Federal Budget Deficit Crisis – Bah Humbug

Who here, reading this article, is old enough to remember reading about the “looming” babyboomer retirement crisis . . in the 1980s? The 1990s? Early 2000s?

I do.

This “crisis” – the wave of boomers now approaching retirement age AND the age of Social Security and Medicare eligibility – has been on the federal government AND political radar screen since the 1960s – when Medicare was first legislated.

Demographic data, and that data’s “related issues” – such as the coming of retirement age of the boomer generation – has been available to the U.S. Congress since the U.S. government began taking a census of the population – starting with the census of 1790.

Given available census data the so-called crisis isn’t an economic crisis. It’s a political crisis. One brought on by years and decades of Congressmen, Congresswomen and Senators IGNORING THE DATA, THE FACTS – well known for decades that this time has been coming – as certain as any election comes every 2, 4 or 6 six years for Congress, the President or the Senate.

This “crisis” – and the untenable “solutions” proposed to solve it – such as privitizing Medicate – is one brought on by a lack of courage and decency and honesty and integrity. By an unwillingness to collect enough money, when times were good, to fund the obligations and agreements made with the post-war generation – who for years contributed to Social Security and Medicare in the belief that those in charge of the programs – the U.S. Congress – were going to keep their CONTRACT WITH AMERICANS.

For some 40 years I have been subject to taxes for Medicare and Social Security and never once did I object. I considered it an investment in my future. A form of insurance that I paid into, in the firm belief that MY GOVERNMENT would honor its promise, do the right thing, and be there when I needed it.

The 1960s. That’s when the “future” issues of Medicare were first recognizable – unless you, my elected officials, ignored the census data.

So don’t talk to me about “the crisis” of the looming budget deficits.

There is no economic crisis. There is now and always has only been a crisis of political honesty and political integrity and political will – to do what has been promised since 1935 (Social Security legislation enacted) and 1965 (Medicare legislation enacted).

I don’t want to hear another word about “the crisis”. I don’t want another “we can’t do this” – that is pay what has been promised, and paid for, by a generation for generations.

Get the will and the integrity to keep the promise that was made. Do what is necessary to keep that promise.

Do it now. Do it like you should have been doing in the 1960s, 1970s, 1980s, 1990, and the 2000s – raising enough revenue to pay the bills that you KNEW would be coming in the 2010s and beyond.

Do it and apologize for decades of making it appear that saying “no new taxes” and legislating that policy was an honorable thing.

When all it really was was a set up for today’s Medicare and Social Security “deficit crisis”.

Elder Care

Steps for Finding the best Elderly Homecare

Those of us who are fortunate that our parents are still with us face the issue of having to provide care for them as their ability to manage for themselves slowly fades. Despite their slow but steady loss of their abilities of independent living many are, understandably, determined to stay in their own homes. That’s when the discussion of alternatives, including homecare, becomes unavoidable for even the most independent minded folks.

Homecare provides people the advantage of staying in their homes and maintaining independence, while providing required medical care.  Elderly homecare may be necessary for a variety of persons, such as those with acute injuries (hip replacement), and chronic ones (stroke).   The skills required of homecare providers vary as well.

Types of Homecare Personnel

Homecare aids:  Certified Nurse Assistants, or CNAs, provide assistance in bathing, feeding, hygiene, and toileting needs.  They are generally useful for chronic, long-term care persons.

Registered Nurse:  RNs are able to provide medications, wound dressing changes, and obtain vital signs.  RNs are useful when skilled, acute care is needed.

Therapists:  Physical and Occupational Therapists provide skills for speech and motor rehabilitation when acute care is needed.

Getting Homecare

The National Family Caregivers Association provides information on homecare.  The first step “is to make sure you and your loved one are comfortable with the idea of someone else taking on some of the tasks that you’ve been doing by yourself.”  After that, the specific tasks needed should be determined.  This will help to define the type of homecare personnel needed.

