...Medicare and the Economy In order to fully understand Medicare, we first have to look at how the whole Government program started. To do this, we will first look at Social Security. Franklin D. Roosevelt signed the Social Security Act in August 1935. The first one-time, lump-sum payments were made in January 1937, and regular monthly benefits were first paid in January 1940. (http://www.ssa.gov) Franklin Delano Roosevelt was quoted on August 14, 1935 to say: "This law represents a cornerstone in a structure which is being built but is by no means completed--a structure intended to lessen the force of possible future depressions, to act as a protection to future administrations of the Government against the necessity of going deeply into debt to furnish relief to the needy--a law to flatten out the peaks and valleys of deflation and of inflation--in other words, a law that will take care of human needs and at the same time provide for the United States an economic structure of vastly greater soundness." (http://www.ssa.gov) The act created a uniquely American solution to the problem of old-age pensions. Unlike many European nations, U.S. social security "insurance" was supported from "contributions" in the form of taxes on individuals’ wages and employers’ payrolls rather than directly from Government funds. The act also provided funds to assist children, the blind, and the unemployed; to institute vocational training programs; and provide family health programs. As a result...
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...is because a sales tax by definition is a proportional tax. As taxable purchase increase the sales tax rate (marginal tax rate) remains constant. Arnold is correct because one’s total income spent on taxable purchases likely decreases as total income increases, so the sales tax may be considered a regressive tax. 16.) What is the tax base for the Social Security and Medicare taxes for an employee or employer? What is the tax base for Social Security and Medicare taxes for a Self-employed individual? Is the Self-employment tax in addition to or in lieu of federal income tax? -The tax base for the Social Security and Medicare taxes for an employee or employer is the employee wage. The tax base for Social Security and Medicare taxes for a Self-employed individual is the Net earnings from the Self-employment. The Self-employment tax is in addition to the federal income tax. 17.) What are unemployment taxes? -Unemployment taxes are taxes paid by employers into a federal or state fund that pays for temporary unemployment benefits for individuals terminated from their jobs without cause. 21.) What is the difference between a sales tax and a use tax? -Sales tax is a tax...
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...money I should donate to others, if any at all; that is a personal choice. Imagine if the government began collecting taxes en-masse and donating them to help stop animal cruelty. There would be enormous uproar and people would cry that the government is wasting their money on a silly cause. Personally, I would not view this as silly, and think it would be an admirable endeavor, but many would not, which is my point. Each person who gives money to a charity does so because of his or her personal feelings. Why is it mandatory that I give to the government’s charity or give at all? I should be able to choose whether or not I donate to welfare just as I have a choice whether or not to donate to PETA or a similar organization. There is no difference in my eyes. People can make the argument that welfare/transfer payments keeps people off the street, that even if you don’t believe in it, it helps you by creating a better society. Once again, I disagree. I...
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...slowed as a result of builders putting up fewer homes and consumers cutting on spending. Economists explain that slowing growth and rising prices will continue to complicate Fed’s task of deciding what level of interest rates is high enough to contain inflation. However, it’s not so high to slay out economic growth. Between April and June inflation grew at a rate of 2.5% whereas the core personal consumption index rose at an annualized rate of 2.9% in the second quarter. More so the level of worker’s wages and benefits rose at 3.6%. Once the Friday report was released investors took up the vision that Fed would be more likely give the economy a break by holding the interests steadily at 5.25%. This report confirmed the predictions of the economists that cooling house market as well as the consumer spending will take a bite out of economic growth. However, some economists had the hopes that business investment as well as improving the foreign trade would offset declines in spending and construction. This only came partially. A different report indicated that people may not be inclined to cut spending sharply. Another economist noted that the gap that existed between the wealthiest third and the poorest third consumers reached its widest pint in 20 years. According to a research conducted by the commercial department the rate at which the...
