Montag, 24. September 2012

Washington insider James A. Thurber talks on the 2012 U.S. election

SPD legt Rentenkonzept vor | Sozialdemokratische Partei Deutschlands (SPD)



SPD-Parteichef Sigmar Gabriel (Foto: dpa)


Verlässliche Alterssicherung
24. September 2012 - Jan Almstedt

SPD legt Rentenkonzept vor



Der SPD-Vorstand hat Parteichef Sigmar Gabriel bei seinem Rentenkonzept klare Rückendeckung gegeben. Mit großer Mehrheit wurden seine Pläne zur Bekämpfung der Altersarmut am Montag nach knapp vierstündiger Beratung angenommen – mit lediglich zwei Gegenstimmen und einer Enthaltung. 

Die gesetzliche Rentenversicherung soll nach den Worten von SPD-Parteichef Sigmar Gabriel wieder eine tragende Säule der Alterssicherung werden. 

Dafür biete das am Montag (24. September 2012) vom SPD-Vorstand beschlossene Konzept die richtigen Antworten, sagte Gabriel in Berlin. 

Die Entscheidung über das künftige Rentenniveau wurde auf den Parteikonvent im November verschoben. Er sprach von einer „leidenschaftlich geführten dreieinhalbstündigen Debatte“ im SPD-Führungsgremium. Es sei richtig, dass die SPD den Kampf gegen die Altersarmut aufgenommen habe. 

Anders als Union und FDP denkt die SPD in Zusammenhängen. Und geht von den tatsächlichen Lebenslagen der Menschen aus. 

Die Eckpunkte für das SPD-Rentenkonzept berücksichtigen alle Bedingungen für eine verlässliche und gute Alterssicherung: Im Arbeitsleben gute Löhne und Schutz für Menschen, die bislang außen vor blieben: 


Eine Solidarrente für alle, die lange gearbeitet haben. 

Menschenwürdige Übergänge in den Ruhestand. 

Und ergänzend eine bessere Förderung von Betriebsrenten. 


Jetzt werden die Vorschläge in der SPD diskutiert.

Zwei Monate vor dem Parteikonvent legte der SPD-Vorstand damit Eckpunkte vor für eine verlässliche Alterssicherung. 

Dabei berücksichtigt die SPD alle Bedingungen, die für eine gute Rente erfüllt sein müssen: 

Denn, „wer über Altersarmut redet, darf über Erwerbsarmut nicht schweigen“, heißt es in dem fünfseitigen Papier, das überschrieben ist: „Die SPD-Rentenpolitik: Arbeit muss sich lohnen!“

Ein gesetzlicher Mindestlohn von 8,50 Euro und die Stärkung der Tarifbindung mit höheren Löhnen und Gehältern sind darum als wichtige Grundlage genannt. 

Auch das Prinzip „gleicher Lohn für gleiche Arbeit“ – zwischen Frauen und Männern und im Bereicht der Leih- und Zeitarbeit. 

Und die SPD will dafür sorgen, dass alle Menschen die Chance auf gute Arbeit und Einkommen haben: mit einer wachstumsorientierten Industriepolitik, mehr Ausbildungsplätzen, besserer Bildung und Kinderbetreuung.

Wer lange gearbeitet hat, soll außerdem im Alter mehr haben als die Grundsicherung. 

Mit 30 Beitrags- und 40 Versicherungsjahren sollen alle Menschen Anspruch auf eine Solidarrente haben: 

850 Euro, finanziert aus Steuermitteln, damit die Beitragszahler nicht belastet werden. 

Und die so genannten „Solo-Selbstständigen“ sollen das Recht haben, in der gesetzlichen Rentenversicherung Mitglied zu sein. 

Für den Übergang ins Rentenalter will die SPD auch Brücken bauen. Das heißt zum Beispiel: keine Abschläge bei der Erwerbsminderungsrente, die Einführung einer Teilrente ab dem 60. Lebensjahr und die vollen Altersbezüge nach 45 Versicherungsjahren.

Darüber hinaus plant die SPD eine bessere Förderung von betrieblicher Altersvorsorge – als Ergänzung zur gesetzlichen Rente. 

Und in Ost und West soll zudem das einheitliche Rentensystem kommen, so die Ankündigung in dem Papier.

Über Fragen des künftigen Rentenniveaus und der Beitragsentwicklung will die SPD noch weiter diskutieren. 

Ein Beschluss zum Gesamtkonzept soll am 24. November 2012m erfolgen – dann entscheiden die Delegierten beim SPD-Parteikonvent. 

Das SPD-Rentenkonzept finden Sie hier als PDF-Datei:






Donnerstag, 20. September 2012

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EUROPA: Fusionskontrolle: Kommission gibt grünes Licht für Gemeinschaftsunternehmen von Euler Hermes und Mapfre im Bereich Delkredereversicherungen


 


Reference:  IP/12/995    Date:  20/09/2012


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Europäische Kommission

Pressemitteilung

Brüssel, 20. September 2012

Fusionskontrolle: Kommission gibt grünes Licht für Gemeinschaftsunternehmen von Euler Hermes und Mapfre im Bereich Delkredereversicherungen

Die Europäische Kommission hat die geplante Gründung eines Gemeinschaftsunternehmens der Versicherungsunternehmen Euler Hermes S.A. (Frankreich) und Mapfre S.A. (Spanien), das die Geschäftsbereiche ihrer Delkredereversicherungen in Spanien, Chile, Kolumbien und Mexiko sowie den entsprechenden Geschäftsbereich von Mapfre in Argentinien umfassen wird, nach der EU-Fusionskontrollverordnung freigegeben. 