Federally funded programs, insurance, and health maintenance organizations (HMOs) may or may not cover the services you require.  Personal care tasks are usually not covered by private insurance or Medicare.  Long-term-care insurance usually covers services required, but not all Americans have it.  Unfortunately, “more often than not the costs of homecare services will have to come out of your own pocket” (NFCA).

Accreditation of Care Agencies

Some agencies may be accredited, which is a step beyond certification.  Accreditation signifies conformity to national industry standards.  Some well-known homecare agencies that provide accreditation are: the National League for Nursing, the Joint Committee for Accreditation of Healthcare Organizations, and the National Foundation of Hospice and Home Care.

Cost of In Home Care

Agencies vary in their costs.  Visits by RNs and therapists are more valuable and costly than those by CNAs.  Some agencies charge a flat fee for each visit (about $100).  Some have a minimum two or four-hour fee.  Rates may be from $13 to $35 an hour.

Questions to Ask the Eldercare Agency (from NFCA)

  1. Is the agency certified in Medicare and/or Medicaid programs? (if needed)
  2. How long has the agency been in business?
  3. Is the agency accredited by a recognized body?
  4. Is an initial assessment provided to determine if homecare is appropriate?
  5. Are the services you need provided by the agency?
  6. How are employees chosen and trained?  Are background checks mandatory?  Are caregivers given written personnel policies, benefit packages, and mal-practice insurance?
  7. Are emergency procedures in place?
  8. Are any references available from clients?

The National Association for Home Care & Hospice (NAHC) agency locator can be found here.  NAHC home health comparisons, surveys, facts, and statistics can be found here.

Elder Care

How to Find a Nursing Home

Sending a loved one to a nursing home is one of the hardest decisions a person will have to make.  The many options can be overwhelming, and the number of nursing home “horror stories” doesn’t make the choice any easier.  But with research and determination, it is possible to find a good nursing home.

Nursing homes can be like hospitals or like households.  In the hospital-like setting, staff provides medical care, occupational therapy, and speech therapy.  There is usually a nurses’ station on each unit.  In the household-like setting, the environment is much more like a home.  For example, residents can use the kitchens and do activities on their own schedule. (NIA).

Federal law requires certified nursing homes to have at least one Registered Nurse for at least 8 hours a day, 7 days a week.  An RN or Licensed Practical Nurse (LPN) must be on duty 24 hours.  Certified Nursing Assistants (CNAs) are on staff 24 hours a day.


The Centers for Medicare and Medicaid Services (CMS) inspect the more than 15,000 nursing homes in the United States.  If the nursing home doesn’t pass inspection, it isn’t certified.  The nursing homes are then ranked based on health inspection, staffing, quality measures, fire safety, and payment options, with a score of one to five stars.  The Medicare and Medicaid government website to compare nursing homes in your area is found here.

Only the top 10% of nursing homes in each state are given a five-star rating.  However, this could be misleading the data gathered are from a short period of time.  Additionally, many four-star nursing homes could be very similar to five-star nursing homes, just a couple points shy of the 10% cut-off.

The website provides information on nursing home comparisons, checklists, payment options, resident rights, and other useful information.  They also offer a useful brochure and nursing home checklist.

The Visit

One of the most important parts to choosing a nursing home is visiting it.  Even if a nursing home looks good on paper, if it smells like urine it may not be a good choice.  It is important to observe the staff and their interactions with each other and with the residents of the nursing home.  After your first visit, make a second visit unannounced, but at a different time of day than you did before.  Observe residents at mealtime to see if they like the food they are eating.  (NIA).

During your visit, has a list of things to look for:

  • Are there unpleasant odors?
  • Are residents clean, dressed, out of bed, and interacting with staff?
  • Is the noise level unusual?
  • Does the facility look clean?
  • Does the home seem like a safe place to live?
  • Are residents involved in activities?
  • Are staff visible, helpful, friendly?
  • Does the home “feel” warm, as a home should?

It is a good idea to meet with the head nurse and physician if possible, as well as the director of the nursing home.  If they are constantly unavailable or unable to meet with you, it could be a bad sign.  Also talk to the nurse assistants, dietary staff, and activity directors.

