Beware of ending cap on Social Security payments at $106,000

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Sometimes we forget that Social Security is supposed to be a personal insurance program to prevent our golden years from being destitute. That is the general perception, and in winning over the minds of conservatives we have to acknowledge that by tamping down our rhetoric a bit and coming up with a platform that solves the problems of Social Security without the appearance of putting undue responsibility on the rich.

So rather than just removing the cap on personal payments towards this fund altogether, we must tread lightly on this one. We can protect Social Security's solvency by raising the cap from $106,000 to $135,000 with two donut holes above that tier. For those making over $2 million a year, apply the standard rate to annual income between $2 million and $2,050,000. For those making $5 million or more, apply the rate to income between $5 million and $5,250,000.

This would make Social Security solvent for generations, and perhaps add to the monthly payments for those who need it.

Some may see this as compromise, but we have to do things with an eye towards diffusing the inevitable cries of "socialists!" by Republican pundits and their rank and file. Although there is little logic among Tea Party zealots, we bring about the change we need by gaining the favor of the quiet, cognizant conservatives throughout our nation. Eventually they will see the difference between their views and the direction of their CORPservative GOP leadership. Our logic and ideas can be something to catch their eyes and mind within the vacuum of that gap between their parent's conservative ideals and the current Republican leadership.

Remember, we don't have to convert all these people to being Democrats. We all are better served if they actively choose to change the Republican Party from within, displacing the banshee cries of the far right and banishing forever the ugliest, most corrupt force within American politics for over a century.

ImprobableTodd's picture
ImprobableTodd
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Perhaps instead of diffusing calls of "socialism", we ought to call out the far right for what they are..Neo-Feudalists...a term being coined by world class economist Michael Hudson.

A return to any sort of feudalism probably isn't a good thing.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 3:01 pm
Quote ImprobableTodd:

Although there is little logic among Tea Party zealots, we bring about the change we need by gaining the favor of the quiet, cognizant conservatives throughout our nation.

Couple Flaws in your plan.
First, unless you are planning on reworking the formula's on benefits you are going to get a virtual zero sum gain. Meaning those who contribute $2 million income worth of payments is "entitled" to $2 million worth of benefits. So it does nothing for long term solvency.

Secondly, The Donut holes are ridiculous. Anybody making that much could easy skirt the narrow window of tax. I doubt anybody of that tax bracket wouldn’t have a tax lawyer advising them.

Third, your plan doesn’t address the real problem with Social Security. The fact that it is fill with IOU’s. All the money the Baby Boomers paid into the system was used by Federal government on everything from Tree frog habitat to Bombs dropped on Iraq.

Telara
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Aug. 10, 2011 8:53 pm
Quote Telara:
Quote ImprobableTodd:

Although there is little logic among Tea Party zealots, we bring about the change we need by gaining the favor of the quiet, cognizant conservatives throughout our nation.

Couple Flaws in your plan. First, unless you are planning on reworking the formula's on benefits you are going to get a virtual zero sum gain. Meaning those who contribute $2 million income worth of payments is "entitled" to $2 million worth of benefits. So it does nothing for long term solvency. Secondly, The Donut holes are ridiculous. Anybody making that much could easy skirt the narrow window of tax. I doubt anybody of that tax bracket wouldn’t have a tax lawyer advising them. Third, your plan doesn’t address the real problem with Social Security. The fact that it is fill with IOU’s. All the money the Baby Boomers paid into the system was used by Federal government on everything from Tree frog habitat to Bombs dropped on Iraq.

As to the zero sum gain, you're assuming that the benefits paid to the millionaires will be in proportion to their level of contribution, and there's no need for that. Solvency insured. Donut holes: effective. Call them absurd if you like, but they do bring in cash. And on the third point on the IOU's that BUSH drew, when the Bush tax cuts sunset part of that savings can go to pay all that off. Then we establish the "firewall" that Gore called for that completely separates this money from the general fund.

Take a step back from your naysaying posture and you might just realize that this would work.

ImprobableTodd's picture
ImprobableTodd
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Jul. 31, 2007 3:01 pm
Quote ImprobableTodd:

As to the zero sum gain, you're assuming that the benefits paid to the millionaires will be in proportion to their level of contribution, and there's no need for that.