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...Understanding Aetna Medicare Supplements Aetna Inc. controls subsidiary insurance companies that go by the brand name Aetna. The Medicare Supplement Insurance plans from this particular brand are insured by Aetna Health and Life Insurance Company. The big question is: what are these Medical supplement plans? How do they work? Who qualifies to enroll? What are the best options of Medicare supplement plans? Why do you need to enroll for the Medicare supplementary plans? When should I apply for the Medicare supplementary plans? Here is a dissemination of all the answers to these questions. What are Medicare supplementary plans? Medicare supplement plans, also commonly referred to as Medigap Insurance Policies, are designed to complement the Original Medicare Plan. If your Medicare Plan covers about 80% of your medical expenses, the Medicare supplement plans will go an extra mile in covering a certain percentage of the remaining 20% depending on the kind of Aetna Medicare supplement plan that you purchase from Aetna. The Medicare supplement plan will cover for copayments, coinsurance, yearly deductibles, and medical treatment costs that you incurred while outside the U.S. There is a difference between a Medigap Insurance policy and a Medicare Advantage Plan. The latter...
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...wisdom and sagacity." (1) As a culture this should have been the law of the land, however over the last six decades or so America’s elderly population have not only been stripped off their money, but also of their social standing, political rights and the level of care they are given. If you consider that in the day and age in which we live a man who is retiring at the age of 65 is maybe able to retire, maybe not, and after probably around 40 years of being part of the work force the amount of money he will be able to retire with is less than a third of what he would have retired with in 1940 when the life expectancy was much longer as well. (1) The first national Social Security was implemented in 1883 and the “magic-age” of 65 was determined as the age when a person should be eligible to no longer work and be taken care by his or her government. It is important to address here that the average life expectancy at this time was only 37 years old. So from its inception only about 54% of men and 62% of women even lived to be the age of 65 and now 130 years later the average American lives to be nearly 78 with some people living way past there. This longevity of life has put quite a damper on the government’s plans. (2) Over time the government’s social security plan began paying out more money then it was taking in. As the government began taking in less money that this aging population would have access to the medical cost for the elderly was simultaneously skyrocketing...
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...Medicare Funding Crisis David Holt Healthcare Finance Ron Evans July 20, 2013 At the heart of America's fiscal crisis is the impending collapse of our entitlement system. And the primary cause of that looming collapse is the explosion of costs in Medicare, the federal program that provides health insurance to every American over 65. Without major reforms of the program, there is simply no way for us to address the federal deficit, contain the national debt, or save Medicare itself from collapse. Medicare's woes are partly demographic. In 2030, when the last of the Baby Boomers retires, there will be 77 million people on Medicare, up from 47 million today. But there will be fewer working people funding the benefits of this much larger retiree population: In 2030, there will be 2.3 workers per retiree, compared to 3.4 today and about 4 when the program was created. But a bigger part of Medicare's troubles is the rapid inflation of healthcare costs. In 2010, the per capita cost of providing healthcare services in America increased by 6.1%, according to Standard & Poor's, while overall inflation increased by only 1.5%. According to the Department of Labor, over the past decade, healthcare inflation has risen 48%, while inflation in the broader economy has increased by only 26%. Providing an increasingly expensive service to a rapidly growing population, while drawing on a declining pool of taxpayers is a recipe for fiscal disaster. The...
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...Medicare and Medicaid are both government-sponsored programs designed to help cover healthcare costs. While both were established by the U.S. government in 1965 and are taxpayer funded, they are actually very different programs with differing eligibility requirements and coverage. Medicare is designed to help with long-term care for the elderly, while Medicaid covers healthcare costs for the poor. Medicare is a federal program attached to Social Security. It is available to all U.S. citizens 65 years of age or older and it also covers people with certain disabilities. It is available regardless of income. Medicaid is a joint federal and state program that helps low-income individuals and families pay for the costs associated with medical and long-term custodial care. The federal government funds up to 50% of the cost of each state's Medicaid program, with more affluent states receiving less funding than less affluent states. Because of this federal/state partnership, there are actually 50 different Medicaid programs, one for each state. Unlike Medicare, which is available to everyone, Medicaid has strict eligibility requirements. Medicaid is often used to fund long-term care, which is not covered by Medicare or by most private health insurance policies. Medicaid is the nation's largest single source of long-term care funding. Medicare and Medicaid programs work together to provide medical coverage to elderly and poor people. Medicare is the primary medical coverage provider...