Ask the nursing home what percentage of staff leave each year.  30% is considered normal, 50% may be a bad sign.

“Person-centered care” and “consistent assignment” are two terms that may signify the nursing home is a good choice.  Person-centered care means that the nursing home residents are able to eat and sleep on their own schedule, not according to the wishes of the staff.  Consistent assignment means that the same staff members are taking care of the residents everyday.  This promotes deeper and more engaging relationships between the staff and residents, and is also thought to decrease turnover.


Medicare only pays for medically necessary care in a nursing home (IVs, physical therapy).  It does not cover custodial care (bathing, eating, assisting).  Additionally Medicare only pays for the first 100 days in a skilled nursing home.  After that, Medicaid may pay for long-term programs, but there are many rules to qualify.

Medicaid provides benefits to those with low incomes, and may help pay for a nursing home.

Some pay privately with their own savings, and then use Medicaid when needed.  If you suspect this may happen, make sure the nursing home accepts Medicaid.

Another payment option is long-term care insurance, which is purchased privately and can pay for part of the nursing home cost.  The benefits vary.  (NIA).


An ombudsman is a federally funded advocate of nursing home residents.  They will be able to provide nursing home rankings in addition to those done by Medicare.  You can find your state ombudsman here.

Elder Care

Protecting the Elderly from Heat Stroke

The National Institute on Aging (NIA) lists the following health-related factors that may increase risk of hyperthermia (high body temperature) in the elderly:

  • Poor blood circulation and inefficient sweat glands
  • Heart, lung, and kidney disease
  • Salt-restricted diet due to high blood pressure
  • Inability to perspire caused by diuretics, sedatives, and some blood pressure medications
  • Being very overweight or underweight
  • Drinking alcohol
  • Being dehydrated

The NIA says that older people should stay inside when it is hot and humid, especially if there is an air pollution alert.  It is crucial that people without air conditioning or fans go somewhere that has air conditions.


Heat cramps result in painful tightening of muscles.  They are the first signs that your body is too hot, and needs fluids.

Heat syncope, or dizziness, can occur when people are taking a beta-blocker for their heart and are not used to hot weather.  Putting one’s legs up and resting will stop the dizziness.

Heat exhaustion is the last stage before heat stroke.  It is a warning sign that your body cannot cool itself anymore.  Symptoms include thirst, dizziness, weakness, nausea, and profuse sweating.  Body temperature will remain normal, but skin becomes cold and clammy.

Heat Stroke

Heat stroke results when body temperature reaches above 104 degrees Fahrenheit.  Symptoms include confusion, combativeness, strong rapid pulse, lack of sweating, dry flushed skin, faintness, staggering, and possible coma.  People with heat stroke must seek immediate medical attention.  While waiting for help to arrive, move the person to a cooler place and offer fluids (but not alcohol or caffeine).  Apply cold, wet cloths to the wrist, neck, armpit, and groin, or help them take a shower.

The NIA says:  “Hundreds of people die from hyperthermia each year during very hot weather.  Most are over 50 years old.  The temperature outside does not have to hit 100 degrees Fahrenheit for you to be at risk for a heat-related illness.”

Elder Care

Family Caregivers

When elderly parents or loved ones age, their needs may become more demanding. But sometimes when help is offered, elders may feel reluctant to take it.  Recognizing that help can make a difference in both people’s quality of life may make people more open to receiving help.  After all, asking for help is a sign that you truly have a grasp of your situation, and you know exactly what needs to be done.

Family Caregivers

The National Family Caregivers Association connects caregivers to each other and disseminates caregiving research and information.  Family caregivers are family, friends, partners, and neighbors.

The National Alliance for Caregiving reports “More than 65 million people, 29% of the U.S. population, provide care for a chronically ill, disabled, or aged family member or friend during any given year and spend an average of 20 hours a week providing care for that loved one.”

Suzanne Mintz, President/CEO of NFCA says, “Caregiving is very lonely.”  Caregivers can feel very isolated, especially when dark emotions or thoughts enter their minds.  The NFCA gives comfort by connecting caregivers to each other, allowing them to communicate feels of frustration or sadness in a healthy way.

