Should resources be reallocated from retirees to those in greater need?

[WhoWee]

I'm investing my 401k conservatively and expect it to pay me back several times what I paid into it. And all without forcing my kids and yours to pay for it! Depends on the reform, of course. We could always just expand Medicare to cover everyone, with the same flaws...

I'm pretty sure I've actually heard that suggested.

Part of the PPACA requires health care be "affordable" - yet the mandates increase cost. In 2014 the maximum deductibles will be $2,000 individual and $4,000 family - this will ABSOLUTELY increase premiums.

I'll oversimplify to make a point. If a mandated plan costs $20,000 per year (family of 4) and the employee contribution is limited to $1,500 - the company will either pay $18,500 or dump the person onto something comparable to the Government's GI (guarantee issue) plan.

https://www.pcip.gov/

There is a great deal of uncertainty amongst employers.

 

[ParticleGrl]

You're reading the statistics backwards. The fact that they don't take into account life expectancy biases them in your favor, not mine: Even though the poor don't live as long, they still get more back than the rich.

The way they calculate the lifetime benefit was to take the yearly benefit and multiply by the expected number of years, assuming everyone lived the same average life span. Because they didn't factor in the skew life-expectancy, their total benefit numbers are wrong. Hence, the lifetime benefits they calculate are high for the lower incomes and low for the upper incomes.

As my stats showed, the rich get less money out of SS than they paid in. If their 401k's did that, they'd shoot their accountants.

Keep in mind that the stock market can go decades at a time with no inflation-adjusted growth. Add in broker fees, and you are losing money. If you started pumping money into a stock portfolio in the mid 60s and started drawing down in the late 80s, odds are roughly half that you'd have less than you put in (not including said broker fees). The 80s and 90s saw rapid growth, but a lot of that was fueled by 401k money driving up stock prices (look at the steady increase in P/E ratios) . Also, a growing population is in part responsible for growing capital values. As the population starts to decline, so should the stock of capital.

I'm investing my 401k conservatively and expect it to pay me back several times what I paid into it.

I wouldn't bank on that- again, the market can go decades at a time with little growth above inflation. See 1960 to about 1985, or 1995-now. Much of the equity market growth from the mid 80s on was the influx of 401k money, but that's going to be pulled out in the coming decades. This, of course, assumes its impossible to beat the market, but I think its fair to assume for these purposes. The '95 to now period is actually worse than the 60-85 because dividends have become more rare.

 

[WhoWee]

The way they calculate the lifetime benefit was to take the yearly benefit and multiply by the expected number of years, assuming everyone lived the same average life span. Because they didn't factor in the skew life-expectancy, their total benefit numbers are wrong. Hence, the lifetime benefits they calculate are high for the lower incomes and low for the upper incomes.

Aren't poor people more likely to become beneficiaries at a younger age?

 

[klimatos]

You need to reread. I wasn't talking about people who made the promises, but people who had nothing to do with them, but are forced to pay for them nonetheless.

No need to be insulting, Russ. I read perfectly well. My point was and is that the "people who had nothing to do with them [the promisers]" are still bound by those promises. That is the essence of representative government.

Else, why should I pay for wars that I did not vote to start and do not agree with?

 

[klimatos]

4. Unions give massive financial and political support to their favourite politicians.

It's called democracy. You fail to mention that management also gives massive financial and political support to their favorite politicians. Why don't you object to that?

 

[WhoWee]

No need to be insulting, Russ. I read perfectly well. My point was and is that the "people who had nothing to do with them [the promisers]" are still bound by those promises. That is the essence of representative government.

Else, why should I pay for wars that I did not vote to start and do not agree with?

Again, the solution is simple - the politicians lied to us!

In the case of war - the money is already spent - now we might ask the liberated country to pay us back (regardless of what the liars told them).

In the case of entitlements - sorry - the politicians lied to get your vote - cuts are essential.

Is there anyone that won't understand the concept that politicians lied to them - made promises that won't or can't be kept?