Delkredereversicherungen schützen die Versicherungsnehmer vor dem Risiko der Kundeninsolvenz. 

Die Prüfung durch die Kommission hat bestätigt, dass das Vorhaben keine wesentlichen Auswirkungen auf die Marktstruktur in Europa haben wird und folglich wettbewerbsrechtlich unbedenklich ist.

Ferner ergab die Prüfung der Kommission, dass die auf dem spanischen Markt für Delkredere- und Kreditversicherungen aus der Gründung des Gemeinschaftsunternehmens resultierenden Überschneidungen unter 15 % liegen und daher keinen Anlass zu wettbewerbsrechtlichen Bedenken geben.

Die Kommission untersuchte auch mögliche Auswirkungen auf andere Märkte, da sowohl Euler Hermes als auch Mapfre auf verschiedenen Versicherungsmärkten in ganz Europa tätig sind. 

Abgestimmtes Verhalten der beiden Unternehmen, das den Wettbewerb beeinträchtigen würde, ist nach Auffassung der Kommission allerdings höchst unwahrscheinlich, da deren Zusammenarbeit auf den Geschäftsbereich des Gemeinschaftsunternehmens begrenzt ist und somit nur einen geringen Teil des Portfolios der Muttergesellschaften ausmacht.

Die Kommission kam daher zu dem Schluss, dass das Vorhaben den wirksamen Wettbewerb weder im gesamten Europäischen Wirtschaftsraum (EWR) noch in einem wesentlichen Teil desselben erheblich behindern würde.

Das Vorhaben wurde am 16. August 2012 bei der Kommission zur Genehmigung angemeldet.

Unternehmen und Produkte

Euler Hermes ist eine internationale Unternehmensgruppe mit Sitz in Frankreich, die letztlich von der deutschen Allianzgruppe kontrolliert wird.

Mapfre ist eine internationale spanische Versicherungs- und Rückversicherungsgruppe.

Delkredereversicherungen schützen die Versicherungsnehmer vor dem Risiko einer Insolvenz ihrer Kunden auf dem Inlandsmarkt (auf dem sie tätig sind) oder in anderen Ländern (bei Ausfuhren).

Fusionskontrollvorschriften und -verfahren

Die Kommission hat die Aufgabe, Fusionen und Übernahmen von Unternehmen zu prüfen, deren Umsatz bestimmte Schwellenwerte übersteigt (vgl. Artikel 1 der Fusionskontrollverordnung), und Zusammenschlüsse zu untersagen, die den wirksamen Wettbewerb im gesamten Europäischen Wirtschaftsraum (EWR) oder in einem wesentlichen Teil desselben erheblich behindern würden.

Der weitaus größte Teil der Fusionen ist wettbewerbsrechtlich unbedenklich und wird nach einer Routineprüfung genehmigt. Nach der Anmeldung muss die Kommission in der Regel innerhalb von 25 Arbeitstagen entscheiden, ob sie das Vorhaben im Vorprüfverfahren genehmigt (Phase I) oder ein eingehendes Prüfverfahren einleitet (Phase II).

Eine nichtvertrauliche Fassung des heutigen Beschlusses wird veröffentlicht unter:


Kontakt:
Antoine Colombani (+32 229-74513)
Marisa Gonzalez Iglesias (+32 229-51925)

MAPFRE ASISTENCIA | Deutschland | Versicherungen

MAPFRE ASISTENCIA | Deutschland | Versicherungen

EUROPA: Mergers: Commission approves joint venture between Euler Hermes and Mapfre in delcredere insurance


 


Mergers: Commission approves joint venture between Euler Hermes and Mapfre in delcredere insurance

Reference:  IP/12/995    Date:  20/09/2012


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European Commission

Press release

Brussels, 20 September 2012

Mergers: Commission approves joint venture between Euler Hermes and Mapfre in delcredere insurance

The European Commission has cleared under the EU Merger Regulation the proposed creation of a joint venture between the insurance companies Euler Hermes S.A. of France and Mapfre S.A. of Spain, which will encompass their respective delcredere businesses in Spain, Chile, Colombia and Mexico, as well as Mapfre's delcredere business in Argentina. Delcredere insurance protects policy holders against the risk of their clients' insolvency. The Commission's investigation confirmed that the operation would not raise competition concerns because it would not significantly alter the market structure in Europe.

The Commission's investigation showed that the overlaps resulting from the creation of the joint venture in the Spanish delcredere insurance and credit insurance sectors were below 15% and thus do not raise competition concerns.
The Commission also analysed potential spill-over effects on other markets, since Euler Hermes and Mapfre are both active in several insurance markets across Europe. However, the Commission concluded that any coordination between the two companies that would result in restricting competition was highly unlikely, because their cooperation is limited to the scope of the joint venture, which only represents a small part of the parents' portfolio.
The Commission therefore concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
The transaction was notified to the Commission on 16 August 2012.

Companies and products

Euler Hermes is an international French business group, ultimately controlled by the German Allianz Group.
Mapfre is an international Spanish insurance and reinsurance business group.

Delcredere insurance protects policy-holders against the risk of their clients' insolvency, either in the domestic market (where they operate) or in foreign countries (in the case of exports).

