The median Social Security benefit in the United States is $1,335 a month, before they take out monthly $100+ in Medicare premiums. Jeb Bush, the somewhat fat and very goofy brother of former President George Bush, wants to steal that benefit, not for one month, but for 36 months, or a total of $48,060. What will you get in return – probably just a chance to say you contributed to lower taxes for rich families like the Bushes.
Jeb thinks this plan will win him the Presidency, which is why it was announced today with a peculiar thought process that surrounds most petulant aristocrats. Jeb knows the very rich just don’t need Social Security. Most make more in a day than you will earn in benefits in a year.
A 52% increase in Medicare Part B premiums is anticipated next year for about 30% of all participants. Nearly everyone older than 65 is on Medicare, so this huge change will affect 12 million or more Americans.
And it’s all thanks to legislative changes by our politicians, who get virtually free healthcare for life. Most seniors (about 70%) will pay $104.90 a month, or, oddly, $147 monthly just for the first year.
The current Part B premium schedule follows. For those unaware of it, the premiums are based on how much you earn. The more you make in retirement income, the more you pay in premiums. If you make very little you pay no premiums.
If your yearly income in 2013 (for what you pay in 2015) monthly was:
File individual tax return
File joint tax return
File married & separate tax return
$85,000 or less
$170,000 or less
$85,000 or less
above $85,000 up to $107,000
above $170,000 up to $214,000
above $107,000 up to $160,000
above $214,000 up to $320,000
above $160,000 up to $214,000
above $320,000 up to $428,000
above $85,000 up to $129,000
The Medicare monthly premiums above are those without the rate hike.
With the planned 52% rate hike:
$146.90 jumps to $223 monthly, or $2,676 a year.
$209.80 jumps to $318 monthly, or $3,816 a year
$272.70 jumps to $414.20 monthly, or $4,970.40 a year
$335.70 jumps to $509.80 monthly, or $6,117.60 a year.
The usual self-centered politicians and their masters at Fix the Debt, Libertarian Caucus, Tea Party and Fox News, along with a pack of pitiful former government officials like Ed Rendell, this week bemoaned the so-called “doc fix”, which brings Medicare payments to providers up to miserable levels, instead of a 21% cut.
That reduction in doctor payments would increase the number of physicians who refuse to treat Medicare patients. The Wall Street Journal explains in 2012:
…the proportion of family doctors who accepted new Medicare patients last year, 81%, was down from 83% in 2010, according to a survey by the American Academy of Family Physicians of 800 members. The same study found that 4% of family physicians are now in cash-only or concierge practices, where patients pay a monthly or yearly fee for special access to doctors, up from 3% in 2010.
Using the example of a September 2014 visit to a cardiologist (without the 21% reduction) in Philadelphia suburban Montgomery County, the doctor charged $168 for a 20-minute exam (time he was present with patient), and was allowed only the Medicare approved amount of $114.07, and Medicare paid only $89.43, while the patient paid $22.81. An EKG was performed by a physician assistant and the provider charge was $90, including analysis by the doctor. Medicare allowed only a payment of $18 – $14.11 by Medicare and $3.60 by the patient.
Is it any wonder that doctors are refusing to treat Medicare patients, even without more cuts in payments?
If you have completed your income tax (deadline tomorrow), and are a senior forced to be only on Medicare – versus far cheaper Obamacare – the costs you pay would astound the self-centered public masters and financial pundits in both political parties.
Here is a real life examination of Medicare expenses paid in 2014 by one average couple, Harry and Sylvia Schmendrich, both retired and on Social Security. Their adjusted gross income (AGI) was $30,309. Sylvia is 67. Harry is 73 and was required to withdraw a Required Minimum Distribution (RMD) from his IRA of some $8,400, subject to regular income tax rates. The IRS determines how much you must take out of such retirement funds each year, which increases your AGI.
No matter how you toss it, $30,309 AGI isn’t outstanding, so you would expect that Medicare benefits would offset low income with a great healthcare benefit. Wrong!
The Schmendrich’s medical expenses are typical of a couple, where one has had some sort of heart incident and is on the usual blend of cholesterol and blood thinner drugs, the wife is not on any major meds, and Harry spent one night in the hospital in 2014 after a fainting spell for observation.
Medicare Part A is included in Medicare at no premium charge, but it only covers hospital visits. Medicare B, to cover doctor visits, for average folks like the Schmendrichs, cost the couple $2,516 a year in premiums to the government. They also have an additional AARP plan which reduces co-payments for Part B by about 50%. That costs $2,487 for the couple annually. In addition they have premiums for Medicare D (drugs) which total $164 a year, and only cover some drugs, some of the time.