 

[skippy1729]

It's called democracy. You fail to mention that management also gives massive financial and political support to their favorite politicians. Why don't you object to that?

That is not the point. The point is that they selectively give money to the representatives who negotiate the terms of their contracts.

Although it is slightly off topic, many people object to being forced to join a union to keep their job and have their dues given to politicians that they personally oppose.

Skippy

PS When dealing with public employees, "management" is the politicians themselves! So your statement makes no logical sense.

 

[klimatos]

1) Again, the solution is simple - the politicians lied to us!

2) In the case of war - the money is already spent - now we might ask the liberated country to pay us back (regardless of what the liars told them).

3) In the case of entitlements - sorry - the politicians lied to get your vote - cuts are essential.

4) Is there anyone that won't understand the concept that politicians lied to them - made promises that won't or can't be kept?

1) Whether politicians made promises that we don't want to keep is irrelevant. They made those promises as our legal representatives. those promises were accepted in good faith, and we are honor bound to honor them. If this means raising taxes, so be it!

2) The money is not already spent. Many of the bills have not yet come due. When they do, we can simply tell the defense industries that they have to take eighty cents on the dollar. If politicians can lie to labor, they can lie to industry.

3) Cuts are not essential. We can simply raise taxes.

4) Same answer as 1).

 

[klimatos]

1) That is not the point. The point is that they selectively give money to the representatives who negotiate the terms of their contracts.

2) Although it is slightly off topic, many people object to being forced to join a union to keep their job and have their dues given to politicians that they personally oppose.

3) When dealing with public employees, "management" is the politicians themselves! So your statement makes no logical sense.

Corporate management also gives money to the representatives who negotiate their contracts. If it is wrong for labor to do so, it is wrong for management to do so.

2) Many shareholders also object to their potential profits being given to politicians they personally despise. Perhaps we should make all group (as opposed to individual) political donations illegal.

3) You know good and well that I was referring to corporate management.

 

[BobG]

Again, the solution is simple - the politicians lied to us!

In the case of war - the money is already spent - now we might ask the liberated country to pay us back (regardless of what the liars told them).

In the case of entitlements - sorry - the politicians lied to get your vote - cuts are essential.

Is there anyone that won't understand the concept that politicians lied to them - made promises that won't or can't be kept?

Anyone that financed the nation's debt by buying treasury bonds.

Following that line of thought, would it be better to default on promises to non-voters (foreign debt holders) or on promises to voters (domestic bond holders and social security recipients)?

That's pretty much the dilemma Greece was facing by considering putting the proposed recovery plan up to a vote. There was a real possibility that voters would choose to see creditors (and those bank investors) go bankrupt than to see their own finances hurt.

 

[WhoWee]

3) Cuts are not essential. We can simply raise taxes.

Do you mean raise everyone's taxes or only a small minority group of persons that can't defend themselves (with votes)? Don't you think it's high time we call this what it is - discrimination?

The reason I ask this question is tax hikes on the 47% of the population that don't pay federal income tax now - would largely be a cut in benefits provided under re-distributive programs.

 

[BobG]

Do you mean raise everyone's taxes or only a small minority group of persons that can't defend themselves (with votes)? Don't you think it's high time we call this what it is - discrimination?

The reason I ask this question is tax hikes on the 47% of the population that don't pay federal income tax now - would largely be a cut in benefits provided under re-distributive programs.

There was a time I was pretty sure you were a conservative. Now you go shocking me by urging tax hikes for as many people as possible in order to protect minorities!

 

[lostcauses10x]

Unequal, is the term that should be being used in this thread,

Other than that it is simple: Don't make contracts that can not be held.

 

[WhoWee]

There was a time I was pretty sure you were a conservative. Now you go shocking me by urging tax hikes for as many people as possible in order to protect minorities!

What else can you call the 1% - but a minority?

 

[WhoWee]

Unequal, is the term that should be being used in this thread,

Other than that it is simple: Don't make contracts that can not be held.