Merger control rules and procedures

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it. 
The vast majority of mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
A non-confidential version of today's decision will be available at:

Contacts :

Antoine Colombani (+32 2 297 45 13)
Marisa Gonzalez Iglesias (+32 2 295 19 25)

Freitag, 14. September 2012

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Montag, 10. September 2012

Video Weekly Address from President Obama : Coming Together to Remember September 11th | The White House

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Munich Re: Gesamtwirtschaftlich unsicheres Umfeld stellt Risikomanagement auf Bewährungsprobe | Munich Re



Bild: Dr. rer. nat. Torsten Jeworrek
ist Mitglied des Vorstands der Münchener Rück AG


9. September 2012 | Rückversicherung

Pressemitteilung

Munich Re: Gesamtwirtschaftlich unsicheres Umfeld stellt Risikomanagement auf Bewährungsprobe

Die Krise in der Eurozone, Unsicherheiten auf den Kapitalmärkten und langfristig niedrige Zinsen beeinflussen die Versicherungswirtschaft. Munich Re warnt vor zunehmenden Herausforderungen im kommenden Jahr trotz der derzeit noch starken Kapitalbasis der Erst- und Rückversicherer. 

Das unsichere wirtschaftliche Umfeld stellt Erst- und Rückversicherer vor große Herausforderungen. Sehr unterschiedliche Szenarien mit zum Teil gravierenden Auswirkungen auf das Versicherungsgeschäft müssen derzeit im Risikomanagement berücksichtigt werden. Die Verwerfungen an den Finanzmärkten treffen Erst- und Rückversicherungsunternehmen vor allem über ihre Kapitalanlagen. Historisch niedrige Zinsen belasten das Geschäftsmodell vor allem bei Vorsorgeprodukten und lang laufenden Haftpflichtdeckungen. Vor diesem Hintergrund kommt der Erneuerung der Rückversicherungsverträge zum 1. Januar 2013 eine besondere Bedeutung zu. 

Torsten Jeworrek, im Vorstand von Munich Re zuständig für das weltweite Rückversicherungsgeschäft: „Mehr denn je steht unsere Branche vor der Herausforderung, stabile Erträge im Kerngeschäft zu erwirtschaften und die Abhängigkeit vom Ergebnis der Kapitalanlagen weiter zu reduzieren. Die entscheidende Frage wird sein, wie schnell und in welchem Ausmaß es den Erst- und Rückversicherern gelingen wird, das niedrige Zinsniveau in ihre Preisberechnungen einzubeziehen.“ 

Seit einiger Zeit prägen historisch niedrige Zinsen, in einigen Ländern ein negativer Realzins sowie eine hohe Volatilität der Kapitalmärkte die wirtschaftlichen Rahmenbedingungen der Assekuranz. Darüber hinaus gibt es eine Reihe von Risikoszenarien, auf die Erst- und Rückversicherer sich vorbereiten müssen. Dazu gehören der Austritt einzelner Mitglieder aus der Eurozone, die Zahlungsunfähigkeit von Staaten, eine sprunghaft steigende Inflation oder eine Deflation. „Munich Re sieht die Stabilisierung der Euro-Zone als eine der wichtigsten Aufgaben der Politik. Als umsichtige Risikomanager müssen wir uns gleichzeitig auf sehr unterschiedliche Szenarien vorbereiten“, betonte Jeworrek. Ein Kapitalanlagemanagement, das die Anlagen sehr fein auf die Verbindlichkeiten abstimmt, sowie eine angepasste Versicherungsproduktstrategie, aber auch konkrete operative Maßnahmen dämpfen die Folgen möglicher weiterer Verwerfungen im ökonomischen Umfeld. Munich Re unterstützt ihre Kunden mit Service und Beratung, vor allem aber mit Produkten zur flexiblen Kapitaloptimierung.

Ausblick auf die Erneuerung

Da derzeit noch ausreichend Kapazität auf den Rückversicherungsmärkten zur Verfügung steht, erwartet Munich Re, dass Preise und Bedingungen bei der Erneuerung der Rückversicherungsverträge zum 1. Januar 2013 weitgehend stabil bleiben. 

Dies gilt auch für das Naturkatastrophengeschäft, sofern größere Schadenereignisse im letzten Quartal des Jahres 2012 ausbleiben. Für Sturmdeckungen in Europa könnten sich durch erhöhte Schadenerwartungen in den 2011 veröffentlichten Naturgefahrenmodellen weitere Ratenanpassungen ergeben.

In den Haftpflichtbranchen geht Munich Re davon aus, dass sich die Stabilisierung der Preise mit einem Trend zu leichten Preiserhöhungen fortsetzen wird. Besonders in diesen Sparten mit sehr lang laufenden Deckungen drücken die niedrigen Zinsen bereits heute die zukünftige Rentabilität. Liegt die Inflationsrate gleichzeitig über dem Zinsniveau – also bei negativen Realzinsen –, verstärkt sich dieser Druck. Denn Schadenzahlungen, die infolge der Inflation steigen, können nur zum Teil durch Investmentgewinne kompensiert werden. Dies muss bei der Preisfindung insbesondere für langfristiges Geschäft berücksichtigt werden.

Die generelle Verbesserung der Erstversicherungspreise in den USA, aber auch beim Motorhaftpflichtgeschäft in einigen Ländern Europas, dürfte sich demgegenüber positiv auf das Ratenniveau in der Rückversicherung auswirken. Munich Re konnte bei den bisherigen Erneuerungen 2012 die Profitabilität des eigenen Geschäfts um 2,4 % verbessern.