You do not have a choice in the matter unless, as I stated, you rework the benefit formulas. There are two side to Social security, Put more into it does little good unless you change how it is distributed. One is obviously hard than the other to accomplish.

And on the third point on the IOU's that BUSH drew, when the Bush tax cuts sunset part of that savings can go to pay all that off. Then we establish the "firewall" that Gore called for that completely separates this money from the general fund.

They've been taking money out of it since the begining. Where do you think Clinton magically came up with his "surplus" He stole it from Social security. Bush Tax cuts do nothing for Social Security. The current deficit spending is larger than the revenue generated from the Obama Tax extention.

Telara
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Aug. 10, 2011 8:53 pm

Roughly speaking, benefits from a medical perspective are dished out in accordance to need--not in accordance to 'who pays' (although, as my colleague in anesthesiology suggested, perhaps we in the U.S. should have a 'two-tiered' medical program where everyone gets 'basic care' but those highly expensive, technically embellished, forms of medicine should only go to 'those who pay for it').

Now, apart from it sounding somewhat 'socialist', what do I mean when I say that medical benefits are dished out in accordance to need right now? What I mean is that if someone who comes in with a heart attack who may not be able to pay and may have paid nothing into any American medical program (including, say, a person who comes across the border from Mexico with that heart attack--and I do have a specific example that verifies that fact) still gets all the treatments available in American medicine to treat that heart attack up to, and including, coronary angiography and heart bypass surgery.

You really cannot affectively discuss this situation until you 'face the facts' as they are being applied today. And, the 'fact' is that, by law (EMTALA and others from an institutional basis--'contract law' from a physician-patient basis), you cannot 'openly' alter the method of care you apply to a patient dependent upon that patient's ability to pay. You have to apply it according to the need of the patient. I put 'openly' in quotations because things outside of bonafide 'life and death' emergencies can be 'fudged on' some what without it tipping the legal requirements to apply care to the patient as the need arises up to and including anything offered (or offerable) by the physician and the institution. The only thing that the physician can do is refuse to see that patient to begin with--and there is nothing that an institution can do if that patient reaches their ER (each specific institution can somewhat skirt the issue by claiming 'they have no beds available for the patient'--but some of us in the profession realize that that is, more often than not, a 'fudged position' on the institutional players part and, if they get caught, they can get fined around $50,000 per occurence).

Both sides need to understand what they are working with--then, and only then, may there actually be some decisions put forth to manage the situation fairly and up front.....the trick to the politics of this trade is that they actually never point out to the public how medicine is really managed now....

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Kerry
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Jul. 31, 2007 3:01 pm
Quote Robindell:

I personally would not want to patronize a doctor who doesn't have a strong belief in the value of all human life and who would not want anyone to suffer needlessly from pain if it could be treated with any degree of effectiveness.

At any point? At any cost? I'm not trying to disagree with you, necessarily. However, I wonder if you know what this all entails. The 'value of all human life' is easy to say if it's 'the other doctor' (or 'other institution') having to take care of the non-paying patients. Not wanting 'anyone to suffer needlessly' to what point? If treatment is ineffective in completely relieving that pain, to the point of euthanasia? Does euthanasia 'honor all human life' to you? What if it's the choice of the one who possesses that life? Does NOT doing as they request 'honor' them?

The problem that I am trying to convey in my previous post is that, by law (and social convention, if you want to see it that way), we already apply care to whoever needs it to the degree that it is needed at that time as long as a physician takes their case--and the institution has a bed (and an ER--many of these things are changing in ways that can 'legally skirt the rules'--some ER's are becoming 'specialty ER's' that don't just accept anyone--and some specialists don't cover general hospitals so that they won't get stuck with a patient that doesn't pay them as a 'back up call' requirement for being on the staff of that hospital). But, the point still is that medicine is being applied to those who cannot pay--and some are burdened more than others with that same medical care when they need it (someone who might go bankrupt for the same service might have a problem with us delivering the same medical care to someone that's not even from our country and has no way to be 'responsible for their bill'--that was even pointed out by the cardiologist that actually took that patient from Mexico that I am mentioning here--there are many problems with the way U.S. medicine is managed--by law, by government, and by financial institutions--and even by some doctors--but, as some doctors explain, there is still an ethic in this country that the best doctor is the richest doctor--otherwise, why would he be rich? So, doctors that drive Mercedes are better than doctors that drive Toyotas...).