"Unequal" is the topic of conversation best held at work - IMO. Tell your employer there is inequality between the owners wage and yours - I'm sure it will be a fun and informative debate.

 

[ThomasT]

Did the retirees pay into the system, or was their retirement and health care part of their work/retirement compensation? If so, then companies and government must honor those promises, period. Yanking it away because it doesn't seem fair would be the height of unfairness to those to whom it was promised.

I think we're heading toward retirees getting compensated according to need. That is, eventually the SS retirement fund will be administered on the basis of means testing, as will medicare and medicaid.

 

[WhoWee]

I think we're heading toward retirees getting compensated according to need. That is, eventually the SS retirement fund will be administered on the basis of means testing, as will medicare and medicaid.

Social Security, Medicare, and Medicaid are already coordinated based on need. The SS program LIS (Low Income Subsidy) helps medicare beneficiaries with Part D. Medicare beneficiaries are further qualified as SLMB, QMB (and others) to receive additional assistance. A dual eligible person qualifies financially for both Medicare and Medicaid.

 

[mheslep]

Well, the following states have a http://www.usgovernmentspending.com/state_debt_rank": Colorado, Washington, Alaska, Rhode Island, South Carolina, Pennsylvania, New York, Kentucky and Massachusetts. Wanna kick them too?...

Those debt/GDP numbers don't reflect i) the outlandish pension guarantees made to California government employees which will cause future debt increases, shortly, ii) that California is already maxed out on its tax rates compared to most other states, so that it can not raise taxes to pay those pensions.

 

[mheslep]

The OP raises a point about fairness and obligations of government, specifically on health care benefits. Medicare beneficiaries will receive anywhere from a 3:1 to 5:1 payout, depending on wage level over what they paid in as of 2030. Is this not clear to all? The more appropriate question is should benefits be immediately be cut back to 1:1 after inflation?

 

[ParticleGrl]

Medicare beneficiaries will receive anywhere from a 3:1 to 5:1 payout, depending on wage level over what they paid in as of 2030. Is this not clear to all? The more appropriate question is should benefits be immediately be cut back to 1:1 after inflation?

So the question becomes- do we bankrupt the government or bankrupt private citizens with healthcare costs?

 

[mheslep]

So the question becomes- do we bankrupt the government or bankrupt private citizens with healthcare costs?

I don't accept the premise, but in any case one can only start to have the discussion after putting to rest the notion that everyone is "entitled" to 3 or 5:1 more than they paid into Medicare.

 

[DoggerDan]

So the question becomes- do we bankrupt the government or bankrupt private citizens with healthcare costs?

I've never really understood the high cost of healthcare. These days I see a doctor about once a year, mostly for various screenings. In previous years it was sometimes more, sometimes less. I've had a couple of things were I needed ER treatment, including a wicked inner ear infection caused by a perforated eardrum, a wrenched back, a scratched cornea, and some intestinal somethingorother that resolved itself despite the doc scratching his head bald trying to figure it out. Had a couple of warts removed as a kid. When I started gaining weight, I changed the foods I ate and exercised more.

I keep pretty good records, and the total cost, in today's dollars, comes to less than $15,000. That's about $283 a year, including the few times I've been on medications.

Why is it that healthy families of 3 are paying $10,000 a year in medical insurance costs? Are their doctors performing unnecessary tests or procedures? Do their insurance companies think their doctors might perform unnecessary tests or procedures?

The only people among my circle of friends I hear mentioning doctors' visits with any regularity are seriously unhealthy. They drink too much, smoke, fail to exercise, eat badly, and usually in combination. That's not to say everyone who's unhealthy is a self-fulfilling prophecy. Given what I see on the street, however, I'd say most suffer from preventable illnesses or complications thereof.

