Tuesday, March 06, 2012

Birth Control, choice, insurance - your money

Rush Limbaugh’s statement about birth control was wrong and directed incorrectly. Birth control is not a right. In fact it is not a medical necessity. The premise that Federal and State Governments can dictate what insurance offers and what must be covered is just plain wrong to begin with. Why is it governments’ role to restrict or expand health insurance?

When it comes to auto insurance I have the ability to choose liability, collision, compressive and each with different limits of coverage. States set minimum coverage for liability to make sure some amount of liability will be available to compensate others for your errors or accidents you cause. In fact many states will allow you to submit a bond to cover the place of insurance; if you have no accidents you end up keeping your bond and paying no insurance – self insured. However, state and federal governments now seem bent on specifying specific coverage and and now must provide “X” for free when it comes to health insurance.

In fact we can extend the debate to life insurance. I know of no Federal or State law/regulations that require anyone buy life insurance or that require insurance companies to cover specific losses. So I ask once again, why is government interfering with private business in a matter that is an individual choice? Clearly if insurance companies thought it was a good marketing tool to offer birth control, they would offer this on their own. In fact private insurance coverage can be obtained that does not cover the birth of a child if one so chooses. Again this is a choice, not a requirement.

The debate between Rush and the woman is that the woman thinks someone else should pay for her birth control – she wants them for free, in fact every insurance company she approaches should offer it for free. This makes life easier for her in that she does not need to sort through the myriads in differences between insurance companies and prices; simply put it reduces choice and so now all she has to do is compare price.

Are people that foolish that they believe things mandated by government are free? Pretty soon we will not be able to pick and choose what we want to buy, but it will be mandated for us.

Monday, March 05, 2012

Irnorance does not equal Smart Money

Jack Hough of Smart Money has not through his article on How to Outsmart Social Security.

The statement “Social Security is designed to be fair” is totally false. If it actually had a design behind it, there would be no unfunded liability. Had it been fair, the yearly statements I received from SSA would not be telling me of impending inability to pay 100% of scheduled benefits. If there was a design behind SS-OASI, then the money paid as to a collective cohort would be in direct proportion to the value of contributions paid plus the credited interest earned on these contributions which in turn would have been used to pay the collectives benefits.

In addition “But Social Security isn't nearly as sophisticated in its pricing as the annuities offered by private companies. The latter adjust payments according to changes in interest rates to keep the benefits of waiting fairly stable, but Social Security ignores interest rates.” This contradicts the implied statement “Social Security is designed” by stating it is not sophisticated in its pricing.

Social Security did not have a design, there was no thought as to how the program would actually pay benefits nor was there any mechanism in place that would regulate benefits except Congress retained the authority to change alter or abolish any portion of the Social Security Act without liability.

"In general, gains from delaying Social Security payments are greater during periods of low interest rates, all else held equal. They're also greater "for married couples relative to singles, for single women relative to single men, and (at most interest rates) for two-earner couples relative to one-earner couples," according to the study."

This is truly amazing news. When interest rates are low, SS-OASI's trust fund earns less, thus reducing the ability to pay scheduled benefits. So with lower interest rates does it reason that the scheduled benefit payment may drop from 76% to 60% or even less? Who is this guy writing for; Social Security or Dumb Money? By law, general revenues cannot be used to fund Social Security. This reasons when there is not enough funds to pay benefits, benefits are cut. The writer is basing his analysis on the premis that full scheduled benefits will be paid and that you were born prior to 1948.

If we were really talking about smart money, we would be talking about repealing the Social Security Act pertaining to Old Age Survivors Insurance. The reason simple, a person born after 1985 can expect at most to receive 29 cents in benefits for each dollar paid in contributions and US Treasury Paid Interest.

Robert Ball
Commissioner of Social Security
1962 and 1973,Wrote June 2005

“When Social Security began, benefits for those nearing retirement age were much higher than could have been paid for by the contributions of those workers and their employers. This was done so that the program could begin paying meaningful benefits even though workers nearing retirement would have only a short time to contribute.”
“Instead, the impression is left that the program was sound only when 16 paid in for every one taking out. Thus, of course, when the ratio changed to 3.3 to 1, the program became “unsustainable.”

“They ignore the fact that in 1950 only about 15 percent of the elderly were eligible for benefits and that it was expected by all who were acquainted with the program that the ratio would, of course, change dramatically as a greater proportion of the elderly became beneficiaries.”

“What in fact happened is that when just about all the elderly first became eligible for Social Security benefits, about 1975, the ratio was 3.3 contributors to each beneficiary and the ratio has stayed that way for the past 30 years. As the baby boom reaches retirement age, as the administration says, the ratio is expected to drop for the long run to 2.0 or 1.9 workers to each retiree”


NBC-33 Debate poll results from 2002