How to address the payment structure of the 'non-paying patient in need of advanced medical care' is the point--the application of medical care is there for now (but, if it isn't going to be financed as regularly as laws require its administration, you are going to have people try to skirt this requirement out of necessity--whether 'the drive to help all people' is there or not--using any 'loophole in the law' they can find). Or, if you want to be fiscally consistent with medicine as a commodity that must be paid as applied, what are you going to do with the laws that say no patient can be turned away--and no patient in a physician-patient contract can be offered any less than any other patient in any physician-patient contract whether they pay or not? Get rid of that contractual obligation of the physician--and the laws that require institutions to see these patients regardless of whether they can pay or not? And, keep vying for the idea that this is all about 'the best medicine money cannot afford to everyone'?

Kerry's picture
Kerry
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Jul. 31, 2007 3:01 pm

Telara, the "IOUs" problem is nonsensical propaganda put out there by those who want to get rid of SS. It's a scare tactic of the same ilk as "death panels" was in the health care debate.

SS is invested in treasury bonds. If you want to call them "IOUs", then anybody invested in bonds has a portfolio of "IOUs". In fact, you could say that any money you have invested anywhere is an IOU. If you've got a $1220 in your checking account, do you think your bank has 12 hundred dollar bills and a twenty in a box somewhere waiting for you? No. It's another "IOU".

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Vic W.
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Jul. 31, 2007 3:01 pm

My uncle for a while was Chief of Anesthesiology of a large urban hospital until he fainted in the operating room due to overwork. I don't think he would have wanted health care to be rationed to only those who could afford certain procedures. He lived in a modest apartment building in the city, and later moved to an older apartment building, a two-flat, which was orignally owned by his mother, a Polish Jewish immigrant. He was not interested in a living in a mansion or in wealth. He worked for the hospital's blood bank and would sometimes go to a state prision to collect blood donations from inmates.

The public, and most of the Republicans, don't know anything about medical ethics. They don't understand that it costs more to treat people in a hospital emergency room than in a physician's office.

I personally would not want to patronize a doctor who doesn't have a strong belief in the value of all human life and who would not want anyone to suffer needlessly from pain if it could be treated with any degree of effectiveness.

With Social Security, you could have a social, economic, and political disaster if those who receive benefits and are disabled are harmed by having those benefits reduced. The government could conceivably be unfair to people who cannot make it on their own. I am not an attorney, but I have the concern that the Americans with Disabilities Act was not written in such a way to hold the federal government accountable to the reponsibility of ensuring that the rights of disbled people are adhered to and respected by the federal government. Most states are struggling and are in poor financial shape. The federal government may not raise the cap on Social Security due to the disappointments that others have written about rather endlessly concerning the politicians. Would it be possible, or politically feasible, to limit the benefit amount going to extremely rich people when they retire?

Thom should consider having on some kind of independent but fair-minded actuarial scientist or government economics public policy expert to talk about this issue and review some of the options that could be implemented to address the financial issues of Social Security.

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Robindell
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Jul. 31, 2007 3:01 pm

From a financial standpoint, a practitioner might not be able and/or willing to see a patient who has no means of paying the bill. That may be a practical necessity or a means of being fair to those who can pay, but it is likely to be unfair to those who cannot. My understanding is that doctors in other countries such as Germany and Japan have lower average incomes than do U.S. physicians. One of the factors that is sometimes mentioned regarding the expensive nature of American medicine is the so-called "fee for service" method of expensing services. If you went to an HMO system where the doctors were employed directly by the HMO, it seems there still would be the issue of the corporation denying services or treatments deemed unnecessary or experimental. The HMOs are intentionally and expressly designed to lower cost by limiting services. Many people apparently have found them to be a disappointment. But that researcher who is a physician at Dartmouth, whose name I don't recall, found that the centers which had the most procedures and the most expensive treatment costs did not have the best outcomes, statistically.

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Robindell
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Quote Robindell:

The public, and most of the Republicans, don't know anything about medical ethics. They don't understand that it costs more to treat people in a hospital emergency room than in a physician's office.

