Third Party & Independents Archives

Who should pay for our social safety net?

I want to have a social safety net.
I’ve been to cities with shantytowns on the side of the highway: dirt roads with donkeys pulling carts, unstable homes made of sheet metal and who knows what, people trying to live under traffic overpasses… These cities have millions of people. These cities are modern. Despite what many Americans may think, these cities have everything that we have. But, they also have a much wider range of living conditions and prosperity.

As corporations begin shedding their traditional roles in the name of "Wall Street expectations" and the government strives to cut "non-security discretionary spending", I find myself wondering "What's going to happen to our social safety net and who should have the role to maintain it?"

I realize some of you do not even see the need to have a social safety net.

  • "I'm able to do everything myself, why can't they? They must be doing something wrong. They must be lazy."
  • "I just know a majority of them are abusing the system and stealing my hard earned money."
  • "Maybe the society would be better off if they did die."
I don't know what your actual thoughts are (and I hope that last one isn't true), but I plan to try to convince you that there are reasons beyond mere compassion in a future posting.
For now, I want you to humor me and accept the premise so we can talk about Who and How.

I work for a large, healthy company recognized for its excellent benefits. I'm not sure what year it started, but these benefits are reduced every few years. The first salvo was the introduction of network providers and a change in covered procedures and drugs. Since then, the changes were phased in gradually, but here's a partial list of the reductions:

  • Newer workers will receive a reduced, lump sum, portable pension instead of the previous annuity
  • Health benefit administration has been turned over to HMOs
  • For some complicated diagnoses where non-generic drugs are covered, a "phased approach" has been implemented to prove the generic drug won't work as a substitute
  • Employees and retirees are required to pay new premiums and deductibles…
We still have great benefits. The company benchmarks agains other companies and they show us how great we still are every time a change is made. They don't understand that this benchmarking data doesn't really help. "We're not alone. Woo hoo!"
... Well, that's not true - it helps a little. I do feel bad even complaining. I think my coworkers do too. We know that we're lucky. I just want the same for the rest of the country.

The pressures from Wall Street are so pervasive that they have become assumptions. Owing pensions and benefits to workers and retirees is a cost that should be shed. (Somehow, excessive executive compensation – also arrived at through benchmarking – does not cause analysts the same worries…) Having the "baggage" of long-term commitments to workers and retirees can be dangerous to a publicly traded company. There is great pressure to get out from under this weight. "Don't pay those people, use the money for dividends."
I don't think you need proof of this attitude, but I did a quick internet search anyway.
Morningstar Business Wire and
ABC News.

Now, the attitude is so pervasive that some government agencies are doing the same.
Yahoo/Associated Press.

Some areas of the government are not…
Fox News.

At first, all of this made me angry at companies, at Wall Street.
Lately, I'm wondering "Why is this their job?" Their goal is supposed to be their profit, their stock. Yes, they want to differentiate themselves and attract good people. But they also have the pressures of competing against companies based in countries that provide for all and those in countries whose workers expect very little. These competitors can use their resources in other ways. Is it any wonder that US companies are jealous? That they're outsourcing?

I'm beginning to realize that their role in providing for us has definitely allowed us to comfortably live with our notions of "personal responsibility". People that work for good companies enjoy this system. They're receiving subsidized healthcare and wages that allow them to put money aside for the future. They don't want to wait in line with "the rabble" if they need a medical procedure. They don't understand why everyone can't earn as much as them. They don't realize (or care?) that they're mainly lucky, not just smart. It's similar to the correlation between property taxes and schools. People living in affluent areas want all of their resources to flow to their own children which sets them up for future success… Everyone does not start out on the same "line" and our advantages tend to perpetuate themselves.
Is providing for our health and long-term security really the role of the companies we work for? With the new Wall Street mentality, are they even capable of continuing to do it?

Failed businesses are bankrupting the Pension Benefit Guaranty Corporation (which insures corporate pensions.)
To address this, Congress is working on an amendment to the Employment Retirement Security Act of 1974 (HR 2830) that will require companies to fund their pension obligations. I do support this if it's done right – corporate scandals have left taxpayers paying pensions for the workers of corrupt companies. I'm sure the many Americans who have never been offered a pension do not even want to help with the innocent "no fault" ones. I'm just a little worried because it seems like this may provide the excuse for further reductions or a freeze in the plans… it could be another part of the master plan to further reduce employee expectations. Hopefully, I'm wrong about that – negotiations are still ongoing.
Detroit Free Press and
Fox News.

