Medicare

Stop Shopping Tax Dodgers!

Some Corporations Are Moving Addresses Overseas To Dodge Paying Fair Share Of U.S. Taxes

walgreens

We talk a lot about the grave problem of inequality and how our economy is not working for most Americans. One of the causes of this big problem is that corporations and the wealthiest are taking advantage of the system, exploiting tax loopholes, and rigging the game to benefit themselves, often at the expense of everyone else. The latest tax-dodging tactic that some corporations are considering using is a perfect example of this rigged system–and demonstrates why we need our legislators to take decisive action to stop it.

What Is The Problem?
A loophole in the tax code essentially allows a corporation to renounce its corporate citizenship in the United States, move its address overseas by merging with a foreign company, and dodge its U.S tax obligations by paying most of its taxes to a foreign government with lower tax rates than the U.S. The process takes place primarily on paper — most corporate operations remain here. The corporations that do this want all the benefits of being an American company without paying their fair share of taxes. That makes the rest of us pick up the tab.

The practice has become known as “inversion.” But what it really amounts to is desertion. And it could cost Americans tens of billions of dollars.

Who Is Taking Advantage?
There are 47 firms in the last decade that have exploited this loophole, according to new data compiled by the nonpartisan Congressional Research Service. But it’s a hot topic again because at least a dozen U.S. firms are currently considering taking advantage of it.

One of those corporations is Walgreen. The company has always prided itself on being America’s go-to pharmacy: from 1993 to 2006, it had the slogans “The Pharmacy America Trusts” and “The Brand America Trusts.” A biography of the company is entitled, “America’s Corner Store: Walgreen’s Prescription For Success.” Walgreen chief executive Gregory D. Wasson has said the company is “proud of our Illinois heritage.”

At the same time, Walgreen is currently considering merging with European drugstore chain Alliance Boots and move to Switzerland as part of a plan to dodge up to $4 billion in U.S taxes. The company that gets almost a quarter of its $72 billion in revenue directly from the government through Medicare and Medicaid is trying to reap even more profits while leaving taxpayers holding the bag.

Walgreen isn’t the only one. Pfizer, the pharmaceutical company, tried merging with the smaller U.K.-based AstraZeneca earlier this year and switch its address, where the tax rate is lower. It was estimated the move would save them at least $1 billion a year in tax obligations to the U.S. (the deal ultimately didn’t go through). Medtronic, a medical device company, plans to move its corporate address to Ireland, a tax haven, to avoid paying U.S. taxes on $14 billion. Chiquita, the banana distributor, is also heading to Ireland after acquiring Fyffes. These tax dodges, as Fortune magazine calls them in this week’s issue, are “positively un-American.”

What Can Be Done?
President Barack Obama’s 2015 budget proposes making these corporate desertions more difficult by raising the minimum levels of foreign ownership required to 50 percent (currently it is just 20 percent), which means that U.S. corporations could not move their address abroad unless they actually ceded a controlling interest to foreign owners. Congressional Democrats have made similar proposals. Treasury Secretary Jack Lew recently called for more “economic patriotism” and urged Congress to “enact legislation immediately” to close the loophole. Leaders on both sides of the aisle want comprehensive tax reform, but finding common ground in the current Congress could take a while. The simple fact is that as more and more companies exploit this loophole, a solution for this problem is needed right away–and Congress has the power the solve it.

BOTTOM LINE: More and more corporations are taking advantage of a tax loophole that helps their bottom line while costing American taxpayers billions every year. These companies want to continue to take advantage of the things that make the U.S. the best place in the world to do business, while at the same time pay less than their fair share by moving their corporate addresses overseas. That desertion is unfair, unpatriotic, and has got to change.

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This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.

Rep. Amodei and the GOP’s House of Cuts

The Road to Ruin

— by Rep. Dina Titus (NV-CD1)

Today, the Republicans in the House voted to approve the Paul Ryan budget, which Ryan calls “The Path to Prosperity.” I think it’s more like a road to ruin. In effect, he is giving the middle finger to the middle class.

