1/23/2012
On Saturday, GOP voters in South Carolina chose former House speaker Newt Gingrich as the best candidate to take on President Barack Obama in the November election contest.
One area where Gingrich will have difficulty debating the current President will be on an individual mandate for health insurance. Gingrich, like former candidate Hermann Cain, has consistently touted Chile’s Social Security system as the model of choice for replacing our current system.
However, what the former speaker has so far failed to address is that the system is essentially the Social Security equivalent of Obama’s health care plan. Gingrich told debate viewers that Chile’s system is “totally voluntary,” which, in fact, is totally inaccurate.
According to Jose Pinera, one of the architects of Chile’s pension system, the system mandates that all workers must contribute 10 percent of their income to government approved retirement accounts up to $250 per month.
According to Jose Pinera, one of the architects of Chile’s pension system, the system mandates that all workers must contribute 10 percent of their income to government approved retirement accounts up to $250 per month.
Until 2008, only about two-thirds of Chileans were covered under the system. In order to address the massive gap of Chileans not receive retirement pension reforms were introduced that year that now requires the government to cover individuals who failed to contribute or can’t afford to contribute.
The government also has a “minimum guarantee” and if a retiree falls short of that guarantee the Chilean government will make sure the difference is covered.
In addition, the government heavily regulates the mandated insurance companies. Under those regulations the companies can not participate in any activity other than manage the fund and are required to maintain low risk portfolios.
Much of the architecture of Chile’s Social Security mandate is emulated by both Mitt Romney’s health care plan in Massachusetts and Obama’s national health care reforms.
If the Supreme Court rules the Affordable Health Care Acts mandate as unconstitutional it would be difficult for Gingrich, if elected President, to bring Chile’s Social Security model to the United States.
In addition, the government heavily regulates the mandated insurance companies. Under those regulations the companies can not participate in any activity other than manage the fund and are required to maintain low risk portfolios.
Much of the architecture of Chile’s Social Security mandate is emulated by both Mitt Romney’s health care plan in Massachusetts and Obama’s national health care reforms.
If the Supreme Court rules the Affordable Health Care Acts mandate as unconstitutional it would be difficult for Gingrich, if elected President, to bring Chile’s Social Security model to the United States.