Harry ended up in the hospital overnight and his Medicare A paid everything except his deductible of $608. If he went twice last year, he would have paid $1,216, and so on. The only other big expense was an eye exam and glasses for Sylvia, which cost the Schmendrichs $903 after Medicare reimbursement of $50. Other doctor office visits during the year added up to $1,066. There was also about $300 for over the counter vitamins and other items
The biggest out of pocket expense was prescription drug co-pays, which totaled $3,341 for the Schmendrichs.
Grand total was $10,490.05 paid by the couple, fully covered by Medicare. If they had any dental expenses, none would be covered by Medicare. Hearing aids are also not covered by Medicare. About one-third of their AGI (before taxes) went to medical expenses.
At least, they had a “nice” deduction for their income taxes, but the politicians knew how to reduce that.
Some 7.5% of their AGI ($2,273) was deducted from medical expenses, leaving them with $8,229.
Medicare is a great deal – if you don’t have the facts and ignore lousy benefits and high prices. The fiscal hawks, who want to raise premiums and cut the current miserly benefits, don’t really care much for Medicare folks with walkers and bad hearts, I suppose because they are usually not physically able to successfully riot for their causes.
It’s budget season time again. The Washington Post and NYT have already published their obligatory stories on why we need to “reform” Social Security, Medicare and Medicaid, because if not, we won’t have hardly any money left to spend on military and discretionary programs. Fox and NBC stations this week said we must “deal” with the budget deficit caused by “entitlement spending.” Paul Ryan has agreed, and so has the Chamber of Commerce. Unfortunately, the White House sees this attack on the middle class as yet another chance to negotiate with Koch and company.
In the midst of self-inflicted austerity talk, Republicans heartily approve of spending billions of dollars to raise the Earned Income Tax Credit (EITC), which currently gives up to $6,143 (tax free) each year to couples and families, who have have lousy paying jobs.
Also in agreement are most Democrat lawmakers, who believe that EITC subsidizing business by supplementing wages is a kind thing to do for the needy. Looking down from the top, the “little people’s” dependance on the government for their livelihood is not demeaning and demoralizing, just curing social injustice of some sort.
When the wealthy masters of both parties in Congress agree on a policy, it is often wise for the rest of us to duck. The GOP loves EITC, because it rewards employers who pay poverty wages. Under normal circumstances such wages would lead to bare subsistence livelihoods for workers, increasing turnover and encouraging unions and other “troublemakers” to end working for starvation pay. However, with the middle class taxpayers sending billions of EITC dollars to these underpaid workers, all is well for the employer, who knows the poor will survive to work another day, and the boss can continue to compensate workers below the level of subsistence.
When will Democrats in the WH recognize that most benefits (food stamps, public housing, etc.) for the working poor are just subsidies to corporations, and that the solutions for reducing inequality must instead include higher minimum wages and more public benefits for all Americans – free college, free childcare, free healthcare and free nursing homes? Or do they already know this and have bowed to pressure from lobbies and campaign contributors.
If you wonder which employers are gaining the most from EITC, the graphics here tell the story. Most of the EITC recipients are from states dominated by austerity advocates, right to work laws, and generally low wages.
Jared Bernstein recently asked how we can move forward with economic change in this country. Mine was one of many fine answers:
The political solution to your question is even more politics. Two parties that espouse different social value views, but the same basic economic principles, now also decide in favor of the class that sustains them – the wealthy. Other nations have third and fourth parties that concentrate almost solely on things like minimum wage, paid leave, universal healthcare. When you vote for them, you vote for your pocketbook, not whether or not the Easter bunny should be included in public school books.
Both of our major parties have tremendous baggage if they try to attract votes from the other party’s social issue spectrum. Why would a very religious, pro-life person vote for a liberal, who may agree with a hike in the minimum wage, but also vigorously supports abortion or extreme secularism.
The Democratic Party will never attract the working class vote, because it has too many litmus tests. Do you agree that guns should be nearly banned? Do you approve of in-state tuition for folks who are not even American citizens? And on the other side, do you believe that we should have prayer in school and the world was created less than 4,000 years ago?
An economic party with candidates that only stood for fairness in income distribution and all the common sense worker protections, might elect ten or fifteen Senators, a couple dozen Representatives – not enough to select the Senate Majority leader or Speaker of the House, but enough to create a swing vote that represented the people’s financial interests, a block that would need to be consulted for its support.
A small third party would also be immune to the usual Washington advancement pressures. A minority party would be doomed to never electing a President on its own, but it would also permit its members to be their own man or woman.