Please sign our petition today and tell Paul Ryan and his Republican friends that his path to prosperity will leave most Americans in the dust.

Mr. Ryan’s budget helps Big Oil, takes away jobs here in the U.S. and hurts seniors. Instead of tackling the rising cost of health care, Ryan and his fellow Republicans want to destroy Medicare by giving seniors vouchers for a fixed amount, leaving them to make up the difference.

The Economic Policy Institute says that the Ryan budget would eliminate over 1 million jobs in the first year and 3 million jobs by 2016. As of last month, the private sector had recovered all the jobs lost during the Bush Administration. The Ryan budget will erase those gains.

Rep. Ryan also grants more tax cuts to the rich while cutting programs that help the middle class succeed, like early childhood education, college loans, and workforce training.

Paul Ryan’s budget will have dire consequences for our country. We need a budget that reflects our country’s values and helps people get back on their feet, create jobs, and prepare us for the global economy.

Please sign our petition today and tell Paul Ryan and his Republican friends that our country deserves better.

The Ryan Budget Is a Broken Record of Failed Trickle-Down Economics

By Anna Chu and Harry Stein

For the past three years, House Budget Committee Chairman Paul Ryan (R-WI) has been trotting out the same conservative, top-down policies that have failed the nation’s middle- and working-class families, seniors, and the economy. The House Republican budget is built around the tenet that nearly everyone else must sacrifice in order to continue to give billions of dollars in tax breaks to millionaires, big corporations, and Big Oil. At every turn, the House Republican budget reveals its vision of an economy and government that only works for the wealthiest individuals and special corporate interests at the cost of everyone else.

Now for the fourth consecutive year, the House Republican budget proposes dismantling traditional Medicare and slashing investments that drive our economy, all while cutting taxes for the rich and protecting taxpayer subsidies for big businesses and oil companies. The American people have seen this before, and we know how it ends—with millionaires, big corporations, and Big Oil as the only ones who are better off. Everyone else gets left behind, and our economy only gets weaker. Read more.

Grand Bargain or Raw Deal?

Many elderly Americans are close enough to poverty’s edge that Social Security cuts of any size could push them over the brink.

— By Peter Hart

Peter Hart

Following the government shutdown drama, politicians in Washington appear hopelessly divided, according to conventional wisdom.

Fair enough. But there’s at least one area where many politicians from both of the major parties agree — and many of the TV talking heads and newspaper pontificators are with them, too. Social Security, they insist, “needs” to be cut.

For the last few years, after a major standoff, the usual Beltway pundits have been talking about something they like to call the “grand bargain.”

That sure sounds like a good thing. Who doesn’t love a bargain? Well, here’s the question you should ask yourself: Who’s actually getting one? It’s more likely than not that the savings aren’t headed your way.

Fixing Social Security, an OtherWords cartoon by Khalil Bendib

In Washington-speak, a “grand bargain” means some kind of budget deal where everyone is forced to give a little in order to reduce the budget deficit and tackle the country’s debt. To get Republicans to agree to raise more revenue (i.e., taxes), Democrats have to agree to some spending cuts.

As with most things, the devil’s in the details. There’s essentially unanimous Republican opposition to raising taxes on the wealthy. That makes authentic bargaining tough. And on the other side, the cuts are intended for programs like Medicare and Social Security, key elements of the safety net and perhaps the most popular government spending programs.

Medicare and Social Security are remarkably successful in helping keep seniors and others in need out of poverty. But “households relying on (Social Security) for a significant share of their income often live dangerously close to the poverty line,” according to the Economic Policy Institute. That means cuts of any kind could jeopardize their living standards.

Pundits and journalists cheer this talk of a “bargain,” and they praise politicians — especially Democrats — who have the “courage” to back such cuts.

For the past few decades, politicians and pundits have ginned up a “crisis” over Social Security’s finances. At this point, you can say almost anything about Social Security and get away with it.