The National Alliance for Caregiving and Evercare reports that caregivers form a workforce that provides $375 billion a year of unpaid care.  This is almost twice as much as the amount spent on homecare and nursing homes combined ($158 billion).

NFCA research efforts have focused largely on family caregivers who provide a significant level of care.  For more information on research efforts, click here.

Caregiver Wellbeing

Many people choose to be family caregivers either because they cannot afford otherwise or because they feel they cannot entrust the care of their loved one to someone else.  Their lives are often altered, with six in ten caregivers being otherwise employed.  Stress, depression, and poor diet are common in many caregivers.  It is important for caregivers to take care of themselves as much as possible, although this is easier said than done.

The NFCA provides these ten tips for caregivers:

  1. Caregiving is a job and respite is your earned right.  Reward yourself with respite breaks often.
  2. Watch out for signs of depression, and don’t delay in getting professional help when you need it.
  3. When people offer to help, accept the offer.
  4. Educate yourself about your loved one’s condition and how to communicate effectively with doctors.
  5. There’s a difference between caring and doing.  Be open to technologies and ideas that promote your loved one’s independence.
  6. Trust your instincts.
  7. Caregivers often do a lot of lifting, pushing, and pulling.  Be good to your back.
  8. Grieve for your losses, and then allow yourself to dream new dreams.
  9. Seek support from other caregivers.  There is great strength in knowing you are not alone.
  10. Stand up for your rights as a caregiver and a citizen.
Elder Care

Monitoring Technologies for the Elderly

QuietCare is a home health alarm system provided by ADT Security Services.  Its wireless sensors track the movements of elders in their homes without video cameras.  The software allegedly is able to determine if the person got out of bed in the morning, ate, and taken their medicine. Changes in the resident’s activities are analyzed, and caregivers can be alerted if there are problems.  Operators at the 24-hour call center are trained in emergency situations.  Installation is $199, and the monitoring begins at $79.95 a month.

Medical Alert is a elderly monitoring system that provides help “at the push of a button”.  The system allows you to communicate with “a professional monitoring team member” who can dispatch EMS.  They also inform the EMS of existing medical conditions, and say this information is “kept strictly private.”  The company says that the self-installation takes 5 minutes.  It includes a base unit that is connected to the power and phone line, and an emergency button that can be used on the wrist or as a clip-on.  There is a $29.95 per month monitoring fee.

Six out of 10 people with Alzheimer’s disease will wander and become lost.  The Alzheimer’s Association Safe Return program connects those who have become lost with their caregivers.  It provides identification products (necklaces, bracelets, wallet cards, and clothing labels) with the toll free 800 number to a national information and photo database.  Anyone who finds an Alzheimer’s patient can call this phone number, and the caregiver will be notified.  There is a $40 registration fee.

“Granny Cams” in Nursing Homes

According to the National Institute of Health, there are 1.6 million Americans in nursing homes.  Recent horror stories about nursing home neglect and abuse has prompted a broad coalition of advocates who are calling for a federal law mandating the installation of a “granny cam” in nursing homes.  These advocates believe that it will prevent abuse of the elderly by their caregivers, but many nursing homes are saying it is an invasion of the elderly residents’ privacy.

“The federal government estimates that violations in <25% of homes substantially harm residents” (NIH).  Advocates of a federal law that allows cameras to be installed say that it would only be done with the permission of the resident, and that caregivers would be made aware of the camera.  The cameras cost $200 to $500, and would be paid for by the families of residents.

“With nursing home patients expected to increase by 350% to nearly 6 million by 2040, nursing home care needs to be improve, and maybe the ‘granny cam’ is the way to do it” (NIH).

Future Developments

Researchers at the University of Houston’s College of Technology are designing “an affordable in-home health-monitoring system that will notify caregivers, via smartphones or PDAs, if their loved ones need attention.” (UH).

The system monitors vital signs (blood pressure, temperature, pulse, and respirations) and location of the person by a sensor the size of a quarter.  There would be a few sensors in various rooms that would communicate with the sensor the person is wearing, as well as a central hub.  This would be connected to the Internet and send alerts to the caregiver’s smartphone or PDA.