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...Services and Social Policy – HN300-01 Michelle March The Welfare System got its start in the 1930’s under President Franklin D. Roosevelt following The Great Depression. It started with The New deal but it was not until 1935 when individuals saw welfare for them and their needs. This was the start of The Social Security Act of 1935. In this act provisions were setup to include Old Age assistance and benefits, unemployment compensation, aid to dependent children, maternal and child welfare, services for crippled children, child welfare, public health work and vocational rehabilitation (National Center, n.d). The Food Stamp Program started in 1939, but was ended because there was no longer a widespread food surplus or unemployment. However, the program resurfaced in 1961 after reports, studies and federal proposals in 18 years showed a need for the program to continue (USDA, 2012). The next set of welfare programs came during Lyndon B. Johnson’s presidency in the 1960’s. President Johnson had The Great Society that was like President Roosevelt’s New Deal. The Great Society included the Economic Opportunity Act of 1964 which aimed at attacking poverty in America. The Job Corps, Head Start Program, Medicare, The Peace Corps, Omnibus Housing Act, The Elementary and Secondary Education Act and The National Endowment for the Arts and Humanities were all created in 1964 under Johnson (U.S. History, 2012). All of these programs are examples of different social welfare systems...
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...Medicare and Medicaid Reimbursement for Primary Care Introduction The Social Security Act of 1965 created Medicare and Medicaid, which provides health care coverage for the elderly, poor, and disabled. Medicare has become the largest single payer health entity spending $57.9 billion in 1980, $271 billion in 2003, and $513 billion in 2010 (Social Security Administration, 2012). Whereas, Medicaid being state funded, its governance is state-specific for spending. There have been very few changes to The United States health care payment system since Medicare’s and Medicaid’s inception, until March 23, 2010, when President Barac Obama signed into law the Patient Protection and Affordable Care Act (ACA). The three main goals of the ACA are to: increase the access to health care for all Americans, increase their quality of care, and make this care affordable. Unfortunately, despite the ACA’s good intent, its scope was far reaching, glossed over current problems within health care, and created more issues. It is filled with contradictory verbiage that required multiple teams of lawyers to decipher (with many different interpretations), and changed health care reimbursement with unknown consequences. Description of Policy and the Legislation The ACA attempts to solve the reimbursement problems in several ways. The act established the Center for Medicare and Medicaid Innovation within the Centers for Medicare and Medicaid Services, which is responsible for overseeing voluntary...
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...Memo To: Representative Howard Hughes From: Date: Re: Panel discussion on funding Medicare crisis Message: Below please find outline of current Medicare cost concerns as well as some history on the program as well as some plan options to cutting overall costs. Medicare is facing a major financial crisis. The federal government subsidizes medical care for more than 45 million elderly and disabled Americans through Medicare. Medicare is the third-largest federal program after Social Security and defense, and it will cost taxpayers about $430 billion in fiscal year 2010. Medicare is one of the fastest-growing programs in the federal budget, with spending likely to double over the next decade and to surpass Social Security spending by 2028. Numerous studies suggest that about one-third of Medicare spending is wasted. [ (Edwards, 2010) ] Many elderly people may believe that Medicare is an insurance plan as they pay into the cost and are charged for co-pays. Although it’s been known as welfare program, led by the government there is controversy regarding this. AARP Vise President, Joyce Rogers stated AARP is focused on protecting Social Security and Medicare for the millions of beneficiaries who have paid into the systems over their working lives. Rogers’ statement follows: “Medicare is not a welfare program. Seniors pay into Medicare their entire working lives based on the promise that they’ll have secure health coverage when they retire. Applying a means test...