Right now, yet another wave of scare stories about Social Security has soaked the media. 60 Minutes recently did a segment about the allegedly rampant fraud in the Social Security disability system. But back in reality, disability benefits are difficult to collect, and the program is watched very closely for signs of cheating.

The Washington Post ran a big story about the problem of people collecting benefits for their deceased loved ones. Front-page news in the nation’s capital — but if you read closely, you would discover that we’re talking about 0.006 percent of the checks.

So long as the media can keep churning out this misleadingly alarmist Social Security coverage, more politicians will talk up the idea of “fixing” the program. When you hear them say this, you should know that they mean cutting benefits.

Be on the lookout: When the TV talking heads and politicians all agree that it’s time to strike a “grand bargain” to “protect” or “fix” Social Security, check the fine print. Someone’s getting a bargain, but it’s probably not you.


Peter Hart is the activism director of Fairness & Accuracy in Reporting. www.fair.orgCartoon Credit:  Fixing Social Security, an OtherWords cartoon by Khalil Bendib.   Distributed via OtherWords. (OtherWords.org)

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HHS announces first guidance implementing Supreme Court’s decision on the Defense of Marriage Act

Today, the Department of Health and Human Services (HHS) issued a memo clarifying that all beneficiaries in private Medicare plans have access to equal coverage when it comes to care in a nursing home where their spouse lives.  This is the first guidance issued by HHS in response to the recent Supreme Court ruling, which held section 3 of the Defense of Marriage Act unconstitutional.

“HHS is working swiftly to implement the Supreme Court’s decision and maximize federal recognition of same-sex spouses in HHS programs,” said HHS Secretary Kathleen Sebelius.  “Today’s announcement is the first of many steps that we will be taking over the coming months to clarify the effects of the Supreme Court’s decision and to ensure that gay and lesbian married couples are treated equally under the law.”

“Today, Medicare is ensuring that all beneficiaries will have equal access to coverage in a nursing home where their spouse lives, regardless of their sexual orientation,” said Centers for Medicare & Medicaid Services (CMS) Administrator Marilyn Tavenner.  “Prior to this, a beneficiary in a same-sex marriage enrolled in a Medicare Advantage plan did not have equal access to such coverage and, as a result, could have faced time away from his or her spouse or higher costs because of the way that marriage was defined for this purpose.”

Under current law, Medicare beneficiaries enrolled in a Medicare Advantage plan are entitled to care in, among certain other skilled nursing facilities (SNFs), the SNF where their spouse resides (assuming that they have met the conditions for SNF coverage in the first place, and the SNF has agreed to the payment amounts and other terms that apply to a plan network SNF).  Seniors with Medicare Advantage previously may have faced the choice of receiving coverage in a nursing home away from their same-sex spouse, or dis-enrolling from the Medicare Advantage plan which would have meant paying more out-of-pocket for care in the same nursing home as their same-sex spouse.

Today’s guidance clarifies that this guarantee of coverage applies equally to all married couples.  The guidance specifically clarifies that this guarantee of coverage applies equally to couples who are in a legally recognized same-sex marriage, regardless of where they live.
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Obamacare: Signed, Sealed, Delivering …

Watch the Obamacare videos & get the facts

Obamacare is making health care work better for all of us, even if you already have insurance. It puts the health of your family first—ensuring access to free preventive care and protecting consumers from insurance company abuses.