The system uses off-the shelf technology, which makes it affordable.  Researchers say that $1000 could wire an entire house.  It is also designed to be easy to use.

Elder Care

Promoting “Good” Days for People with Dementia

The Alzheimer’s Foundation of America says that sticking to a daily routine for people with Dementia is a necessity.  It helps both the Alzheimer’s person and caregiver to get through the day easier, and it helps to maintain the abilities of the person with Alzheimer’s.  For example, involve the person in their usual habits, and do not disrupt their usual routine.  In addition to maintaining their skills and activity level, participating in daily activities can relieve tension for those dealing with dementia.

Understanding the Behavior

According to the Alzheimer’s Association, Alzheimer’s disease can cause unpredictable and different behaviors, such as aggression and anxiety.  These reactions can cause misunderstanding, tension, and frustration with caregivers.  The Alzheimer’s Association lists the following possible conditions as being responsible for behavior: physical discomfort, overstimulation, unfamiliar surroundings, complicated tasks, and frustrating interactions.  They recommend this three-step approach:

  1. Identify and examine the behavior, including what happened just before it occurred.
  2. Explore potential solutions, such as the needs of the person with Alzheimer’s and the possibility of adapting surroundings for their better comfort.
  3. Try different responses, if your response didn’t help the first time.


Aggressive behaviors may be verbal, physical, or both.  They may occur suddenly without reason or as a result from a particular situation.  The best way to deal with aggressive behaviors is to identify the cause, and then make necessary changes.

The Alzheimer’s Association makes the following suggestions for how caregivers should respond to aggression in people with Alzheimer’s:  Identify the immediate cause, focus on the person’s feelings, not facts, do not get angry, limit distractions, try a relaxing activity, and shift the focus to another activity.


People with Alzheimer’s may not recognize people or places that use to be familiar to them.  They can become confused easily, and forget what they are doing in the middle of an activity.  The best way to respond to a confused Alzheimer’s person is to stay calm, respond with brief explanations, show photos to spark memories, and try not to take their forgetfulness personally.


Sometimes, people with Alzheimer’s may become suspicious and paranoid of people around them, may make false accusations, and may misinterpret what they see or hear.  The best way to respond to this is do not take offense, be reassuring, don’t argue or try to convince, and offer simple answers.

Overall, the most important thing you can do for a person with Alzheimer’s disease is to be there for them and provide unconditional love.  Having a calm, stable, and predictable environment will reduce behavioral problems.  Involving them in daily activities will maintain their abilities and reduce anxiety.

Health and Healthcare

Medical Bills and Bankruptcy

The Physicians for a National Health Program (PNHP) highlights a 2007 Harvard study of bankruptcies as a need for national health insurance.  The study, published June 4 by the American Journal of Medicine, found that “half of U.S. bankruptcies, affecting 2 million people annually, were attributable to illness or medical bills.”  About 78% of those bankrupted by illness were insured when they became sick, but became bankrupt due to gaps in coverage (co-payments, deductibles, uncovered service.)  And 60% of those with insurance had private coverage, not Medicare or Medicaid.

PNHP says there are two main causes for medical bill bankruptcy among the insured.  Larger co-payments and deductibles by employers cut back on coverage.  Second, although the COBRA law allows people who have lost their jobs to keep their coverage, their premiums are often unaffordable.

A 2009 CNN article on the same study says that 60 percent of personal bankruptcies are a result of medical bills.  Steffie Woolhandler, M.D., of Harvard Medical School says “If an illness is long enough and expensive enough, private insurance offers very little protection against medical bankruptcy.”  The study deemed the bankruptcies “medically related” if the individuals had greater than $5,000 in medical bills, mortgaged their home to pay medical bills, or loss a significant amount of income because of illness.

This study is significant because medically related bankruptcies have been rising steadily, up from 8% in 1981.  The middle class is seeing most of this occurrence, as “two-thirds owned their home and three-fifths had gone to college” (Businessweek).

