When President Obama got to the part of his Rose Garden speech that mentioned Medicare cuts, many seniors or soon-to-be seniors cringed.
Who could blame them?
There’s been so much talk of fixing the deficit by cutting so-called entitlements—it’s really insurance not entitlements because workers paid into Medicare and Social Security all their working lives—instead of raising taxes.
Contrary to what one hears from conservatives and the mainstream media, Americans are being taxed at the lowest rate in over a half a century.
This country did fine in the 1950s and 1960s when the highest marginal rate was anywhere from 70 percent to 90 percent. Raising taxes, especially corporate and capital gains, is a must.
Obama made perhaps the most meaningful statement of his presidency when he vowed to veto any deficit reduction scheme that does not include tax hikes to wealthy individuals, corporations and unsalaried high earners like Wall Street hedge fund managers.
That said, Medicare must be reformed—if left alone, it would consume the entire federal budget within 50 years—and Obama’s recommendations were far more sensible than the draconian plan of House Budget Committee Chairman Paul Ryan.
Starting in 2017, according to Obama’s plan, upper-income Medicare beneficiaries would pay more for outpatient treatment and prescription drugs; newly-signed up beneficiaries would pay a penalty if they purchase private insurance that covers all or most of Medicare’s co-payments and deductibles; new beneficiaries would pay a $100 co-payment for home health services unless they’ve just been discharged from a hospital or nursing home; and, finally, new beneficiaries would pay a higher annual deductible for outpatient services. It would increase by $25 from the current $162 for new enrollees in 2017, 2019 and 2021.
The plan would cut its payments to pharmaceutical companies by $135 billion over 10 years.
AARP and the liberal advocacy group Families USA are not happy with the plan, saying it will undermine coverage to the uninsured by the Affordable Health Care Act that Obama enacted.
To tell the truth, none of America’s health care cost issues will be completely solved until this country has single-payer federal health care like most Western industrialized democracies.
Until then, Obama’s plan is about the best one out there.
(Reprinted from the Philadelphia Tribune.)