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Current Events from a Science Perspective

With the heating up of campaign rhetoric, I’ve been hearing a lot about this $716 billion dollars that Romney is publicly saying President Obama “robbed” from Medicare. That is the exact word Romney uses. Well, if someone is stealing, I want to know how they are getting away with it so I did my research and discovered what the $716 billion is.

First, let me remind you that the Medicare trust fund does not have that much money and it’s not a piggy bank that can be raided. At the end of 2011 the Part A trust fund had only $244.2 billion.  The Part A, hospital insurance program, is financed through a payroll tax that goes into a trust fund similar to the Social Security trust funds. And that hospital insurance trust fund is being spent much more rapidly than the Social Security funds. No president can actually take money out of the Medicare trust fund as this money is in Treasury bonds which can only be cashed by Medicare at any time it is needed. As it is, with the continued increase in medical cost, Medicare can’t cover all the benefits without either more revenue (taxes) or reduced spending.

Ok, so where did the $716 billion come from? Actually this figure is for reductions in spending, so it really doesn’t take any money that is in the trust fund out of the trust fund. (Hum, isn’t that what Republicans are always saying—that we need to reduce spending?)

 Sorry Romney, there is no “robbery”. These reductions do not take any money out of Medicare, they are necessary adjustments to vendors who receive Medicare payments, and do not affect payments to beneficiaries.  They are aimed at insurance companies, hospitals, nursing homes and most of all, the Medicare Advantage companies. Medicare Advantage was started under President George W. Bush, with the idea that competition among the private insurers would reduce costs. But in recent years the plans have actually cost more than traditional Medicare. So the health care law scales back the payments to these private insurers. Medicare Advantage plans currently receive higher payments from the government on average than traditional Medicare – 9% higher than it was in 2010. The government pays Advantage companies 14-20% to manage patients health care. The Affordable Care Act cuts this fee to private companies. Romney and Ryan have a countdown clock showing how many days until Medicare (part A) is broke. The truth is that there would be even fewer days until the fund’s exhaustion if Obama’s health care law hadn’t included those $700 billion in spending reductions.

Romney’s campaign ad incorrectly claims that the “money you paid” for Medicare is being used to pay for Obama’s health care law. It is incorrect because the law doesn’t take money out of the existing hospital insurance trust fund. It cuts the future growth of spending. And in the future, seniors will still receive the benefits to which they are entitled.

Sources: Politifact.com, Factcheck.org

This is a guest post from Barbara Moore.

© 2012 Barbara Moore

 The goals of healthcare reform were to see that every citizen had adequate healthcare, ensure that healthcare was affordable, and protect citizens from insurance company abuses. Although many of the criticisms of the law were baseless, the law’s effect on the deficit and its constitutionality were serious questions. An analysis by the nonpartisan Congressional Budget Office predicted the Affordable Care Act would decrease the projected deficit by $138 billion over the first 10 years and by approximately $1.2 trillion over the next 10 years.  The Supreme Court , in National Federation of Independent Business v. Sebelius,  upheld the constitutionality of the Affordable Care Act. Below is a summary of the provisions the law that may affect you :

• students and unemployed young adults may stay on their parents insurance until age 26
• insurance companies may not limit the amount of care a person receives in their lifetime
• insurance companies may not cancel coverage because a person is sick  
• lowers the cost of care for Medicare recipients and closes the “doughnut hole” in prescription drugs, saving seniors $3.1 billion in prescription costs since 2010
• insurance companies must cover preventive services like yearly checkups, mammograms, cancer screening, and inoculations
• increases the penalties for Medicare fraud
• insurance companies may not deny coverage to children with pre-existing conditions
• insurance companies must provide justification for raising rates
• insurance companies must spend 80% of their premiums on health care or refund the difference. Americans are scheduled to receive $1.4 billion and Oklahomans $21 million in refunds this August.
• provides tax credits for small business owners so they can afford quality insurance for their employees
• provides for the creation of hundreds of community health centers and incentives for new doctors to staff them

Beginning in 2014:

• provides working Americans tax credits to help them afford quality insurance
• ends discrimination against adults with pre-existing conditions
• prevents insurance companies from charging women more than men or overcharging those in need of care
• provides funds to create state based insurance exchanges where people can compare prices of insurance
• provide states with funds to increase their Medicaid programs

       Source: healthcare.gov

 There are also hidden benefits: 

• It would improve the competitiveness of American companies. Most working Americans obtain health insurance through their employers; however, this putsU.S.businesses at a disadvantage with foreign competitors. Small companies have the added disadvantage that they cannot negotiate rates as low as larger companies.
•  It would cut down on the number of the uninsured using emergency services. Emergency room care is expensive and unpaid bills must be passed on to paying customers.
• It would reduce bankruptcies. A Harvard study found that about 50% of all bankruptcies in theUnited Statesare caused by illness and medical bills. Health providers, banks, businesses, and credit card companies who lose money in bankruptcies pass the cost on to the rest of us.
• It would improve everyone’s health. You and your family come into contact with many people each year. People without health insurance are less likely to receive immunizations and are much more likely to have untreated communicable diseases.