Peter Cunningham, Ph.D., a senior fellow at the Center for Studying Health System Chang, says “Medical bills and medical costs are an issue that can very easily and in pretty short order overwhelm a lot of families who are on otherwise solid financial ground, including those with private insurance.”

The PNHP says “while politicians acknowledge the need to cover the insured, they have ignored the worsening plight of those with coverage.”  Dr. Woolhandler says “Covering the uninsured isn’t enough.  Reform also needs to help families who already have insurance by upgrading their coverage and assuring that they never lose it.”

Health and Healthcare

Overview on Long Term Care Insurance

Long-term care insurance, or LTC, is an issue that many aging, retirees, and families are concerned about.  Often the cost of nursing homes or home aids creates a financial strain on families.  A private room in a nursing home costs $219 a day ($79,935 a year).  Assisted living facilities cost $37,572 a year (AARP).  Long-term care insurance is a relatively new program that seems to be a valuable option for some.

Medicare doesn’t cover LTC.  Medicaid does cover LTC, but is only for individuals who have little money left.

A longitudinal study of policyholders who were receiving services found that most satisfied with their providers, and “nearly all reported having no disagreements with their insurance company.” (KFF).

The Kaiser Foundation, a non-partisan source, says “Middle-income individuals are among those who could most benefit” from long-term care insurance policies, since they are most at risk for having to rely on Medicaid if significant care is needed, and are more able to purchase policies than lower-income individuals.  However, most policyholders are currently above middle-income.

Purchasing a Policy

The Kaiser Commission on Medicaid and the Uninsured provides the following factors to consider when purchasing a policy.

  1. Daily Maximum Benefit Amount:  This amount represents the most amount of money insurance will pay for services on any day, and usually ranges from $100 to $200 a day.
  2. Benefit Period/lifetime Maximum Benefit:  This time represents the length of time benefits will be paid, or the total amount of money available for benefits.  Thus, if an individual receives services at $100 a day, their coverage may last fewer years than an individual receiving $80 a day.  Most purchasers choose a benefit period of 3 to 5 years.
  3. Covered Services:  Most policies cover a nursing homes, assisted living facilities, home care aids, and adult day care.  Most individuals choose a policy with a comprehensive set of benefits.
  4. Elimination Period:  Most policies require a specific amount of time elapse after the individual starts qualifying for long-term care before benefits are paid.  Most policies have elimination periods of 90 days.  Premiums are lower with longer elimination periods, however out-of-pocket expenses are higher when care is required.
  5. Inflation Protection:  There are many options for inflation protection.  A table explaining the options is found here.  Half of individuals choose 5 percent compound inflation protection.

The AARP also recommends that each policy:

  • Does not require hospital stays before receiving benefits.
  • Cannot be cancelled if premiums are continually being paid.
  • Allows you to stop paying premiums once you begin receiving benefits.
  • Has one deductible only.
  • Covers pre-existing conditions if you disclosed them during application.
  • Allows a downgrade in coverage if you cannot afford the premium.
  • Covers dementia.
  • Provides at least one year of nursing care and home health care coverage.


LTC insurance is difficult for individuals who are 70 and older to obtain.  They are deemed high risk and may be denied or charged a very high premium.

A table of 2008 Annual Premiums for $150 per day, 3 years comprehensive coverage, 5 percent compound inflation protection, and a 90-day elimination period is found here.  The table compares costs for married and single people, the age (40, 50, 60, and 70), as well as the three most popular carriers (Genworth, Metlife, J.Hancock).  Premiums range from $1350-1700 for 40-year old singles, $1900-$2100 for 40-year old married couples, $1600-$1900 for 50-year old couples, $2200-$2500 for 50-year couples, $2,150- $2,500 for 60-year old singles, and $3,000- $3,300 for 60-year old married couples.


States regulate long-term care insurance.  Most states have some consumer protection for purchasers.  For example, North Carolina requires that policies cover all pre-existing conditions after six months, offer a meaningful inflation period, and must be guaranteed renewable.