As someone who lives in South Florida, I also wonder if all insured companies have been hit with huge premium increases even though they've made no claims…

Health insurance coverage is another hot issue. The Health Insurance Marketplace Modernization act, recently stopped in the Senate, would have allowed small businesses to obtain group rates insurance rates. Unfortunately, the bill also exempted these plans from complying with state regulations mandating that specific procedures be covered.
ABC news,
Fox News, and the
Sun - Sentinel.

Why does it seem like every plan to help us also includes some provision that will lead to lessened expectations?

We are in the middle of a culture change.
The current policies of our government and our corporations lead towards the reduction of their traditional roles and increased responsibility of the individual to provide for their own future. The government has provided us with some new savings mechanisms to help, but you have to make an adequate wage for these to provide any benefit.

I think the social safety net is in trouble. Individuals are increasingly fending for themselves, some with reduced wages. Putting the social safety net in the hands of the government may go against our "national story" of individualism, but I think the government would be a more equitable owner than our employers - provided our employers continue to contribute and the government is adequately funded... Unfortunately, I think this may be where the whole premise falls apart. I did find that our overall level of taxation is relatively low but I'm worried that corporate subsidization of the social safety net probably adds up to a lot more money than the bureaucratic VAT we're avoiding….
Fox News.

If we could get over that part, I don't think our country would be hurt. Companies can pay higher wages to attract and retain good workers. People don't need to have their health and security on the line in order to continue to compete or to try to gain and propagate their advantages.

I'm also not recommending any of the models that already exist elsewhere. We need to create our own comprehensive system. I realize that there are a lot of entrenched and conflicting interests. Every conversation about any of the programs devolves into partisan bickering. Most people feel so defeated that any hope for an overhaul probably seems unconscionably naïve… But our national story emphasizes our innovation and personal excellence. Those who believe that should be most optimistic about putting these formidable strengths to use.

Posted by Christine at May 16, 2006 5:07 PM
Comments
Comment #148729

We should, all of us, voluntarily.

By voluntarily, I mean though charities and good old fashioned caring about the people who are in need, not the old tried and failed method of taking money at gunpoint from American citizens and throwing it at people whether it’s what they need or not with no personal interaction.

But, I figure I’m probably in disagreement with the Author on this since it isn’t even considered in the article.

Posted by: Rhinehold at May 16, 2006 6:25 PM
Comment #148731

Rhinehold, charity is nice, but it doesn’t do the job. It’s a dodge of the issue.

I agree with her point, we (the bulk of the working public) are subsiding the wealthy here. It’s hidden, It’s not talked about. It’s played as the need to be competitive. It’s not played as piracy by Wall Street or Incompetence or malfeasance by corporate management.

When the bulk of the wealth is produced by the workers, why does the bulk of the wealth end up in the hands of the elite few? Shh! These people might wake up and realise that capitalism isn’t a solution to everything. Socialistic principles might not actually be that evil communist thing!!!

Alert! Alert! They figured it out! Send in the troops and wash away those Hoovervilles.

Posted by: gergle at May 16, 2006 6:44 PM
Comment #148747

Rhinehold -
I’m happy to meet someone even more optimistic than myself and I do personally contribute to multiple charities…
Unfortunately, altruism has been an option for a long time and it hasn’t been popular enough to overcome individual self interest or solve the problems I was discussing.
Christine

Posted by: Christine at May 16, 2006 7:47 PM
Comment #148749

Which social safety net are you talking about? The one for those who can’t do for themselves or is it a broader one that includes those that can, but it is just harder.

If the former, we as citizens have to take responsibility for it in one way or the other. I think Rhinehold’s solution is the best one. It’s only not good enough because it’s competitor is so much easier. However, assuming that a complete rejection of government involvement is out of the realm of possability for those who can’t do it for themselves, then the government should provide in more creative ways that encourages more direct participation from the citizenry. The funding is ours ultimately, but I would encourage the administration be moved back to the State level where more creative solutions are possible.

If the latter group, those that can do it, but it is just hard. Then the people have the first responsibility. Government can incent people to do better planning through tax exempt and tax deferred accounts. It can also incent companies to do better planning through similar programs. But as you point out, ultimately with globalization, companies will have less incentive, and less opportunity to contribute as much for their employees, so the people will need to learn to do more for themselves.

