Latest Good Reads

Estate Tax Act Includes $3.5m Exemption, 55% Top Rate & 10% Billionaire's Surtax

FICA, Medicare, and Payroll Taxes

Bank Tax: France, Germany and UK, but Where's the USA?

California Heading to the Abyss

$250 Medicare checks begin to be issued

According to CNN Money, one of the first tangible effects of the health care reform law is the fact that the government has begun to mail out $250 checks this week to seniors who fall within Medicare’s gap for prescription drug coverage. Checks will continue to be mailed to seniors falling within this category throughout the year.

The gap or “donut hole” occurs when a senior citizen’s prescription drugs cost too much to be paid for through basic Medicare coverage, but aren’t expensive enough to qualify for other coverage. In addition to a $310 deductible, Medicare beneficiaries pay 25% of their drug costs until the total reaches $2,830 for the year. Then, they fall into a coverage gap. At that point, enrollees must pay all costs out of pocket until their annual expenses exceed $6,440. After that, seniors pay 5% of drug costs for the rest of the year.

What’s the plan for 2011? Seniors who fall into the ‘donut hole’ will receive a 50% discount on brand-name drugs. The discount for generic drugs will be 7%. Those figures will rise over the years, eventually reaching a total 75% discount that effectively will eliminate the gap in 2020.

So, what do you think about this aspect of the health care law…will it really help?

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I'm a Medicare doctor. Here's what I make

We have all heard about how healthcare reform legislation will affect patients, but few have spoken on the affect changes to the industry will have on doctors and nurses. CNN Money.com posted an interesting article examining how the proposed cut of Medicare payments will reduce the income of many doctors in this country. For those of which who are still paying off student loans, these reductions could lower their income to levels comparable of a minimum wage job.

When you think of low-paying jobs, doctor doesn't usually come to mind.

But with a 21% cut in Medicare payments slated to take effect later this month, physicians who say they are making an “OK” living may be reduced to income levels that no longer make their profession viable. That's especially true for those still paying medical school costs and other training.

"The cuts will hit me," said Dr. William Schreiber, a primary care physician based in North Syracuse, N.Y.

Schreiber sees 120 patients a week. About 30% of them are enrolled directly in Medicare, while another 65% have private insurance plans that peg their payments on Medicare's rates. Only 5% pay without the help of an insurance plan.

As a result, Schreiber expects the cuts to take away $3 out of every $5 he currently earns. And, as a primary care physician, he already wasn't earning anything near the salary of a specialist.

Continue reading at CNN Money.com…

Obama Seeks to Rally Senate Democrats on Final Health-Care Plan

From Bloomberg.com:

President Barack Obama plans to head to the U.S. Capitol to press Senate Democrats to agree on health legislation as lawmakers struggle to resolve disputes over issues including a proposed government-run insurance plan.

Democrats met throughout yesterday to seek an alternative to Senate Majority Harry Reid’s plan to create the new national program to cover the uninsured. Opposition within his party leaves Reid at risk of falling four votes short of the 60 he needs to pass the legislation, the most sweeping overhaul of the nation’s health-care system in more than four decades.

Obama’s scheduled visit comes as the bill’s backers need a jolt to come together, said Massachusetts Democrat John Kerry.

“We have to talk about how to put the final pieces together,” Kerry said. “It’s good to hear from the president now, because it’s getting to that stage where you have to come to a decision with your heart as well as your head.”

Reid called the rare weekend session to meet his deadline of getting a bill by year-end. Republicans, unified in opposition, forced the Democrats yesterday to reiterate their support for cutting more than $40 billion in home health-care services funding under Medicare. It was the latest Republican effort to highlight the bill’s potential impact on the elderly.

Recession Hurts Medicare and Social Security

From Reuters.com:

The U.S. Social Security and Medicare retirement and health programs for the elderly will run short of funds sooner than previously thought because the recession has taken a toll on tax revenues, a government report released on Tuesday showed.

The Social Security trust fund will be exhausted by 2037, four years earlier than previously estimated, and the Medicare hospital trust fund will become insolvent by 2017, two years earlier than estimated, said a report by the trustees of the two popular programs.

Labor Secretary Hilda Solis said that "the dual effect of the economy and unemployment has produced a downward pressure on the financial security" of the Social Security program.

The latest report said Medicare's financial problems are more severe than those facing Social Security because of rapidly rising health-care costs.

Treasury Secretary Timothy Geithner said the report shows the urgency for the government to overhaul the two programs to help contain rising costs as the baby boom generation begins to retire and draw on benefits.

"The sooner we come together to make the difficult but achievable changes needed to strengthen the solvency of Medicare and Social Security, the more time we'll give the American people to plan and to adjust, and the sooner we'll be able to ensure that these vital programs will be as important for generations to come as they are today," Geithner, one of trustees of the two programs, said at a news conference.

For years, lawmakers have been concerned about the long term financing of the two programs as the 77 million strong baby boom generation retires.

A push by former President George W. Bush to partially privatize Social Security by creating individual investment accounts failed in the face of stiff opposition from Democrats.

Like Having Medicare? Then Taxes Must Rise

From The New York Times:

Toward the end of Monday’s meetings on fiscal responsibility at the White House, Senator Kent Conrad stood up and produced a little bolt of honesty. “Revenue is the thing almost nobody wants to talk about,” said Mr. Conrad, the chairman of the Senate Budget Committee. “But I think if we’re going to be honest with each other, we’ve got to recognize that is part of a solution as well.”

Mr. Conrad’s frankness was delivered in the cryptic language of budget experts, and many people might have missed the point. So allow me to translate:

Your taxes are going up.

They will probably go up in the coming decade, and the increase will be permanent. For a half-century, federal taxes have remained fairly constant relative to the size of the American economy — equal to about 18 percent of gross domestic product. But the 18 percent era has to end soon.

It won’t end because President Obama is some radical tax and spender, either. It will end because of a basic economic reality.

Americans have made it clear that they want a certain kind of government, one that can field a strong military and also maintain popular programs like Medicare. Yet we are not paying nearly enough taxes to maintain those programs. Even major changes to the health care system — the single most important step for closing the budget gap — will not close it entirely. Taxes must rise, too.

Republicans agree, even if they do so with euphemism. “We are on an unsustainable path,” says Peter Orszag, Mr. Obama’s budget director. Judd Gregg, the ranking Republican on the Senate Budget Committee, has said, “Revenues are going to have to go up.” Douglas Holtz-Eakin and Dan Crippen, budget experts who advised the McCain campaign, have quietly acknowledged the same.