71 Million Kids & Adults With Private Insurance Have Received No-Cost Preventive Care.
“HHS estimates that, as a result of the ACA, 71 million children and adults with private insurance, and 34 million Medicare beneficiaries have received no-cost preventive care. Enhanced federal matching funds in Medicaid are available to states providing all USPSTF-recommended preventive benefits without cost-sharing, but, to date, few states have made the changes required to gain the higher match rate.” “Health Reform-The Affordable Care Act Three Years Post-Enactment,” Kaiser Family Foundation, March 2013.
Discrimination By Insurance Companies For Children With Pre-Existing Conditions Was Banned.
“Coverage exclusions for children with pre-existing conditions were prohibited as of September 23, 2010. Insurers are no longer permitted to deny coverage to children due to their health status, or exclude coverage for pre-existing conditions. Protections for adults will take effect in 2014. In addition, lifetime limits on coverage in private insurance have been eliminated and annual limits are being phased out.” “Health Reform-The Affordable Care Act Three Years Post-Enactment,” Kaiser Family Foundation, March 2013.
Consumers Received $1.1 Billion in Rebates From Their Insurance Companies.
“Insurance companies that don’t spend at least 80 percent of its customers’ premium dollars on health care are required to provide rebates to policy holders. In 2012, the first year this rule was implemented, 12.8 million consumers received $1.1 billion in rebates.” “Health Reform in Action,” WhiteHouse.gov, accessed 6/5/13.
3.1 Million More Young Adults Have Health Insurance Through Their Parent’s Plan.
“Under the law, most young adults who can’t get coverage through their jobs can stay on their parents’ plans until age 26.” “Health Reform in Action,” WhiteHouse.gov, accessed 6/5/13.
Seniors Have Saved More Than $6.1 Billion on Their Prescription Drugs Since 2010.
“Seniors who hit the gap in Medicare’s prescription drug coverage, often called the ‘donut hole’ now receive 50 percent discounts on covered brand name drugs. The new health reform law will provide additional savings each year until the coverage gap is closed in 2020.” “Health Reform in Action,” WhiteHouse.gov, accessed 6/5/13.

Where Would We Be Without Social Security?

Congress must ensure that the promise of Social Security and Medicare remains fully funded.

By Jo Comerford

Jo Comerford is the executive director of the National Priorities Project

Nearly every single American is intimately connected with the earned benefits of Social Security and Medicare — as either a contributor, a recipient, or both.

In fact, a recent national poll indicated nearly 90% of us favor taking strong measures to preserve the long-term stability of both programs. So a recent report released by the trustees of Social Security and Medicare may have caused you to take notice and provoked you to think about — or tell — your stories. Here are a few I’d like to share:

NPP-SocSecMedicare-DonkeyHotey

Melissa M. of Stinson Beach, California, talked about her father-in-law, 60 years old, working for low wages six or seven days each week for 40 years as a manager of a nearby cattle ranch. “The one thing that keeps him going is the letter he gets from the Social Security Administration,” she said. It “tells him how much he has earned in Social Security.”

Allen J. of Portland, Oregon, remarked that he was “a liver transplant survivor because of Medicare.” Martin L. of Cortland, New York, said he was born with a heart defect that required open-heart surgery to replace it. Without Medicare, Martin writes, he “would have no life and no future.”

Alton S. of Lakeland, Florida, was planting a citrus tree when he felt a pain in his lower abdomen. That night, an emergency room doctor told him he had a ruptured diverticulum. Alton remembers overhearing someone say, “We better get this guy to surgery or he’s dead meat.” A combination of his private insurance and Medicare paid for a series of successful surgeries. Looking back, Alton believes Medicare is one of the most “humane and caring arms of our government.”

With a 33-year career as a nurse, Janet P. of Cotati, California, noted that she worked to keep her “clients stable enough to stay out of the hospital.” Every time Medicare or Social Security policy changes, her clients’ lives are affected. Even as she hustles for others, Janet is aware that she needs to think about her own future.

“My savings was in my house, but I lost that,” she said. “I’m older now…getting back that nest egg gets harder and harder, and I’m not confident that either Social Security or Medicare will be there for me when I’m not able to work full-time.”

These are Melissa, Allen, Martin, Alton, and Janet’s stories. Like millions of their neighbors, Social Security and Medicare keep them going, offering them a humane and caring future.

Congress must take sound action to ensure that the promise of both these programs remains fully funded for coming generations. If our elected officials do nothing, after 2026, the government will be able to pay approximately 87% of projected Medicare costs and, after 2033, roughly 75 percent of anticipated Social Security benefits.

The trustees offer us a sobering reminder, not a crazed alarm as some fear. Luckily there are many smart actions Congress can take in response, starting with raising the payroll tax cap and fully implementing the Affordable Care Act. These actions are within our reach and would have a dramatic and positive impact on the well-being of both programs.