Posted by: Rob at May 16, 2006 7:49 PM
Comment #148777

Christine - good thought proving post. When you say our safety net do you mean welfare, corporate welfare,health insurance, social security, medicare & college grants and loans ? Social security at one time was self sufficent, then it was raided and raided. Now we the people will half to bear the burden to prop it up or drop it and watch our neighbors suffer. Health Insurance that was provided by employers wont make it into the future, it must be dealt with in a different way. Having been accused of being a socialist because I have a high opinion of FDR and his policies I think “socialized” medicine is fine. Ran by the states, paid for by everyone including corporations. However,I dont forsee this happening for another 40 years or so in this country.

Posted by: j2t2 at May 16, 2006 9:25 PM
Comment #148803

Christine,

The dirty little secret is that when people feel that others are in need, they pull together in amazing numbers to help.

I can give you example after example of this.

It’s not that ‘people are charitable enough’, it’s that they don’t want to help, with money, people who they feel is not in true need.

The problem with our current ‘social programs’ is that they are all too encompassing, they require no attempt at self help before being funded and when people are taxed at about 30-40% of their income at gunpoint why should they go that extra mile?

Most people need personal interpersonal assistance much more than monitary assistance. Where is the government in providing this?

Why is it that after increase upon increase in social redistribution programs over the past 80 years, to nearly 60% of the national budget from 3, are more and more people not getting ‘the help that they need’, giving the democrats that talking point to keep or retake power when necessary?

Oh yeah, because expousing ‘compassion’ with other people’s money is easy. Doing it with your own time is hard.

I do the hard work, I help people the best way I can when I can. I don’t want to throw money down a bottomless pit that does little to help anyone long term.

Posted by: Rhinehold at May 16, 2006 11:17 PM
Comment #148812

Ever figure that the insurance companies, not Wall Street are the reason behind so many companies cutting health benefits? They’ve raised premiums so high that it takes an arm and a leg to pay them.
And the reason for this is because the health care providers have raised their fees so high that the insurance companies are having to raise their rate.
The worst thing to happen to health care is health insurance. The providers figure that the insurance companies have an endless supply of money and over charge for services. The patients aren’t paying out of their pockets so the either don’t pay attention to what’s being charged or don’t care.
But everyone sure cares when they have to pay more for insurance, and have higher deductibles.

Posted by: Ron Brown at May 17, 2006 12:16 AM
Comment #148825

Ron, if you think the insurance is expensive try going to a hospital without insurance, they charge the indivdual 2 to 3 times what they charge the insurance company.

Posted by: j2t2 at May 17, 2006 12:56 AM
Comment #148827

Because the hospitals are so caught up on being for profit corporations they dont share their resoures. As an example in a town the size of Denver there is 3 or 4 competing hospital chains. They are going after the same business for the most part. They each need all the big expensive technologies and equipment. What if they could cooperate and share these services? What if in Denver there was 1 or maybe 2 MRI’s that were used by all doctors, hospitals etc.

Posted by: j2t2 at May 17, 2006 1:04 AM
Comment #148851

Ron thanks for continuing the myth of free market health care, rather than the govenment subsidized and legal oligopoly industry we now have.

Tell me, Ron, how do YOU pick the best healthcare for yourself and decide between surgeons, hospitals and procedures?

Rhinehold, which private charity helped eliminate the Hoovervilles of the depression again? This is recyled Laissez faire B.S. I can’t wait for the results of these economic theories being espoused: The Great Depression II.

Posted by: gergle at May 17, 2006 4:22 AM
Comment #148854

I wonder if anyone else has seen the Frontline program about retirement planning and the 401K game.

It’s way past time for Americans to recognize what is being done to them. The robber barons are back. They have invested greatly in think tanks, lobbies, Radio talk and Republicans to be their frontmen. When they bankrupt you they will buy your property and labor at cents on the dollar while you die in the streets. When you threaten revolt they’ll be long gone and let the slow movement of democracy heal you back up, until your ripe for the harvest again.

I’m not a socialist.I believe in the policies of someone like Jesse Jones. Gov’t should help the impoverished and make a profit at the same time. However, if someone doesn’t control the thieves, there will be nothing for anyone, but them. I just hope we don’t have to go through the Depression again to realize this. South America and the middle east is listening to Socialists and Tyrants like Europe did because of them.

Posted by: gergle at May 17, 2006 4:38 AM
Comment #148865
Send in the troops and wash away those Hoovervilles.