I am not immune, either. A couple of months ago, I suffered from a mild ischemic stroke, characterized by an impairment in my vision that grew rapidly over a three minute period before I called my doctor. He knows I'm a heavy clotter (I don't bruise very easily at all), so he said, "Chew and aspirin and stay on the line with my nurse." Thirty minutes later it was gone and there were no other symptoms, so he said, "Begin taking a baby aspirin a day and come see me in the morning." I had an annual check-up due in two weeks, so two weeks later he pronounced me healthy as a horse, but said while my diet is fine, I needed to get back into regular i.e. daily cardio.

So, I did. Cost of the visit and all tests: $250. Hopefully, that'll last me another year.

So what's costing an average of several thousand per year? That's why I don't get. Most people aren't that sick! Is it the few who are who're driving up the costs for everyone else? Am I getting close to suggesting if one leads an unhealthy lifestyle one should either bear the burden of high insurance premiums or the cost of high medical bills?

But what about those who do all the right things yet still wind up with various diseases which, while treatable, are very expensive to treat? Should they before forced to "unfairly" pay more than their "fair share?" But life just isn't fair, is it? Why should someone who is blessed with health be forced to dole out serious chunks of cash for those who aren't healthy? And how do we separate the ones who're merely unfortunate from those who willingly did all the wrong things, health-wise?

I'm sorry for raising so many questions. As I see things, though, there doesn't seem to be a "best answer." My solution is that I don't carry health insurance because I am healthy, take pains to keep myself that way, and refuse to pay premiums the vast majority of which would be used to cover those either not as fortunate as I am, or those who willingly trashed their physiology over the years. While I feel bad for the former, I have no mercy towards the latter.

In summary, this is not a simple situation with a simple answer. As for me, if I'm beset with something serious, I'll make a decision to either exhaust my life savings or simply give up the ghost.

One thing I do, have, is a policy cap which costs very little. It covers only those expenses above a very large ceiling. So, I really won't have to exhaust my life savings. Just a third of them. If the prognosis for recovery is good, I'll do it. Otherwise, I'll do what I can without the expensive treatments and leave my nest egg to my progeny.

 

[ParticleGrl]

I don't accept the premise, but in any case one can only start to have the discussion after putting to rest the notion that everyone is "entitled" to 3 or 5:1 more than they paid into Medicare.

Obviously a 3 or 5:1 ratio isn't sustainable, its why the long-term budget problem IS health care. The question is how to control the costs- putting caps on the plan and leaving people at the mercy of the individual insurance market seems silly. Insurance works best with a large risk pool- using the size of a government risk pool to negotiate bargain pricing seems likely more effective.

The first steps needs to be reforms to drive us to at least comparable efficiencies to other countries (we spend a lot more as a nation, but we don't see much by way of results), Unfortunately, our political system is so horribly broken that any talk of reform drops to the level of the "debate" surrounding obamacare- horrible misinformation and idiot retirees at town hall meetings demand the government "keep its hands off my medicare!"

 

[Vanadium 50]

idiot retirees at town hall meetings

That's the way to convince them that your point of view is correct! You get 'em!

 

[WhoWee]

Obviously a 3 or 5:1 ratio isn't sustainable, its why the long-term budget problem IS health care. The question is how to control the costs- putting caps on the plan and leaving people at the mercy of the individual insurance market seems silly. Insurance works best with a large risk pool- using the size of a government risk pool to negotiate bargain pricing seems likely more effective.

The first steps needs to be reforms to drive us to at least comparable efficiencies to other countries (we spend a lot more as a nation, but we don't see much by way of results), Unfortunately, our political system is so horribly broken that any talk of reform drops to the level of the "debate" surrounding obamacare- horrible misinformation and idiot retirees at town hall meetings demand the government "keep its hands off my medicare!"

my bold
Doesn't the Government already control the price of health care services through their reimbursement rates? Why do you think the Government will all of a sudden become an efficient medical services purchasing agent?

http://www.ama-assn.org/ama/pub/phy.../the-medicare-physician-payment-schedule.page

 

[phyzguy]

I've never really understood the high cost of healthcare.