Jeworrek: „Zuverlässige Zahlungsfähigkeit heute und in Zukunft, also finanzielle Stabilität, sind die Basis unseres Geschäfts. Auf dieser Basis bieten wir unseren Kunden auch in wirtschaftlich schwierigen Zeiten Risikotransferlösungen, die sie entlasten und ihr Geschäft fördern. Dazu brauchen wir aber Preise, die den Risiken angemessen sind und das wirtschaftliche Umfeld widerspiegeln.“

Hinweis an die Redaktionen

Bei Fragen wenden Sie sich bitte an:

Media Relations München, Anke Rosumek
Tel.: +49 (89) 38 91-23 38

Media Relations Asien, Nikola Kemper
Tel.: +852 2536 6936

Media Relations USA, Beate Monastiridis-Dörr
Tel.: +1 (609) 243-4622


Munich Re 

steht für ausgeprägte Lösungs-Expertise, konsequentes Risikomanagement, finanzielle Stabilität und große Kundennähe. Damit schafft Munich Re Wert für Kunden, Aktionäre und Mitarbeiter. Im Geschäftsjahr 2011 erzielte die Gruppe, die ein integriertes Geschäftsmodell aus Erst- und Rückversicherung verfolgt, einen Gewinn in Höhe von 0,71 Mrd. €. Ihre Beitragseinnahmen beliefen sich auf ca. 50 Mrd. €. Sie ist in allen Versicherungssparten aktiv und mit rund 47.000 Mitarbeitern auf allen Kontinenten vertreten. Mit Beitragseinnahmen von rund 27 Mrd. € allein aus der Rückversicherung ist sie einer der weltweit führenden Rückversicherer. Besonders wenn Lösungen für komplexe Risiken gefragt sind, ist Munich Re ein gesuchter Risikoträger. Die Erstversicherungsaktivitäten bündelt Munich Re vor allem in der ERGO Versicherungsgruppe, einer der großen Versicherungsgruppen in Deutschland und Europa. ERGO ist weltweit in mehr als 30 Ländern vertreten und bietet ein umfassendes Spektrum an Versicherungen, Vorsorge und Serviceleistungen. 2011 nahm ERGO Beiträge in Höhe von 20 Mrd. € ein. Im internationalen Gesundheitsgeschäft bündelt Munich Re ihre Leistungen in der Erst- und Rückversicherung sowie den damit verbundenen Services unter dem Dach der Marke Munich Health. Die weltweiten Kapitalanlagen von Munich Re in Höhe von 202 Mrd. € werden von der MEAG betreut, die ihre Kompetenz auch privaten und institutionellen Anlegern außerhalb der Gruppe anbietet.


Disclaimer
Diese Pressemitteilung enthält in die Zukunft gerichtete Aussagen, die auf derzeitigen Annahmen und Prognosen der Unternehmensleitung von Munich Re beruhen. Bekannte und unbekannte Risiken, Ungewissheiten und andere Faktoren können dazu führen, dass die tatsächliche Entwicklung, insbesondere die Ergebnisse, die Finanzlage und die Geschäfte unserer Gesellschaft wesentlich von den hier gemachten zukunftsgerichteten Aussagen abweichen. Die Gesellschaft übernimmt keine Verpflichtung, diese zukunftsgerichteten Aussagen zu aktualisieren oder sie an zukünftige Ereignisse oder Entwicklungen anzupassen.

Monte Carlo, den 9. September 2012

Münchener Rückversicherungs-Gesellschaft
Aktiengesellschaft in München
Media Relations
Königinstraße 107
80802 München



AIG Announces U.S. Department of the Treasury Launch of Offering to Sell AIG Common Stock

AIG Announces U.S. Department of the Treasury Launch of Offering to Sell AIG Common Stock

American International Group, Inc. (NYSE: AIG)  
AIG Announces U.S. Department of the Treasury Launch of Offering to Sell AIG Common Stock

NEW YORK--(BUSINESS WIRE)--Sep. 9, 2012-- American International Group, Inc. (NYSE: AIG) today announced that the U.S. Department of the Treasury (Treasury) has launched an offering of $18 billion of its AIG common stock, par value $2.50 per share (AIG Common Stock). Treasury will also grant a 30-day option to the underwriters for the offering to purchase up to an additional $2.7 billion of AIG Common Stock to cover over-allotments, if any. 

In connection with Treasury’s offering, AIG has indicated to Treasury that it intends to purchase up to $5 billion of AIG Common Stock in the offering, at the initial public offering price, pursuant to a previously announced authorization granted by the AIG Board of Directors.

Citigroup, Deutsche Bank Securities Inc., Goldman, Sachs & Co., and J.P. Morgan Securities LLC have been retained as joint global coordinators for the offering. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC, Wells Fargo Securities, LLC, Credit Suisse Securities (USA) LLC and Macquarie Capital (USA) Inc. have been retained as joint book-runners for the offering.

The offering will be made under AIG’s shelf registration statement filed with the Securities and Exchange Commission and only by means of a prospectus supplement and accompanying prospectus. 


When available, a copy of the prospectus supplement and accompanying prospectus relating to the offering may be obtained from the Securities and Exchange Commission’s Web site at www.sec.gov or by contacting any of (i) Citigroup Global Markets Inc., Attn: Prospectus Department, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, New York 11220, by calling 800-831-9146 or emailing batprospectusdept@citi.com, (ii) Deutsche Bank Securities Inc., Attn: Prospectus Group, 60 Wall Street, New York, NY 10005-2836, by calling 1-800-503-4611, or by emailing prospectus.cpdg@db.com, (iii) Goldman, Sachs & Co. Attn: Prospectus Department, 200 West Street, New York, New York 10282, by calling toll-free 866-471-2526, by faxing 212-902-9316 or by emailing prospectus-ny@ny.gmail.gs.com, or (iv) J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by calling 866 803-9204.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. 