C’mon gergle: Get With The Times! Post-Katrina, they are called Bushvilles, now…


No Government which does not Serve The Needs Of Its Citizens has any claim to Existence. Only Governments which Serve The Needs Of Their Citizens have a right to Exist.

Posted by: Betty Burke at May 17, 2006 6:54 AM
Comment #148904

“Putting the social safety net in the hands of the government may go against our “national story” of individualism, but I think the government would be a more equitable owner than our employers”

Um, you left out the most important aspect…the individuals themselves.
Why should govt or employers be held in contempt while the employees themselves go out and buy a new vehicle rather than save up for expenses?
Too bad “keeping up with the Jones” doesn’t apply to insurance policies and retirement savings.

“Only Governments which Serve The Needs Of Their Citizens have a right to Exist”

So what happens when govt only serves half of their citizens Betty?
Was like that in the 90’s and is like that now.

Posted by: kctim at May 17, 2006 9:53 AM
Comment #148929

j2t2
I don’t know about that. My wife recently had minor surgery done. The total bill was $6895.23 the insurance company paid $5800.00 leaving $1096.23 for us to pay. The hospital cut that in half because it was coming out of our pockets.
My neighbor who has no health insurance had major surgery around the same time. Her bill was around $8000.00. And the hospital is letting her make payments. If she had insurance the hospital bill would have been around $16,000.00. That’s what another friends bill was for the same surgery about a year ago with insurance.


gergle

Tell me, Ron, how do YOU pick the best healthcare for yourself and decide between surgeons, hospitals and procedures?

Most likely the same way you do.
Only I have the added burden of trying to find the best health care plan possible at the lowest cost possible for 56 employees. That aint easy.
That’s why I’m for the bill I hear is in Congress that will allow small business to pool their resources and shop for health care collectively.

Posted by: Ron Brown at May 17, 2006 11:42 AM
Comment #149051

I hope you don’t mind a long combination response…

gergle: Thank you for saying what I am thinking so often

Rob, j2t2 and Rhinehold:
Your questions are good ones. Unfortunately, I don’t have an actual proposal… I downloaded the budget details to look through them because I thought it might help…
http://www.whitehouse.gov/omb/budget/fy2006/
It didn’t. What I know is this.
There are a lot of separate programs, tax credits, subsidized loans, grants, etc…
Social Security is not the only trust fund being raided.
And to be honest, I often share Rhinehold’s pessimism about the government’s performance, functioning and priorities myself…
It’s just that I also see a rising level of inequity and a reducing level of support from all sides. To me, the government (federal, state or local) is the only entity we have that can bring some balance to everything - get us to share, convince us to think of the long term…
I don’t know. I wish forceable balancing wasn’t needed but I think it is.

kctim:
Good point. The debts and short term thinking of many people is a big part of the problem that is getting bigger and I don’t know how to weed them out when I want us to help people.

Ron Brown and j2t2:
I agree that there is some sort of conspiracy with health care pricing. j2t2 has a good reason for high prices but it seems like more than that…
I don’t think that means that insurance companies are causing this pricing problem though. As businesses representing many clients, they should have more bargaining power and resources at their disposal to change things than any individual ever could… I don’t understand why they put up with this.

Thanks to all for your comments
Christine

Posted by: Christine at May 17, 2006 7:25 PM
Comment #149054

when, i bill a insurance company for services,i take it in the arm.i could bill for a million ,but they only pay the contracted rates, which are about 65% less, than my cash paying patients,Ron, some of those companies pay me only $25 for a comprehensive eye exam, and $35 for a frame and $35 for optical lenses,ive only been in this gig for 11 years. some of the old doc’s tell me in the 1960s and 1970s and 1980s when cash was worth something for both sides, they would have a line 30 ft long with people waiting for eye exams and glasses. i don’t know if you had any Earl scheib paint centers where you live, but in california they were everywhere, in the 1960s thru 1980s. he would paint any car for $59.99 back in 1980.and do a good job! made him millions. and he paid his painters union scale back then! believe me, both sides got a fair deal back then! the insurance companies are making the big dough today.

Posted by: Rodney Brown at May 17, 2006 7:36 PM
Comment #149070

also, to encourage more business, a lot of opticians and eye doctors in my area have reduced our prices 25% to 35% for cash paying patients. ha ha don’t tell anyone! but they save more, no more costly vision plans, and the opticians and doctors also do better. take the big boys out of the equation.

