Medicare

Moderator Evan Smith and panelists Garnet Coleman, Anne Dunkelberg, John C. Goodman and Leo Linbeck III participated in the Texas Tribune’s “A Conversation About the Future of Medicare” Monday afternoon. The panelists expressed their concern with the government’s level of Medicare control and discussed their thoughts on possible solutions to Medicare’s rising costs.

Photo Credit: Chelsea Purgahn | Daily Texan Staff

The rising cost of health care leaves experts without a solution to stunt the growing need for Medicare funding.

The LBJ School of Public Affairs partnered with the Texas Tribune and AARP to gather Medicare experts in “A Conversation About the Future of Medicare,” a panel designed to canvass the most sought-after solutions to rising Medicare costs.

A main problem called into question by the four panelists is the level of government controlling Medicare spending. One solution to costs is to push health care dollars down to local communities in Texas, said Leo Linbeck, president and chief executive of Aquinas Companies. Aquinas, a contracting and construction company based in Houston, funds entrepreneurial solutions to health care and education in Texas. Linbeck said because Texas is so big, health care initiatives will not be successful if they are organized the same as in small states.

“We’re trying to come up with one solution that fixes health care for everyone,” Linbeck said. “What we need is a lot of diverse solutions that vary by state.”

Anne Dunkelberg said a one-size-fits-all approach will never satisfy the health care needs of the whole country, but a federally organized Medicare plan does allow room for flexibility. Dunkelberg, associate director of the Center for Public Policy Priorities, a nonprofit institute that focuses on the needs of low- and moderate-income Texans, said states have options to fund Medicare differently because there are so many different health plans.

Another proposition to reduce spending is means testing, a method of eliminating high-income citizens from the Medicare recipient population. State representative Garnet Coleman, D-Houston, said means testing is not a feasible solution because income levels are not relative to sickness. Coleman said eliminating Medicare benefit recipients by increasing the age of eligibility and ruling out high-income individuals will not save enough money to consider it worth pursuing.

John Goodman, president and CEO of the National Center for Policy Analysis, said means testing is only helpful to an extent because life expectancies are higher for high-income earners, so lower-income seniors will inevitably bear the burden of Medicare costs. The center is a nonprofit think tank that emphasizes the free market.

“There are different ways of taking benefits away from people, but the bottom line is that seniors are getting less,” Goodman said.

Some of the shifts in spending include changes in the employee retirement system, panel attendee Mary Ragland said. Ragland, an Austin AARP community team leader, said her inclusion in the Medicare advantage plan forced her to choose between her own personal benefits and the health of the federal budget.

“Medicare costs are rising so fast. I’m getting better benefits, but it’s costing Medicare so much more,” Ragland said. “It makes me wonder why they would make a change like this when it feels so unnecessary.”

Printed on Tuesday, October 16, 2012 as: Medicare costs stump discussion panel

Editor’s note: Many college students rely on their parents’ health insurance plan, but soon they may well be on their own and planning to care for their parents. What should students look out for in the long-anticipated U.S. Supreme Court Affordable Care Act (ACA) decision and its aftermath? UT faculty members give their opinions, which have been edited for clarity.

“It is difficult to predict what the Supreme Court will do. But one thing is certain: The Court’s decision could affect many young adults who are now covered under their parents’ policies if the mandate is struck down. Nationwide, and in Texas, this age segment of the population is most likely to be uninsured. Even so, the young population is generally healthy and, on average, coverage [for them] costs less than for the old. As a result, insurers may want to keep this section of the law.”
Jacqueline Angel, Professor of Public Affairs and Sociology
LBJ School of Public Affairs

“Many will be covered on their parents’ plan until [age] 26,even if the ACA is found unconstitutional, at least for a while, since insurance contracts often run through the first of the year. And, in many cases, employers and insurance companies will keep that benefit in place. UT, for instance, offered [the option] to its employees to keep children on their health insurance so long as [the children] were not married or eligible for employee coverage. In terms of caring for their parents in the future, the ACA will not be terribly relevant since the ACA does not change Medicare coverage for those over 65. It does have some reductions in cost for pharmaceuticals while in the donut hole [the commonly used name for a Medicare coverage gap] and also makes a number of preventive services free under Medicare. Also, if their parents intend to retire before 65 and do not have employer-based coverage, the ACA will make buying coverage cheaper and more transparent than presently.”
David Warner, Professor in Health and Social Policy
LBJ School of Public Affairs

“The future of the parental coverage (until the age of 26) provision of the ACA is very much up in the air. The Supreme Court could uphold the ACA’s individual mandate provision, and then there’s no problem for students. It could also write a narrow opinion scrapping the individual mandate but leaving the rest intact (legally). It could also write a broad opinion and strike the whole ACA down. That would be bad for students needing parental coverage.

However, (a) some insurance companies have said they will maintain the parental coverage provision in their policies, even if the ACA is struck down. And (b), some Republicans are interested in reenacting some of the ACA’s more popular provisions, like the parental coverage provision, if the ACA is struck down. Other Republicans, however, want to eliminate every bit of ACA’s DNA down to its last molecule.