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, no assurance can be given that the offering or purchase will be completed. These forward-looking statements are not historical facts but instead represent only AIG’s belief regarding future events, many of which, by their nature, are inherently uncertain and outside AIG’s control. Except for AIG’s ongoing obligation to disclose material information as required by federal securities laws, AIG is not under any obligation (and expressly disclaims any obligation) to update or alter any projections, goals, assumptions, or other statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise.
 
American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the United States. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange.



Source: American International Group, Inc.
American International Group, Inc.
News Media
Jim Ankner, 212-770-3277
Cell: 917-882-7677
or
Investment Community
Liz Werner, 212-770-7074

Investment in American International Group (AIG)

Investment in American International Group (AIG)

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Sonntag, 9. September 2012

Increased Costs During Retirement Under the Romney-Ryan Medicare Plan | Center for American Progress Action Fund

Gov. Romney writing on a whiteboard at a news conference
SOURCE: AP/ Evan Vucci

Gov. Mitt Romney writes on a white board as he talks about Medicare during a news conference. The increase in health care costs under the Romney-Ryan plan for Medicare would be financially debilitating for all seniors.
  • Download the report: 

  • PDF

Former Massachusetts Gov. Mitt Romney and Rep. Paul Ryan (R-WI) want to convert our nation’s Medicare program into a voucher system for people who are under 55 years of age. Under their plan seniors beginning in 2023 would receive vouchers to purchase health insurance from private insurance companies or from traditional Medicare. If premiums for traditional Medicare or the private plan they choose cost more than the voucher amount, then seniors would have to pay the difference themselves.

The Romney-Ryan plan would also convert the joint state-federal Medicaid program into a so-called block grant program, designating a reduced amount of fund s for each state. And the Romney-Ryan plan would repeal the Affordable Care Act, which reduces drug costs and Medicare premiums and increases access to preventive services for all seniors.

Using data from the nonpartisan Congressional Budget Office and other government agencies along with parameters from published academic research studies, this study analyzes the impact of the Romney-Ryan plan on current and future seniors and shows that the increase in health care costs under the Romney-Ryan plan would be financially debilitating for all seniors. We detail these findings in the pages that follow, but briefly here are the findings.

Gov. Romney and Rep. Ryan claim that no one over 55 will be affected by their health care plan. This claim is false. Their plan would harm all seniors. The Romney-Ryan plan would hurt current seniors in two important ways:
  • Increased drug costs and higher Medicare premiums. By repealing the Affordable Care Act, the Romney-Ryan plan would raise health care costs in retirement by $11,000 for the average person who is 65 years old today.
  • Increased long-term care costs, including increased costs for nursing home care, because of cuts to Medicaid. A substantial share of Medicaid spending pays for health care costs for Medicare beneficiaries. The Romney-Ryan Medicaid cuts mean a loss of over $2,500 annually for seniors currently on Medicare who also rely on Medicaid. Unlike the Medicare voucher system that would begin in 2023 the cuts to Medicaid would begin almost immediately.
For seniors who will become eligible for Medicare after 2022, the financial harm would be even worse.
  • Increasingly unaffordable costs for all seniors who qualify for Medicare after 2022. For seniors turning 65 in 2023, Medicare costs during retirement would increase by $59,500 in 2012 dollars under the Romney-Ryan plan. Because under the Romney-Ryan plan the amount of seniors’ vouchers will not keep pace with rising health care costs, these numbers are even worse for future generations. In today’s dollars seniors who qualify for Medicare in 2030 would see an increase of $124,600 in Medicare costs over their retirement. Seniors who qualify for Medicare in 2040 will see an increase of $216,600. And by 2050 newly eligible seniors will pay $331,200 more in Medicare costs over their retirement.
  • Additional costs from private plans cherry picking healthier patients. Three-fourths of all Medicare beneficiaries are currently in traditional Medicare. The Romney-Ryan plan would include traditional Medicare as an option in the proposed program, but the costs for seniors who choose to remain in the traditional Medicare program would likely increase even more sharply than for seniors who chose a private plan. Most analysts expect the traditional Medicare plan to attract Medicare beneficiaries with the greatest health needs. In that case, Medicare would no longer enjoy a balanced risk pool and seniors choosing traditional Medicare could wind up paying an extra $29,000 on average over their retirement lifetime above and beyond the costs described above.
These estimates are conservative because we modeled the plan that Rep. Ryan released—and that Gov. Romney endorsed—earlier this year. As the Congressional Budget Office has estimated, Rep. Ryan’s original 2011 plan would result in increased costs that are several orders of magnitude greater than those modeled here.
Let’s examine each of these troubling consequences in turn.

Increased costs for current seniors

Increased drug costs and higher premiums

The Affordable Care Act saves money for both current and future seniors, but Gov. Romney has promised to repeal the Affordable Care Act if he is elected president. Repealing the Affordable Care Act will harm the 36 million current seniors in the traditional Medicare program in four ways.

First, cost sharing for parts A (hospital care) and B (physician services) will increase because the Affordable Care Act’s adjustments to payment rates for health care providers other than physicians will be repealed. Since costs per hospitalization or nursing home stay will rise, the costs that beneficiaries have to pay will also rise.