Posted by: Rodney Brown at May 17, 2006 8:23 PM
Comment #149071

Ron, wouldn’t you be for detaching healthcare from employment all together?

Thanks for the non-answer on making healthcare choices. The truth is you or I do not really have choices. We can select healthcare plans by cost and deductibles, but little else. We have no tools to analyze them. There is no free market place for us to evaluate them. The pooling idea is great except for the section to lose the state restrictions on benefits. Perhaps you have such a fine understanding of contract law and healthcare that you are competent to then make educated choices, but most aren’t. The problem, Ron, is that this is a highly technical and regulated field NOT predisposed to free market babble.

You may have the resources to make up for a blunder. Your employees likely won’t. If your going to regulate the industry supply and demand then you’ve also got to regulate costs. If you prefer free markets then let any wacko put up a shingle and allow people to die and be maimed until free market forces weed them out. I think they used to call this patent medicine. I wonder why it went the way of the dinosaur?

I actually don’t advocate making it a government agency. I just think a single payer system that allows for real choice by operating a real evaluation system is due. If another payer can compete effectively without cherry picking patients, then fine. The very basis of the insurance industry, as it is, is destroying healthcare. People cannot choose their health risk.

The AMA complains that patients aren’t knowledgable enough to evaluate hospitals and doctors, then let a panel of doctors and acctuarials free from lawsuits and political pressure set up evalutaion methods. Then let the market choose the ones that succeed and fail.

Health care has far outsripped the CPI precisely because it is not regulated by the free market. Remove the oligarchies who control it and replace them with effective free market tools. Real pooling of patients, freedom from employment constraints, freedom from AMA self regulation. While were at it, remove drug company lobbies from K street. We don’t really need 10 forms of Viagra do we? Warning: erections lasting more than 4 hours should drive your woman wild. Nuff said?

Posted by: gergle at May 17, 2006 8:30 PM
Comment #149093

Betty,
I was watching Cokie Roberts recently subbing for Charlie Rose discussing NGO’s and that she had been to Banda Ache and Pakistan recently and was amazed at the progress they have made as opposed to the Katrina Coast which still looks bombed out. The guest attributed it to …guess… questionable contracts for the cleanp.

If Bush were any more inept, I’d swear he was a plant from Al Qaeda.

Posted by: gergle at May 17, 2006 9:59 PM
Comment #149122

Rodney
Then why do you take their insurance?
I’m all for taking the insurance companies out of the equation. What I’d like to do is have health savings account where my employees an I pay in what we would for health insurance. Then they can go to the doctor of their choice. But I can’t find any banks around here that will let me open one for the company.


gergle
I really don’t mind supplying heath insurance for my employees. They can get it cheaper through the company than they can individually. But I’d rather, like I told Rodney, have a health savings account for them. This would get the insurance companies out of the equation.
And no I’m not an expert on contract law. That’s why I have a lawyer that is. And she’s damn good at it too.

Posted by: Ron Brown at May 18, 2006 12:10 AM
Comment #149146

Ron, in a nutshell, it,s become almost a nessecary evil, i am a abo optician my specility is very low vision, in my lab i can generate or surface, any type of lens a md. or od. can prescribe ,myope, i can go up to -30.00 of sphere diopters. hyperopia,i can go up to +35.00 of sphere diopters, astigmatic, i can go as high as - 12.00 of cylinder with a cylindrical axis from 1 to 180 degrees. prism i can induce up to 20.00 diopters of vertical and horizontal prism. and any million combinations of the above.you with me. let’s say you go to blaa blaa blaa for your glasses, they go to about +5.00 to -7.00 in power. like comparing a ant to a elephant.and i love it! ;@)

Posted by: Rodney Brown at May 18, 2006 3:41 AM
Comment #149202

Rodney
Actually you lost me on the first abo. ButI think I get your drift. Bassicly you can make lens no one else can.

Posted by: Ron Brown at May 18, 2006 11:41 AM
Comment #149386

An interesting article:

abbot charged with price fixing

You may need to register to read..it’s free.

Now if they’ll just go after the rest of the industry.

Posted by: gergle at May 19, 2006 5:07 AM
Comment #149728

Thanks gergle -
To me, the problem is that Medicare and Medicaid should not be paying published prices.

It is very unfortunate that such brilliance has been preserved into law in the newest prescription drug benefit…

Christine

Posted by: Christine at May 20, 2006 11:15 AM
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