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...of all the topics covered. I now have a very clear understanding of not just how health care is financed, but also its distribution across all demographics. Not only is health care financed by both public and private funding, funding can even be broken down further by each state. I have also learned that there are some very key difference when one compares different states to one another. Health insurance coverage in the United States is drastically different among socioecomimic class, race, nativity, and age. I have also learned the differences in fully and self-insured plans and the risks associated with both. Through the modules I have a much greater understanding of the PPACA act and the changes that it imposes, though it seems like in order for this act to have solid effect on the people it is designed to help, it will still need to continue to be molded and adaptive as time goes on. Not only did this course explain how healthcare is financed as a whole it went into deep discussion and thoughts on how specific programs such as Medicare and Medicaid are financed. Medicare being the United States largest health Insurance program. While Medicare provides many services and modules...
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...020 ÷ 4 = $21,005 28. a. Absent a per-books election, the income is allocated by assigning an equal portion of the annual income of $1 million to each day (or $2,739.72 per day) and allocating the daily portion among the two shareholders. Thomas is allocated 50% of the daily income for 90 days from January 1 through April 1, or $124,657.72 ($2,739.73 ÷ 2 ×91). Thomas’s estate would be allocated 50% of the income for the 274 days from April 2 through December 31, or $375,342.28 ($500,000 – $124,657.72). Ralph would be allocated $500,000 for the full year. b. If the per-books election is made, the income of $400,000 from January 1 through April 1 is divided equally between Ralph and Thomas, so that each would be allocated $200,000. The income of $600,000 from April 2 through December 31 is divided equally between Ralph and Thomas’s estate, or $300,000 to each. 34. a. Beginning AAA $715,000 Add: Sales income $206,000 Dividend income 17,000 Interest income 3,000 $226,000 Less: Real estate loss $ 5,000 Charitable contributions 22,000 § 179 expense 2,500 Administrative expenses 41,000 (70,500) $870,500 Less distributions...
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...CHAPTER 11 CURRENT LIABILITIES AND PAYROLL 1 EYE OPENERS 1. A discounted note payable has no stated interest rate, but provides interest by discounting the note proceeds. The discount, which is the difference between the proceeds and the face of the note, is the interest and is accounted for as such. 2. a. Income or withholding taxes, social security, and Medicare b. Employees Federal Income Tax Payable, Social Security Tax Payable, and Medicare Tax Payable 3. There is a ceiling on (c) the social security portion of the FICA tax and (d) the federal unemployment compensation tax. 4. The deductions from employees’ earnings are for amounts owed (liabilities) to others for such items as federal taxes, state and local income taxes, and contributions to pension plans. 5. Yes. Unemployment compensation taxes are paid by the employer on the first $7,000 of annual earnings for each employee. Therefore, hiring two employees, each earning $12,500 per year, would require the payment of twice the unemployment tax than if only one employee, earning $25,000, was hired. 6. 1. a 2. c 3. c 4. b 5. b 7. The use of special payroll checks relieves the treasurer or other executives of the task of signing a large number of regular checks each payday. Another advantage of this system is that reconciling the regular bank statement is simplified. The paid payroll checks are returned by the bank separately from regular checks and are accompanied by...
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...benefits of the Medicare system while exploring the many challenges of the program. The United States Medicare program is the closest program to universal health care for one portion of the population. While providing some level of health care to most elderly citizens over 65 years of age, it sometimes is found to be highly confusing to its patients. Additional concerns explored by this paper relate to the costs, quality of care, and availability to all who need this insurance. When all of the pros and cons are explored, one final concern arises. Amid the rising costs of medical care, prescription drugs, and costs of program administration, will the funding of this program continue and will this be a program that the young families of today can depend upon for their retirement years? 1. Introduction: The rules and regulations of Medicare Simply stated, Medicare is the federally financed health insurance program for people aged 65 and over, certain individuals with disabilities, and individuals with end-stage renal disease. Medicare Part A covers hospital and other inpatient stays. Medicare Part B is optional insurance, and covers hospital outpatient, physician, and other services. Medicare Parts A and B are known as original Medicare or Medicare FFS. Medicare beneficiaries have the option of obtaining coverage for Medicare Part A and B services from private health plans that participate in Medicare's MA program, also known as Medicare Part C. All Medicare beneficiaries...
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