Second, this change will lead to increases in premiums paid by beneficiaries for Medicare part B. Third, the “donut hole” in the prescription drug plan, which will be closed by the Affordable Care Act, would be reopened, meaning both current and future seniors would pay more for the medicines they need.

Finally, cost sharing for preventive services, which is eliminated under the Affordable Care Act, would be reinstated, meaning that seniors would have to pay for important preventive care, including cancer screenings that they now access for free.

Despite Gov. Romney and Rep. Ryan’s claims that their plan will not affect current seniors, estimates of the costs to seniors of repealing the Affordable Care Act suggests that annual costs for current seniors in traditional Medicare would rise by more than $200 in 2013, and that added cost would increase to more than $700 in 2021.

To assess the long-term impact of these cost increases on seniors, we used the Social Security Administration’s life tables to translate these annual increases into Medicare costs over the course of their retirement. To account for inflation, we express all future amounts in 2012 dollars.

Figure 1 shows our results.

We estimate that a current 70 year old will pay nearly $8,000 more for Medicare in retirement as a result of the Romney-Ryan plan. A current 65 year old will pay over $11,000 more for Medicare in retirement. And a current 55 year old will pay over $18,000 more for Medicare in retirement.

Increased long-term care costs, including nursing home costs

Gov. Romney and Rep. Ryan propose turning Medicaid into a block grant and cutting Medicaid spending by indexing the growth of the program to economywide inflation and population growth. The Congressional Budget Office estimates that by 2022, federal spending on Medicaid will fall 35 percent relative to a baseline that excludes the Medicaid expansion in the Affordable Care Act. By 2030 federal Medicaid spending will be 49 percent lower than the non-Affordable Care Act baseline.

Because the Romney-Ryan plan would not implement reforms that reduce health spending overall, but only reduce the amount that the federal government will pay toward that spending in Medicaid, states and Medicaid beneficiaries will have to shoulder the total burden of the 49 percent reduction in federal spending. This would have a significant effect on seniors, as 9 million Medicare recipients currently depend on Medicaid funds, including 1.9 million seniors who rely on Medicaid to support their long-term care needs.

To focus on how the Romney-Ryan plan affects current seniors, we focus only on Medicare beneficiaries who are 65 or older. Currently, 23 percent of Medicaid expenditures are paid on behalf of seniors who are also enrolled in Medicare. We apply this percentage to the total Medicaid cuts (excluding the increased Medicaid expansion under the Affordable Care Act) in the first 10 years of the Romney-Ryan budget. We then divide this product by the projected number of seniors who would rely on Medicaid over the next 10 years.

On average, the Romney-Ryan Medicaid cuts would mean an annual decrease of $2,500 in benefits for each senior who relies on Medicaid to help pay for long-term care. To compensate for these cuts, either seniors or their families would have to pay more for their current levels of care or be forced to cut back on care.

Increased costs for future seniors

Beginning in 2023 the Romney-Ryan plan would convert Medicare spending into “premium support,” providing vouchers to beneficiaries to purchase either a private health insurance plan or the traditional Medicare plan. Private insurance plans would submit bids for how much they would charge to provide coverage. The voucher would be tied to the premium of the private plan with the second-lowest cost, or the premium for traditional Medicare—whichever is lower. 

If beneficiaries choose a plan that costs more than the voucher, they must pay the difference.
In some geographic areas traditional Medicare might make the lowest bid, but in others some private plans might make lower bids. In areas where private plans make bids that are lower than the cost of traditional Medicare, the voucher would be tied to the premium of a private plan. As a result many beneficiaries would be forced to pay sharply higher premiums to stay in traditional Medicare.

The Romney-Ryan plan not only would shift costs to seniors who wanted to stay in a traditional Medicare plan but would also increase costs to all seniors. The plan would set the initial voucher amount at $7,500 in 2023. The plan caps the rate of growth in the voucher amount to the rate of growth of gross domestic product plus 0.5 percentage points. This growth rate is much slower than the projected growth in health care costs, which means that the voucher would become increasingly insufficient to cover the costs of insurance, therefore shifting an increasing share of insurance premium costs to seniors. There are no provisions in the Romney-Ryan plan that would be expected to reduce the rate of growth of these costs.

Seniors will face higher costs not only because of this cost shift from the government but also because the Romney-Ryan plan increases systemwide costs by promoting private insurance that will be more costly than the existing Medicare system. The Romney-Ryan plan would cost more than the current Medicare system because, as the Congressional Budget Office has documented, private insurance companies have higher profits and administrative costs than Medicare does, and because the plan would reduce the market share, and therefore the purchasing power, of traditional Medicare.

Gov. Romney and Rep. Ryan claim that privatizing Medicare will increase competition among health plans, allowing market forces to lower costs. But the Romney-Ryan plan does not address underlying health care costs or consider that the health care market functions differently than other consumer markets. Ample evidence exists that premium support would not foster the type of competition that reduces prices. The Congressional Budget Office concludes that premium-support plans would achieve much of their federal savings from “increases in the premiums paid by beneficiaries, not from increases in the efficiency of health care delivery.”

There also is evidence that “Medicare beneficiaries are less responsive to differences in premiums when choosing a health plan than the privately insured population is, so plans may have less incentive to compete on the basis of premiums in the Medicare market than in the privately insured market.” These concerns have played out in the part D market, where most savings achieved by the program are a result of factors other than competition, including lower enrollment and greater generic utilization.