There was something mentioned about variances in Medicare payments per capita of Medicare recipients about a year or so ago--even here in thomland. McAllen, Texas==right across the border from Mexico in southern Texas--was the most expensive per capita place in the nation for Medicare payments. Comparatively, the Mayo Clinic costs a little over half as much per capita. I believe there was some indication that there was going to be some form of review of this to see how McAllen cost so much--and the Mayo Clinic cost so little--per capita.

However, shortly after that report was published, the Mayo Clinic reported having lost millions and millions of dollars in the application of medical care to Medicare patients--suggesting that they may have to either turn away patients or require higher reimbursements. I'm suspecting that that millions and millions of dollars the Mayo Clinic suddenly 'lost' was in comparison to the per capita payments to higher pay-out places like McAllen, Texas. But, what does cause the 'higher pay-outs'?

Part of my own training was at Scott and White in Temple, Texas--a large hospital organization that was based after the Mayo Clinic model. The point in that model (at least at that time--and that was thirty years ago so even 'their model' may have changed) was the idea of sequential visits and step-wise interventions. What I mean by that was the point that the practice of medicine started with the simplest assessments and simplest therapies--and increased the intervention when simple therapies failed in follow up. And, there are two points to note in this--one, many ailments have no cure, only treatments, and, two, in many cases, time (or 'nature') takes care of it. Not all stomach pains with vomiting and diarrhea are a surgical emergency (like appendicitis, for instance)--in fact, most aren't and many can be treated with symptomatic relief and time. Perhaps even just fluids are needed. However, despite that fact, there can be a few of them that are surgical emergencies. In a sequential, ongoing, medical management style, those are picked out by educating the patient on what to return to the physician for--if no fluids are tolerated in 24 hours, if pain especially in the right lower quadrant worsens, if the symptoms are lasting longer than three days, if the symptoms of any pain or fever cannot be effectively controlled with simple, symptomatic management, etc.

However, as a whole, that's not foolproof. Also, that type of management does require time--and it does require some effort on both the physician's (to educate the patient) and the patient's (to understand the education) behalf. And, 'educating the patient' is NOT what the physician (nor the institution) gets the most reimbursements for--and they've tried to do that with certain qualifiers in the third-party payment structure but that basically has just burdened the physician and the system with more paperwork. Plus, thanks to a rather skewed perspective on what 'medicine' can offer (intentionally introduced through advertising campaigns), 'educating the patient' and NOT offering the fullest evaluation every time with every ailment is NOT what the patient wants--or expects--and, if any potential bad outcome comes out of this without the fullest application and documentation possible from a medical and technical viewpoint, then, yes, that's when a lawsuit is more likely to happen.

Now, this may be able to be qualified if you, as the patient, have a physician that you trust and know as the doctor, with a relationship that you know you can 'go back to that doctor' anytime something's not working the way you expected (or the physician explained), then the practice of medicine can be a follow-up management from simplest to most complex as the need arises generally with satifaction all the way around and mostly good outcomes (and patients are actually much less likely to sue doctors they know and trust--even with a bad outcome). But, that is NOT how most of medicine is practiced now. HMO's (and, by the way, government clinics) may offer you one physician as 'your own'--but, may not. Besides that, just like practices, physicians change jobs (and do more frequently through HMO's and government clinics than they would their own practice). And, of course, ER's (or any 'urgent care center') just offers you the doctor (or PA, etc.) that you get. And, in such settings, with the patient's expectation that 'the answer' will come every time (what I call 'one-stop shopping of medical practice'), In that setting (especially the ER), almost every abdominal pain with nausea and vomiting gets a CT scan to 'rule out appendicitis', every 'new headache' gets a CT scan to rule out a bleed or brain tumor, almost every chest pain gets a complete work-up to 'rule out heart attack', etc.--and, what was happening in McAllen was that when there was one of those studies (out of hundreds) that did actually show something that needed to be treated and, say, that facility couldn't treat it and had to transfer it, then, in almost every case, the studies were repeated (a form of 'double-dipping').

Now, to top that off, physicians and nurses (as all 'customer service industries') are starting to be rated on 'customer satisfaction surveys'. And, everything is centered on 'what satisfies the customer'. This isn't exactly like the patient having their own doctor that they know and trust--where even bad outcomes are more likely to be accepted. This is like 'if you didn't get what you expected'--and that done with a smile and cordial service like this is a bank or a church instead of a room full of people that at least think they are dying and sicker than the other person--then you complain. And, as one non-interventionalist cardiologist in my training once said, if you talk to the person for an hour but, then, don't give them a prescription or a treatment out of that, they will complain about the bill, however, if you poke them, stab them, cut them, radiate them, or medicate them, they are more likely to accept the charge and think that something was done. So, it's back to 'one-stop shopping' or, as I am known in this area for saying, like the Eagle's song Life in the Fast Lane, 'Everything, all the time'.....