Our elected officials need to hear from all of us today. It’s our budget and our future. Let’s weigh in.


Jo Comerford is the executive director of the National Priorities Project. You can find these stories and more by visiting the NPP’s Faces of the Federal Budget website. NationalPriorities.org/us/   Distributed via OtherWords (OtherWords.org)  Photo credit to DonkeyHotey/Flickr

“Profit-Motive” Is Negatively Impacting Your Healthcare: Medicare Provider Charge Data

As part of the Obama administration’s work to make our health care system more affordable and accountable, data are being released by HHS (Health & Human Services) that show significant variation across the country, even within communities as to what hospitals charge for common inpatient services.

“Currently, consumers don’t know what a hospital is charging them or their insurance company for a given procedure, like a knee replacement, or how much of a price difference there is at different hospitals, even within the same city,” Secretary Sebelius said. “This data and new data centers will help fill that gap.”  For example,

  • In Dallas, Las Colinas Medical Center billed Medicare an average of $160,832 for a lower joint replacement. The price was $42,632 five miles away, at Baylor Medical Center.
  • Average inpatient charges for services for a joint replacement range from a low of $5,300 at a hospital in Ada, Okla., to a high of $223,000 at a hospital in Monterey Park, Calif.
  • Average inpatient hospital charges to treat heart failure range from a low of $21,000 to a high of $46,000 in Denver, Colo., and from a low of $9,000 to a high of $51,000 in Jackson, Miss.
  • Ventilator: $115,00 George Washington University vs. $53,000 at Providence (just 5.4 miles apart)
  • Lower limb replacement: $117,000 at Richmond CJW Medical Center vs. 25,600 at Winchester Medical Center
  • Pneumonia: $124,051 in Philadelphia vs. $5,093 in Water Valley, Mississippi.

According to Ron Pollack, executive director of Families USA, hospital pricing is “the craziest of crazy quilts.” He went on to say, “It is absurd — and, indeed, unconscionable — that the people least capable of paying for their hospital care bear the largest, and often unaffordable, cost burdens.”

Medicare has begun paying providers based on quality rather than just the quantity of services they furnish by implementing new programs, such as value-based purchasing and re-admissions reductions.  HHS awarded $170 million to states to enhance their rate review programs, and since the passage of the Affordable Care Act (ACA), the proportion of insurance company requests for double-digit rate increases fell from 75 percent in 2010 to 14 percent so far in 2013.

The ACA also makes available many tools to help ensure consumers, Medicare, and other payers get the best value for their health care dollar.  To make data from these tools useful to consumers, HHS is also providing funding  to data centers to collect, analyze, and publish health pricing and medical claims reimbursement data.  The data centers’ work helps consumers better understand the comparative price of procedures in a given region or for a specific health insurer or service setting. Businesses and consumers alike can use these data to drive decision-making and reward cost-effective provision of care.

Data are available in Microsoft Excel (.xlsx) format and comma-separated values (.csv) format.

Inpatient Charge Data, FY2011, Microsoft Excel version
Inpatient Charge Data, FY2011, Comma Separated Values (CSV) version

Hospitals determine what they will charge for items and services provided to patients and these charges are the amount the hospital bills for an item or service. The Total Payment amount includes a Medicare Severity Diagnosis Related Group (MS-DRG) amount, bill total per diem, beneficiary primary payer claim payment amount, beneficiary Part A coinsurance amount, beneficiary deductible amount, beneficiary blood deducible amount and DRG outlier amount.

Data provided by CMS (Centers for Medicare/Medicaid Services) include hospital-specific charges for the more than 3,000 U.S. hospitals that receive Medicare Inpatient Prospective Payment System (IPPS) payments for the top 100 most frequently billed discharges, paid under Medicare based on a rate per discharge using the MS-DRG for FY2011.

DRGs represent almost 7 million discharges or 60 percent of total Medicare IPPS discharges. Average charges and average Medicare payments are calculated at the individual hospital level. Users will be able to make comparisons between the amount charged by individual hospitals within local markets, and nationwide, for services that might be furnished in connection with a particular inpatient stay.