My solution is that I don't carry health insurance because I am healthy, take pains to keep myself that way, and refuse to pay premiums the vast majority of which would be used to cover those either not as fortunate as I am, or those who willingly trashed their physiology over the years. While I feel bad for the former, I have no mercy towards the latter.

I edited down your long post. You raise some good points, but let me ask you a question. What if you take this approach, as many do, and have some major medical problem, say a car accident. Will you then say, "I guess I rolled the dice and lost, please let me bleed to death on the side of the highway?" I'll wager you will not. You will accept the emergency care that the hospitals are required by law to give you, and those of us who do carry health insurance will pay for your treatment. This is why everyone should be required to carry health insurance, because everyone needs medical care at some point in their lives.

 

[WhoWee]

I edited down your long post. You raise some good points, but let me ask you a question. What if you take this approach, as many do, and have some major medical problem, say a car accident. Will you then say, "I guess I rolled the dice and lost, please let me bleed to death on the side of the highway?" I'll wager you will not. You will accept the emergency care that the hospitals are required by law to give you, and those of us who do carry health insurance will pay for your treatment. This is why everyone should be required to carry health insurance, because everyone needs medical care at some point in their lives.

Because the majority of large medical claims come from either accidents or major illness - plan designs have been flexible. A 20 something in perfect health may want a $10,000 deductible to keep premiums low and have preventative and emergency care in place. Then, for a few dollars per month, a $10,000 accident plan (or term life) can be added to offset the large deductible - just in case.

If choices are limited - premiums will increase (IMO).

 

[klimatos]

Those debt/GDP numbers don't reflect i) the outlandish pension guarantees made to California government employees which will cause future debt increases, shortly, ii) that California is already maxed out on its tax rates compared to most other states, so that it can not raise taxes to pay those pensions.

I live in California. I know of no law that says that we are "maxed out" on our taxes, nor any law that says we cannot raise them even further. If you know of such a law, please provide a citation.

Many states have higher state taxes than does California; and California taxes have been higher in the past than they are now.

While many Californians would agree with you that some pensions are "outlandish", nevertheless, the promises were made and accepted in good faith and we are both legally and morally bound to honor them.

"A promise made is a debt unpaid."

 

[mheslep]

I live in California. I know of no law that says that we are "maxed out" on our taxes, nor any law that says we cannot raise them even further. If you know of such a law, please provide a citation.

The reasons, not laws, that I had in mind preventing California from raising taxes include i) working people leaving the state and ii) California taxes being higher than the states to which Californians are traveling. http://data.bls.gov/timeseries/LASST48000003"

Ca labor force

Texas labor force

Many states have higher state taxes than does California...;

I do not think so, unless two make many. Only Oregon and Hawaii have higher top income tax rates than California's 10.3%. Of those two, Oregon has zero sales tax, Ha's is 4%, while Ca's sales tax (state and local) is 8.3%.
[PLAIN]http://www.taxfoundation.org/UserFiles/Image/maps/stateincome_c_small.png
California's business tax is 8.8%, with only a few states topping that - Il, DC, Pa, NJ.

So there is no law saying California can not raise taxes further, but I think it is a safe bet that Ca will gain no further revenue from doing so, i.e. Ca taxes are maxed out.

 

[mheslep]

Obviously a 3 or 5:1 ratio isn't sustainable, its why the long-term budget problem IS health care.

Agreed.

... (we spend a lot more as a nation,

Agreed. And too many people go uncovered.

but we don't see much by way of results),

Disagree. Meaningful results mean to me good and prompt medical outcomes: cancer, heart operation survival rates and the like, and not how many die from accidents or homicides, or whether a particular gene pool reflects low incidents of heart disease. The latter cases won't be changed by reforming the health care system. My research indicates nobody beats US medicine on these terms. It is medical excellence that I want to keep intact in the reform of the system, which I agree is needed.