Importantly, even if insurance companies voluntarily keep parental coverage and/or Congress reenacts it, and if the individual mandate is struck down, there is serious question as to whether parental coverage and other provisions of the ACA, such as barring the refusal of coverage due to preexisting conditions, would be economically sustainable.”
Robert Prentice, Professor of Business Law
McCombs School of Business

“Whether or not the individual mandate is upheld, young people will need to think about finding jobs that include health insurance or finding health insurance plans they can afford to pay for out of pocket. One accident or illness could easily cause them to owe as much as or more than they do in student loans. Most important: Young people can help in figuring out how to rein in health care costs and develop a system that provides Americans of all ages access to routine as well as catastrophic health care.”
Diana DiNitto, Professor in Alcohol Studies and Education
School of Social Work

“The requirement for insurers to allow parents to insure their children until 26 has been very popular. Although the Republicans do not support health care reform, they have stated that they would want to continue this provision. If the Supreme Court supports health care reform, students will be required to purchase insurance from their employer or from a state or federal health care exchange. In the past, many young adults have forgone health insurance. Under health care reform, this choice would lead to tax penalties. In terms of parents, health care reform does expand coverage for things not currently covered by Medicare (e.g. prescription drugs), which will decrease the financial burden on parents and/or their children. Health care reform is also purported to be a method for containing rising health care costs, so both parents and children will, one might hope, pay less out of pocket for their insurance over time than they will if the health care reform law is overturned.”
Kristie J. Loescher, Senior Lecturer
McCombs School of Business

President Barack Obama speaks about the “Community College to Career Fund” and his 2013 budget on Monday at Northern Virginia Community College.

Photo Credit: The Associated Press

WASHINGTON — President Barack Obama is sending Congress a new budget that seeks to achieve $4 trillion in deficit reduction over the next decade through cuts in government spending and higher taxes on the wealthy. At the same time, he wants to boost spending in key areas such as transportation and education.

The spending blueprint is certain to spark an election-year battle with Republicans, who are vowing to oppose Obama’s tax hikes. They contend the president is not doing enough to attack a dangerous deficit problem.

In a fact sheet previewing the budget, the administration sought to cast the debate as a battle to protect the middle class following decades of eroding security and a deep recession.

“We must transform our budget from one focused on speculating, spending and borrowing to one constructed on the solid foundation of educating, innovating and building,” the administration said.

Obama was scheduled to speak Monday morning to students at Northern Virginia Community College to highlight the budget’s education initiatives.

Jack Lew, the president’s chief of staff, made the rounds of the Sunday talk shows to promote the spending initiative as a balanced approach that will focus on the short-term imperative to provide more support to the economy while attacking long-term deficits.

While administration officials defended the plan as a balanced approach, Republicans attacked the effort for failing to do more to restrain the deficit, which Obama had promised in 2009 to cut in half by the end of his first term.
“We’re taking responsibility for dealing with the drivers of our debt,” Rep. Paul Ryan, chairman of the House budget Committee, said Sunday. “Medicare is going bankrupt.”

Ryan is preparing an alternative to Obama’s budget that will be similar to a measure that the House approved last year but failed in the Senate.

This year’s budget debate is expected to dominate the presidential contest and congressional elections with the issue not finally resolved probably until a lame-duck session of Congress after the November election when lawmakers will have to decide what to do with expiring Bush-era tax cuts and looming across-the-board spending cuts.

Obama’s spending plan for the budget year that begins Oct. 1 projects a deficit for this year of $1.33 trillion. That would mean four straight years of trillion-dollar-plus deficits.

Under Obama’s outline, the deficit would decline to $901 billion in 2013 with continued improvements shrinking the deficit to $575 billion in 2018.

Senate Republican leader Mitch McConnell of Kentucky said Democrats did not want to vote on Obama’s spending plan, so he would once again put it forward for a Senate vote where he predicted it would fail as it did last year.

Lew blamed House Republicans for pushing extreme measures rather than trying to reach consensus with Democrats and avoid the kinds of last-minute crises that roiled financial markets in 2011, such as the summer showdown over raising the government’s borrowing limit.

“Congress didn’t do a great job last year. It drove right to the edge of the cliff on occasion after occasion,” Lew said.

According to the White House fact sheet, Obama’s budget will adhere closely to the approach he outlined in September in a submission to the congressional “supercommittee” that failed to agree on at least $1.2 trillion in additional spending cuts to keep across-the-board cuts from taking effect next January.

The Obama budget sticks to the caps on annual appropriations approved in August that will save $1 trillion over the next decade. It also puts forward $1.5 trillion in new taxes, primarily by allowing the Bush-era tax cuts to expire at the end of this year for families making $250,000 or more per year.

Obama, as he has in the past, also proposed eliminating tax deductions the wealthy receive and would also put in place a rule named for billionaire Warren Buffett that would seek to make sure that households making more than $1 million annually pay at least 30 percent of their income in taxes.

Obama would also impose a new $61 billion tax over 10 years on big banks aimed at recovering the costs of the financial bailout and providing money to help homeowners facing foreclosure on their homes. It would raise $41 billion over 10 years by eliminating tax breaks for oil, gas and coal companies and claims significant savings from ending the wars in Iraq and Afghanistan. Lew said the budget would cut spending by $2.50 for every $1 in extra taxes it seeks.

Among the areas targeted for increases, Obama is proposing $476 billion in increased spending on transportation projects including efforts to expand inner-city rail services.

To spur job creation in the short-term, Obama is proposing a $50 billion “upfront” investment for transportation, $30 billion to modernize at least 35,000 schools and $30 billion to help states hire teachers and police, rescue and fire department workers. Republicans in Congress, opposed to further stimulus spending, have blocked these proposals in the past.

The White House said Monday Obama will seek $8 billion to create a fund to encourage community colleges and businesses to work together to train workers in high-growth industries.

The Obama budget seeks $360 billion in savings in Medicare and Medicaid mainly through reduced payments to health care providers, avoiding tougher measures advocated by House Republicans and the deficit commissions that said it was critical to restrain health care costs