There is some debate about how much patients, insurance providers and the government actually end up paying. “It’s true that Medicare and a lot of private insurers never pay the full charge,” said assistant professor at the University of California at San Francisco Medical School, Renee Hsia, “You have a lot of private insurance companies where the consumer pays a portion of the charge. But, for uninsured patients, they face the full bill. In that sense, the price matters.”

To view the new hospital dataset, please go to: http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html.

To access the funding opportunity announcement, visit: http://www.grants.gov, and search for CFDA # 93.511.

For more information on HHS efforts to build a health care system that will ensure quality care, please see the fact sheet “Lower Costs, Better Care: Reforming Our Health Care Delivery System,” athttp://www.cms.gov/apps/media/press/factsheet.asp?Counter=4550.

To read a fact sheet about the Medicare data showing variation in hospital charges, please see:http://www.cms.gov/apps/media/fact_sheets.asp.

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Heritage vs. Heritage: Major Immigration Report Released Today Directly Contradicts Its 2006 Study

— by Igor Volsky 

On Monday, the Heritage Foundation published a widely panned study arguing that comprehensive immigration reform that allows undocumented immigrants to earn citizenship would cost taxpayers $6.3 trillion, as the population will take advantage of an array of government programs, including, Social Security, Medicare, unemployment benefits, Medicaid, public education, and population-based services like police and parks.

But the study, which comes out under the leadership of conservative former Sen. Jim DeMint (R-SC), is a sharp departure from a “Backgrounder” the Foundation published in 2006. Then, Heritage noted that “worker migration is a net plus economically” and warned lawmakers against succumbing to “a lopsided, ideological approach that focuses exclusively on border security while ignore migrant workers (or vice versa) is bound to fail.” Below is a comparison of the two:

Heritage in 2013 Heritage in 2006
“[F]ormer unlawful immigrant households would likely begin to receive government benefits at the same rate as lawful immigrant households of the same education level. As a result, government spending and fiscal deficits would increase dramatically.” “An honest assessment acknowledges that illegal immigrants bring real benefits to the supply side of the American economy, which is why the business community is opposed to a simple crackdown… Most immigrant families have a positive net fiscal impact on the U.S., adding $88,000 more in tax revenues than they consume in services.
“Amnesty would also raise retirement costs by making unlawful immigrants eligible for Social Security and Medicare, resulting in a net fiscal deficit of around $22,700 per retired amnesty recipient per year.” “Social Security payroll taxes paid by improperly identified (undocumented) workers have led to a $463 billion funding surplus.”
“Many conservatives believe that if an individual has a job and works hard, he will inevitably be a net tax contributor (paying more in taxes than he takes in benefits). In our society, this has not been true for a very long time. “ “Whether low-skilled or high-skilled,immigrants boost national output, enhance specialization, and provide a net economic benefit.
Unlawful immigration appears to depress the wages of low-skill U.S.-born and lawful immigrant workers by 10 percent, or $2,300, per year. Unlawful immigration also probably drives many of our most vulnerable U.S.-born workers out of the labor force entirely.” Studies show that a 10 percent share increase of immigrant labor results in roughly a 1 percent reduction in native wages-a very minor effect… [C]ritics of this type of insourcing worry that jobs are being taken away from native-born Americans in favor of low-wage foreigners. Recent data suggest that these fears are overblown.”

NOTE:

The author of the 2006 Heritage report disputes the 2013 analysis: “Unless they expect readers to believe all this household income (a) generates no productive work (e.g., makes product, mows lawns, nurses the sick, and starts businesses that hire other Americans) and (b) is 100% remitted abroad, consuming nothing in the U.S. macro economy, then the report is misleading.” Like the other fiscal conservatives today, he argues, “The net effect of this Special Report does real damage to the cause of dynamic analysis. For more than a decade, Heritage has called on CBO to add dynamic analysis to its tax reform studies.”

This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.