The National Association of Insurance Commissioners (NAIC) established the Long Term Care Model Act and Regulation.  In 2000 it drastically changed the model, adding rules that “place greater responsibility on insurers to make initial premiums adequate, rather than relying on experience after policies are sold to make corrections to the premiums.  A qualified actuary must certify that proposed premiums are sufficient to cover anticipated costs” (KFF).

In 2006, the NAIC added amendments to the Act, to “ensure that long-term care insurance policies would pay for services in facilities in other states, even if the facilities are licensed or registered in a different way from those in the state in which the policy was sold.”


The Patient Protection and Affordable Care Act establishes a Federal insurance program for long-term care for individuals having difficulty with two or three activities of daily living, or for people with severe cognitive impairments.  The name of this program is the Community Living Assistance Services and Support (CLASS), and was originally sponsored by the late Senator Edward M. Kennedy. There is no Federal subsidy for the program, but rather individuals pay premiums to finance the program.  Participants must meet specific work requirements for 5 years before being eligible to receive benefits, which can be used to purchase long-term care assistance.  Premiums vary by year of enrollment and age at the time of enrollment.  The Secretary has set the premiums to ensure the program is solvent for 75 years.

Centers for Medicare & Medicaid Services

Robert Foster, Chief Actuary of the Medicare program estimates that the CLASS Act will provide Federal savings of $38 billion in the first 9 years.  This is attributed to the premiums paid by participants.  However, in 2015 when the five-year window allows some participants to start receiving benefits, “the net savings will decline.”  Furthermore, “In 2025 and later, projected benefits exceed premium revenues, resulting in a net Federal cost in the longer term.”  Expenditures will exceed premiums, making the program “unsustainable.”

Foster attributes the following factors as adversely affecting the CLASS program:  “the program’s voluntary nature, the lack of a Federal subsidy, a minimal premium for students and individuals with incomes under 100 percent of the FPL (initially $5 per month), a relatively high premium for all other participants as a result of adverse selection and the effect of subsidizing participants paying the $5 premium, a new and unfamiliar benefit, and the availability of lower-priced private long-term care insurance for many.”

Additionally, the premiums are a reflection of the costs necessary to take care of individuals with health problems and functional limitations.  This high rate may discourage the average healthy person from participating, which will further increase premiums.  Foster calls this “adverse selection by participants.”  Furthermore, participants are required to subsidize the $5 premiums for students and low-income participants.  Foster says “there is a very serious risk that the problem of adverse selection will make the CLASS program unstable.”

The Heritage Foundation

According to The Heritage Foundation, a think tank for conservative public policies, the CLASS Act insurance program is a “gimmick.” The CBO is estimating payments by participants to be about $70 billion over 10 years, which health law proponents are claiming as deficit reduction.  The Heritage Foundation cites the Chief Actuary, Foster’s, data and concern of adverse selection, saying, “The program will either need to dramatically cut benefits or get a major federal bailout.  Thus, not only is it inappropriate to claim the $70 billion in premiums as savings, but this program will almost certainly become a huge new unfinanced burden on future taxpayers.

Health and Healthcare

The Future of Medicare

According to the Kaiser Family Foundation, “Financing care for future generations is perhaps the greatest challenge facing Medicare, due to sustained increases in health care costs, the aging of the U.S. population, and the declining ratio of workers to beneficiaries.”  From 2010 to 2030, the number of people on Medicare is projected to increase from 47 million to 78 million.  Additionally, Part A Medicare Hospital Insurance Fund will be unable to pay full benefits starting in 2019.

Affordable Care Act

The March 2010 health care reform law, the Patient Protection and Affordable Care Act, “expands prescription drug and prevention benefits covered under Medicare and introduces new programs designed to improve the quality and delivery of care to people covered by Medicare… and includes other provisions designed to slow the growth of Medicare spending and strengthen the solvency of the Medicare Hospital insurance Trust Fund.” (KFF).