Increased costs to all seniors who qualify for Medicare after 2022

Because the Romney-Ryan voucher would grow more slowly than health care costs, seniors would become responsible for a greater share of the premium over time. We find that the Romney-Ryan plan’s cost-shifting effect alone would raise the average health care bill:
  • For seniors reaching age 65 in 2023 by $32,900
  • For seniors reaching age 66 in 2030 by $73,600
  • For seniors reaching age 67 in 2040 by $139,100
  • For seniors reaching age 67 in 2050 by $225,200
This significant increase in health care costs for seniors in the future due to this cost-shifting effect would consume 8 percent of their lifetime Social Security benefits for those turning 65 in 2023, 17 percent of lifetime Social Security benefits for those turning 66 in 2030, 30 percent of lifetime Social Security benefits for those turning 67 in 2040, and 42 percent of lifetime Social Security benefits for those turning 67 in 2050.

The Romney-Ryan plan would also raise systemwide health care costs, adding even more to what seniors would pay under this plan. As the share of the population participating in traditional Medicare declines, Medicare’s market share would fall and neither Medicare nor any single private insurer would have sufficient market share to negotiate provider prices as low as Medicare can achieve now. In addition, with more private insurance companies involved in Medicare, administrative costs and profits would rise.

In analyzing the 2011 version of the Ryan plan, the Congressional Budget Office projected that these factors would raise Medicare costs by 39 percent starting in 2022. Because there is considerable uncertainty about how many seniors would switch to the private plans and how rapidly Medicare’s bargaining power would decline, we decided to be conservative and assume that costs would rise by only half as much as in the CBO model, and that it would take 10 years for the loss in bargaining power to phase in. Even with these conservative assumptions, we find very large additional costs for seniors. The total additional retirement cost to seniors who reach retirement age after 2022 under the Romney-Ryan plan is shown in 

Figure 2.

Once you add the systemwide costs to the cost-shifting effects listed above the total increase is:
  • $59,500 for seniors reaching age 65 in 2023
  • $124,600 for seniors reaching age 66 in 2030
  • $216,600 for seniors reaching age 67 in 2040
  • $331,200 for seniors reaching age 67 in 2050
While retirees’ incomes will also increase over time as the cost-of-living adjustment to Social Security rises, it will not increase as rapidly as these required payments. The total additional costs to seniors would consume 15 percent of lifetime Social Security benefits by 2023, 29 percent by 2030, 46 percent by 2040, and 62 percent by 2050.

Additional costs from private plans cherry picking healthier patients

The impact of the Romney-Ryan plan would be even greater for seniors who want to remain in traditional Medicare. Over time, the costs associated with enrolling in traditional Medicare under the Romney-Ryan voucher system are likely to rise, potentially quite dramatically. The figures above reflect costs for the average Medicare patient, whether they are enrolled in traditional Medicare or a private plan. But the traditional Medicare program is likely to attract a disproportionate share of Medicare patients with the greatest health needs because these patients are most dependent on the broad choice of providers available in traditional Medicare.
Since the mid-1980s, private Medicare plans have attracted the healthiest, lowest-cost enrollees from the Medicare population—a phenomenon known as “adverse selection.” This trend would accelerate under the Romney-Ryan plan. If less healthy, more costly beneficiaries are left behind in traditional Medicare, then premiums for traditional Medicare would rise. In turn, more beneficiaries would leave traditional Medicare, causing premiums to rise further, and so on—creating a so-called “death spiral.”

The Romney-Ryan plan would adjust the voucher for health status—redistributing payments from plans with healthier enrollees to plans with less healthy enrollees. This “risk adjustment” mechanism would certainly help, but would still be insufficient at controlling costs. Current risk-adjustment methods are still far from perfect. The current risk-adjustment model used to calculate payments to Medicare Advantage plans can account for only 11 percent of the total variation in Medicare enrollees’ annual costs.Current methods tend to overpay plans with healthier enrollees and underpay plans with less healthy enrollees. Moreover, recent studies show that private health plans have become increasingly sophisticated at manipulating how they code the health status of their patients, undermining the risk-adjustment procedures.

Thus, even with risk adjustment, premiums for traditional Medicare would likely rise and enrollment would likely decline over time under the Romney-Ryan plan. This outcome is made more probable by the fact that the Romney-Ryan plan would not require private plans to provide a standard set of benefits—allowing them to design benefits that attract healthier beneficiaries.

To our knowledge, there is only one peer-reviewed study, “The Distributional Consequences of a Medicare Premium Support Proposal,” by University of California-Los Angeles professor Thomas Rice and health consultant Katherine A. Desmond, that analyzes the effects of a Medicare voucher system that both retains traditional Medicare and uses risk adjustment to calculate payments to plans. This study simulates the additional costs that enrollees would face if they wish to remain in traditional Medicare under various assumptions about the effectiveness of risk adjustment.

The plan modeled in this study and Romney-Ryan are remarkably similar in that both are premium support plans with risk adjustment and a traditional Medicare option. Some differences will doubtlessly occur, but we do not believe these differences are likely to change our results. Moreover, we focus on the results that use the most favorable assumptions for the Romney-Ryan plan. We use the Rice-Desmond results and update them to reflect expected Medicare costs in 2022 instead of 1996, the baseline year they use. Table 1 shows the additional costs that would be paid in each calendar year by participants in traditional Medicare because of adverse selection.
Even assuming highly successful risk-adjustment of 75 percent, far beyond what policy-makers have currently achieved, added lifetime retirement costs from adverse selection would likely exceed $29,000 in 2012 dollars.