Quote Robindell:

My understanding is that doctors in other countries such as Germany and Japan have lower average incomes than do U.S. physicians.

Well, in Canada with its 'gatekeeper application of medical care', primary care physicians have, on average, higher incomes than their U.S. counterparts--it's the specialists in Canada that get paid so much less (so much so that many come to the U.S.). Here in the U.S., people are expected to have access to any specialist they think they need. One of the surgeons in my town sent his father-in-law to a medical center in San Antonio and, as he put it, 'before the sun set that day, he had nine doctors looking after him--hell, if he had a big toe problem, he was seeing a big toe specialist'....

Quote Robindell:

My uncle for a while was Chief of Anesthesiology of a large urban hospital until he fainted in the operating room due to overwork. I don't think he would have wanted health care to be rationed to only those who could afford certain procedures. He lived in a modest apartment building in the city, and later moved to an older apartment building, a two-flat, which was orignally owned by his mother, a Polish Jewish immigrant. He was not interested in a living in a mansion or in wealth. He worked for the hospital's blood bank and would sometimes go to a state prision to collect blood donations from inmates.

I applaud your uncle's dedicaton and hope he recovered from his exhaustion and don't get me wrong but, as I told my own anethesiologist colleague I mention above, as an anesthesiologist, you have a rather 'captured audience' having to face only a particular issue--and, after all, most of them, you put to sleep....8^).....

Kerry's picture
Kerry
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Jul. 31, 2007 3:01 pm

The donut hole is a bad idea in that it is some added mess you have to manage over the subsequent years to adjust for inflation, etc. A better solution is to have no donut hole or cap and have a rate that makes sense for all of us and to keep it solvent. The biggest reason I think why a donut hole was discussed was to avoid Democrats in effect advocating "raising" taxes for those making less than $250k that Obama made when running in 2008. Stephanopolis tried to trap him on this topic in one of the debate questions on one of the debates leading up to the election. Otherwise, it really served no purpose.

A better solution than putting in a donut hole to keep this commitment is to lower the tax rates such that those making $250k would pay the same amount as they did before, and everyone making less would get a payroll tax cut. A partial solution could be done with this approach by keeping the current reduced payroll tax rate and removing the cap, though it is probably not low enough for those making $250k not to still get their payroll tax raised some.

Those who try to rationalize this as just a retirement plan still need to understand that 1/3rd of the payouts are to the disabled and to the survivors of those on these benefits (making it more of either a health insurance or life insurance plan in some instances than just a retirement plan). That is why we should focus on it being a safety net program, and emphasize that is is all people's responsibility to contribute according to how much they make.

Also consider that the life span of those making more than the cap is a lot higher statistically than those making money at the cap level and lower, so that in fact they get more back for their raw contributions (ignoring the fact tha they actually make more income) than those making the cap or less. This becomes even more exaggerated as we raise the retirement age, etc. to the point where many at lower income levels may get little or no benefits at their statistical life spans, leaving most of the benefits either to the disabled, etc. or the wealthy, even though most at lower salaries pay in most of the money.

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calipendence
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Jul. 31, 2007 3:01 pm

In this political environment, people have to make it clear to the elected officials that they do not trust for-profit corporations to run either the Old Age and Surviors' benefits or the Social Security Disability benefit program. I don't think corporations would be interested in SSI at all. The argument that I hear from conservatives the most often is that people are living longer today than when FDR first came up with Social Security. That only means that the program's financing needs to be improved. The conservative philosophy cannot apparently adjust to scientific advancements in medical care. The value on human life is lacking in conservative thought, even though many conservatives would deny it; they are deceiving themselves in many cases.

I recently read that there are two Social Security trust funds, one for disability and one for Old Age and Survivors. The disability fund is the one that was being discussed as being the most problematic in the short-run because of the high unemployment rate leading to an increase in people applying for and receiving benefits.

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Robindell
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The other way we're subsidizing Walmart...

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