The law is said to reduce the average annual growth rate of Medicare spending from 6.8 percent to 5.5 percent from 2010 to 2019.  This reduced spending is said to result from three provisions.  The first provision will stop Medicare from paying substantially more to Medicare Advantage beneficiaries than to traditional fee-for-service beneficiaries.  The second provision will reduce the annual payment increases to health providers.  The third provision will attempt to reform the healthcare delivery system, such as reducing unnecessary hospital readmissions and hospital-acquired infections.  Additionally, an Independent Payment Advisory Board was established to recommend methods to reduce Medicare spending. (KFF).

The blog posted answers to Medicare questions on June 11, 2010.  As a response to questions of Medicare’s solvency, the writers point to the Affordable Care Act and its role in strengthening Medicare financially.  “Over the next 20 years, Medicare spending will grow at a slower rate as a result of rooting out waste, fraud, and abuse.  This will extend the life of the Medicare Trust Fund by 12 years and provide cost savings to Medicare beneficiaries.”  The Affordable Care Act will allegedly be paid fully by reducing waste, fraud, and abuse, and with health care reforms.  The White House says that this law will reduce the deficit by $100 billion over the next ten years.

The blog continues by saying that the Affordable Care Act “builds upon our existing system” of health care.  It also allows States “the option of pursuing their own reform plans, including running exchanges, adopting delivery system reform in Medicaid, and working with local providers to test innovative ideas through the Medicare and Medicaid Center for Innovation.”

The Office of Management and Budget (OMB) is largely in favor of the Affordable Care Act.  They say “there should be no ambiguity about whether we face unsustainably large deficits over the medium- and long-term.  We do.”  The Affordable Care Act, they argue, will “reduce the deficit by more than $100 billion over the next ten years and more than $1 trillion in the ten years after that.” However, they say the “CBO produces its estimates based on what has happened in the past, and we have never enacted such a fundamental transformation.”  Whether or not more action will need to be taken to lessen the deficit after this Act is debated.


The AARP supports the Affordable Care Act and “can say with confidence that it meets [the twin goals of making coverage affordable to younger members and protecting Medicare for seniors] with improved benefits for people in Medicare and needed health insurance market reforms to help ensure every American can purchase affordable health coverage.”

American Medical Association

AMA President J. James Rohack, M.D. wrote a letter to the Senate on March 5, 2010 to permanently repeal the broken Medicare physician payment formula.  He says the AMA “cannot support proposals that aim to address only the most imminent threat to payment levels and patient access, with no regard for the future of the Medicare and TRICARE programs.  We are opposed to further short-term patches of any duration.”  He continues by saying “the proposed 21 percent cut and the continued instability in the system will force [physicians] to limit the number of Medicare patients they can treat, reduce staff and make other tough practice decisions.”

The Heritage Foundation

James Capretta, former OMB Associate Director and current writer at The Heritage Foundation, warns of lower quality and higher costing healthcare with this new law, along with the impact on future generations.  The law is expected to bring 34 million people onto the federal entitlement rolls by 2017, and the Congressional Budget Office says by 2019 “the cost of these ‘coverage’ provisions is likely to escalate very rapidly and in line with the rising costs of existing health entitlement programs, including Medicare.”

Capretta cautions that the CBO’s estimates of national debt are inaccurate.  He names Medicare cuts as one of the reasons for increased spending.  He says “CBO and the Chief Actuary for the Medicare program have both stated that Medicare spending cuts cannot be counted twice—to pay for a new entitlement expansion and to claim that Medicare’s financial outlook has improved.  But that is exactly what the proponents of the new legislation do.  If Medicare cuts and tax hikes for the hospital trust fund (about $400 billion over 10 years, according to CBO) are used solely to improve the capacity of the government to pay future Medicare claims, then the health law becomes a massive exercise in deficit spending.”


As for the real cost of this Medicare, no one can say with certainty what it will be.  The CBO’s initial Medicare prediction in 1965 was $9 billion.  In reality it was more than 10 times that amount.  The government’s predictions cannot necessarily be trusted because no one can predict the extent of Medicare.  Healthy people live longer, thus requiring more years of Medicare.  The only thing that can be said for certain is that it will be limited by money:  there is only so much money to go around, so Medicare will be “rationed” in some way.