 

[ParticleGrl]

Meaningful results mean to me good and prompt medical outcomes: cancer, heart operation survival rates and the like

But you can add to that infant mortality, preventable deaths, etc.

My research indicates nobody beats US medicine on these terms. It is medical excellence that I want to keep intact in the reform of the system, which I agree is needed.

It depends on the marker. By most quality of care studies I've seen, the US is a mixed bag. We are great at using a great deal of money to extend a cancer patient's life by a year or two. We are pretty poor in categories like preventable deaths and infant mortality.

 

[mheslep]

But you can add to that infant mortality,

I don't think so. The reported difference between the US and France/Germany is down to http://www.google.com/publicdata/ex...ountry:USA:FRA:DEU&ifdim=country&hl=en&dl=en":

It has also been common practice in several countries (e.g. Belgium, France, Spain) to register as live births only those infants who survived for a specified period beyond birth.

In other words what's recorded as fetal death (stillbirth) there might be an infant death here.

...preventable deaths, etc.

Such as those caused by hypertension, smoking tobacco, high cholesterol, malnutrition, STDs, etc? These are behavior related, having little or nothing to do with any health care reform proposals on the table.

...By most quality of care studies I've seen, the US is a mixed bag. We are great at using a great deal of money to extend a cancer patient's life by a year or two.

I'm reluctant to get into another country comparison discussion, but the difference for cancer survivors is not a "year or two." Five year survival rates are up to 5-20% better US vs Europe, or were back in 2007. For at least some cancers, the large majority of relapses occur inside 5 years, meaning if you survive 5 years it is likely something else will end up doing you in.
http://www.ncpa.org/images/1703.gif
http://www.thelancet.com/journals/lanonc/article/PIIS1470204507702462/abstract

 

[MarcoD]

In other words what's recorded as fetal death (stillbirth) there might be an infant death here.

Infant mortality is very clearly defined as the number of children dying in their first year. Numbers are http://en.wikipedia.org/wiki/List_of_countries_by_infant_mortality_rate" .

 

[WhoWee]

Did the retirees pay into the system, or was their retirement and health care part of their work/retirement compensation? If so, then companies and government must honor those promises, period. Yanking it away because it doesn't seem fair would be the height of unfairness to those to whom it was promised.

This issue seems to have been placed on the back burner. The reality is millions of retirees face the loss of company paid health coverage due to the elimination of a tax credit. These people will be forced onto original Medicare, a Medicare Advantage plan or a Medigap plan (if they can afford the premium). This will also increase the burden on the Medicare system.

http://www.nytimes.com/2010/03/30/business/30subsidy.html
"An association representing 300 large corporations urged President Obama and Congress on Monday to repeal a provision of the health care overhaul that prompted AT&T, Caterpillar and other companies to announce substantial charges for the current quarter.

Times Topic: Health Care Reform
The association, the American Benefits Council, said the provision — which reduces the tax deductions for companies with drug coverage for their retired employees — would deal a significant blow to corporate profits and would discourage companies from hiring more workers.

AT&T announced last week that it was taking a $1 billion charge because of the provision. Deere & Company announced a $150 million charge, Caterpillar a $100 million charge, and 3M a $90 million charge.

Many companies said they were taking these charges now, before the current quarter ended, to comply with accounting rules. But some corporate critics asserted that the companies’ rapid response to the health legislation was aimed at pressing the administration to repeal the provision.

James A. Klein, the president of the American Benefits Council, called the provision “a serious mistake that is having negative and unintended consequences.”

White House officials defended the provision, saying it was a deliberate effort to eliminate what they said was an unusually generous tax loophole."

my bold
Given the current discussion of "jobs" and eliminating "tax loopholes" (consider consequences) - this is an important topic.

 

[mheslep]

Infant mortality is very clearly defined as the number of children dying in their first year. Numbers are http://en.wikipedia.org/wiki/List_of_countries_by_infant_mortality_rate" .

You missed the point. The question is about what constitutes a live birth, and that definition varies by country.