

    Namely, that one feature of the reckoning to come might indeed be default on federal debt by Gen X or their successors: “They _should_, goddammit! [“quoting” them:] ‘_We_ didn’t design those programs, and _we_ didn’t decide to spend so recklessly and excessively!’ …”

  • GeorgeSorwell

    I’m not a proponent of tiresome moralizing–not about torture, not about health care, not about “generational theft”.

    I’m for solving problems.

    But first, you’ve got to admit what they are.

    We have infrastructure problems that, if resolved, would improve our productivity. The same with our antiquated, opaque health care system. (It’s hard for me to believe that the rest of the industrialized world, where every other country has rationalized its health care, doesn’t have a significant competitive advantage over us.) Our financial system is long overdue for reform.

    I’m not in favor of leaving the millions of people like Jerry to choose between food and medicine. But the problems that led to this point didn’t just happen overnight.

    A lot of chickens are coming home to roost.

    One of them is the fact that government spending is popular. Another is that paying taxes is unpopular.

    These have been reconciled, if you want to call it that, by running up a huge budget deficit.

    There is no easy way out.

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