Research Credit: Barbara Moore

(C) 2012 J.C. Moore

 “Your family’s health and prosperity depends on that of everyone.”

The United States has just been through a recession that has left many Americans without jobs, financial security, and adequate healthcare. What could be a better time to see that every American has adequate healthcare? President Obama promised during his campaign to reform healthcare. His goals were to protect citizens from insurance company abuses, see that every citizen had adequate healthcare, and ensure that healthcare was affordable. It was up to Congress to write the details of the law.

For those who claim making law is like making sausages, the Affordable Care Act is more than an apt example. In the 1990’s, Hillary Clinton tried to reform healthcare – but attempts at reform stalled when Republicans came up with an alternate bill and the opportunity passed with no decision being made. In 2010, Congress used many of the ideas of the Republican bill to create the Affordable Care Act. Many of those ideas formed the basis of the Massachusetts health care bill that Governor Romney signed into law in 2006. The Affordable Care Act is certainly not ideal, but it came about as a series of compromises necessary to get it through Congress and avoid a filibuster in the Senate.

Controversies: Much of the controversy over the Affordable Care Act was about things that didn’t really exist in the law. It did not create death panels, provide public funds for abortions, provide payments to undocumented immigrants, take away fundamental rights, or threaten to bankrupt the country. Although there were many claims that the affordable care act will greatly increase the deficit, the nonpartisan Congressional Budget Office predicted the affordable care act would decrease the projected deficit by $138 billion over the first 10 years and by approximately $1.2 trillion over the next 10 years. However, the laws constitutionality was a serious question – and several states filed suit claiming that the federal government could not require citizens to purchase health insurance. The lawsuits reached the Supreme Court and in  National Federation of Independent Business v. Sebelius, 6/28/2012, the Supreme Court upheld the constitutionality of the Affordable Care Act. It ruled that the penalty for not purchasing insurance was a tax, and that Congress had a right to impose taxes.

Benefits: Now that the Affordable Care Act has been declared constitutional and will become law , below is a checklist from Whitehouse.gov  that summarizes what the affordable care act might mean for you:

The Future: There is still concern that the Affordable Care Act does not do enough to control the insurance costs or reduce the cost of care. The healthcare exchanges should provide more competition, and the 80/20 rule means that at least 80% of the premiums must be paid out in healthcare services.  There are also some intangible benefits to health care reform that may materialize in the future: 

• It would cut the unpaid bills for emergency services. Currently, emergency rooms are required by law to treat everyone, and those without medical insurance often use them for medical care when they cannot pay. Emergency room care is expensive and those costs must be passed on to paying customers.
• It would improve the competitiveness of American companies. Most working Americans obtain health insurance through their employers; however, this puts U.S.businesses at a disadvantage with foreign competitors who do not provide health insurance for their workers. Small companies have the added disadvantage that they cannot negotiate as low rates as larger companies.
• It would reduce bankruptcies. A Harvard study found that about 50% of all bankruptcies in the United States are caused by illness and unpaid medical bills. Bankruptcies affect everyone because the health providers, banks, businesses, and credit card companies who lose money in the bankruptcy pass the cost on to the rest of us.
• It would improve everyone’s health. Your family’s health depends on the health of everyone. You and your family will likely come into contact with thousands of people during this next year. People without health insurance are less likely to receive immunizations and are much more likely to have untreated communicable diseases.

 More information:  Here is some additional information from Whitehouse.gov with links to the topic: ”

• Insurance companies no longer have unchecked power to cancel your policy, deny you coverage, or charge women more than men. 
• Soon, no American will ever again be denied care or charged more due to a pre-existing condition, like cancer or even asthma.
• Preventive care will still be covered free of charge by insurance companies–including mammograms for women and wellness visits for seniors. 
• By August, millions of Americans will receive a rebate because their insurance company spent too much of their premium on administrative costs or CEO bonuses. 
• 5.3 million seniors will continue to save $600 a year on their prescription drugs. 
• Efforts to strengthen and protect Medicare by cracking down on waste, fraud, and abuse will remain in place.
• 6.6 million young adults will still be able to stay on their family’s plan until they’re 26.

A major impact of the Court’s decision is the 129 million people with pre-existing conditions and millions of middle class families who will have the security of affordable health coverage. 

We should also remember that under today’s ruling, having health insurance is and will continue to be a choice. If you can’t afford insurance or you’re a small business that wants to provide affordable insurance to your employees, you’ll get tax credits that make coverage affordable. But if you can afford insurance and you choose not to purchase it, the taxpayers will no longer subsidize your care for free.” 

 

Research Credit: Barbara Moore

(C) 2012 J.C. Moore