Conclusion

Under the Romney-Ryan plan, all Americans would be forced to spend substantially more money on health care during their retirements—from tens of thousands of dollars for current seniors to hundreds of thousands of dollars more for future seniors. Those who are unable to afford these significantly increased health care costs would be forced to reduce other retirement spending or forgo necessary care.

There is no question that the long-term costs of medical care need to be addressed. But forcing seniors to shoulder the entire burden of rising health care costs is not the solution. A better, more just solution is to address the underlying causes of high health care costs, reducing costs overall, and enabling everyone to pay less without compromising access. The Affordable Care Act takes many steps in this direction, but as we have outlined elsewhere, there is more to be done to make the system more efficient overall and create better value for both individuals as well as the government.

David Cutler is a Senior Fellow at the Center for American Progress Action Fund and the Otto Eckstein professor of applied economics at Harvard University, Topher Spiro is the Managing Director for Health Policy at the Center for American Progress Action Fund, and Maura Calsyn is the Associate Director for Health Policy at the Center for American Progress Action Fund.

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Munich Re: Uncertain macroeconomic environment poses severe test for risk management | Munich Re


Dr. rer. nat. Torsten Jeworrek
ist Mitglied des Vorstands der Münchener Rück AG. Photo Munich Re


September 2012 | Reinsurance

Press release

Munich Re: Uncertain macroeconomic environment poses severe test for risk management

The crisis in the eurozone, uncertainties in the capital markets and sustained low interest rates are impacting the insurance industry. Munich Re warns of increasing challenges in the year ahead even though the capital base of insurers and reinsurers remains strong.

The uncertain economic environment poses major challenges for insurers and reinsurers. 

Very different scenarios, some with grave consequences for insurance business, currently have to be considered in risk management. The upheavals in the financial markets are taking their toll on insurance and reinsurance undertakings, above all on the investment side. 

Historically low interest rates are burdening the business model, particularly in the case of savings and pension products and long-tail liability covers. Against this background, the renewal of reinsurance treaties at 1 January 2013 takes on special significance.

Torsten Jeworrek, Munich Re’s Reinsurance CEO: "More than ever, our industry faces the challenge of achieving stable earnings in its core business and further reducing its dependency on the investment result. The key question will be how quickly and to what extent insurers and reinsurers will succeed in factoring the low interest-rate level into their price calculations."

For some time, the economic environment in which the insurance industry finds itself has been characterised by historically low interest rates, a negative real interest rate in some countries, and high volatility in the capital markets. 

Added to that are a series of risk scenarios for which insurers and reinsurers have to brace themselves. These include the withdrawal of individual Member States from the eurozone, the insolvency of states, a giant leap in inflation, or deflation. "Munich Re regards the stabilisation of the eurozone as one of today's most burning political tasks. As a prudent risk manager, we have to prepare ourselves at the same time for very different scenarios", emphasised Jeworrek. 

By closely matching assets to liabilities, adapting insurance product strategy, and taking concrete operative measures, it is feasible to dampen the consequences of further possible upheavals in the economic environment. Munich Re supports its clients with service and consultancy, above all with products that allow flexible capital optimisation.

Outlook for the renewals

As the reinsurance markets still have sufficient capacity at this time, Munich Re expects that prices, terms and conditions will largely remain stable during the renewal of reinsurance treaties at 1 January 2013. 

This also applies to natural catastrophe business, provided there are no major loss occurrences in the last quarter of 2012. For windstorm covers in Europe, further rate adjustments to the natural hazard models published in 2011 could result from higher claims expectations.

In the casualty classes, Munich Re is proceeding on the assumption that prices will stabilise, with a trend towards slight increases. Especially in these classes of business with very long-tail covers, the low interest rates are already squeezing future profitability. If at the same time the rate of inflation is above the interest-rate level – i.e. with negative real interest rates – this pressure will intensify, since claims payments that rise due to inflation can only be partly compensated for by investment gains. This must be factored into our pricing, particularly for long-term business.

The general improvement in primary insurance prices in the USA, as well as in motor liability business in certain European countries, should have a positive impact on reinsurance rates. In the 2012 renewals, Munich Re has so far been able to improve the profitability of its own business by 2.4%.

Jeworrek: "Our business is founded on Munich Re's financial stability, i.e. its reliability in terms of settling claims today and in the future. On this basis, we offer our clients – also in troubled economic times – risk transfer solutions that provide relief and spur their business. For this, however, we need risk-commensurate premiums that reflect the economic environment."

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Media Relations Munich, Anke Rosumek
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Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. Munich Re creates value for clients, shareholders and staff alike. In the financial year 2011, the Group – which pursues an integrated business model consisting of insurance and reinsurance – achieved a profit of €0.71bn on premium income of around €50bn. It operates in all lines of insurance, with around 47,000 employees throughout the world. With premium income of around €27bn from reinsurance alone, it is one of the world's leading reinsurers. Especially when clients require solutions for complex risks, Munich Re is a much sought-after risk carrier. Its primary insurance operations are concentrated mainly in the ERGO Insurance Group, one of the major insurance groups in Germany and Europe. ERGO is represented in over 30 countries worldwide and offers a comprehensive range of insurances, provision products and services. In 2011, ERGO posted premium income of €20bn. In international healthcare business, Munich Re pools its insurance and reinsurance operations, as well as related services, under the Munich Health brand. Munich Re's global investments amounting to €202bn are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group.


Disclaimer
This press release contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.

Monte Carlo, 9 September 2012

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