The ironically titled 2019 House Republican budget, “A Brighter American Future,” may brighten the spirits of the GOP’s rich and powerful donors, but serves as a gloomy portent for millions of less affluent Americans. The budget resolution released Tuesday would cut $537 billion from Medicare and $1.5 trillion from Medicaid and other health programs. It would slash $4 billion from Social Security Disability Insurance and repeal the Affordable Care Act, robbing 23 million Americans of health coverage.
“Speaker Ryan is obviously making good on his promise to come after safety net programs to pay for the reckless Trump/GOP tax reform. In so doing, he and his party are sending a clear message: older, poorer, and disabled Americans are not as important as the billionaires and big corporations who are the main beneficiaries of a tax scheme that is blowing up our nation’s debt.” – Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare
As the Center for Budget and Policy Priorities reports, the GOP proposal would “balance the budget in nine years — but only by making large cuts to [programs] that President Trump vowed not to touch, including Medicare and Social Security.”
House Republicans apparently want to have it both ways: swelling the debt by $1.5 trillion with the reckless Trump/GOP tax scheme, then crying that deficits are too large – and insisting that crucial social programs must be cut to close the gap.
“The time is now for our Congress to step up and confront the biggest challenge to our society. There is not a bigger enemy on the domestic side than the debt and deficits.” – House Budget Committee Chairman Steve Womack (R-AR)
This is like opening the city’s fire hydrants and declaring that we must ‘confront’ the massive depletion of water reserves by asking the poor and elderly to go thirsty.
Democrats rightly decried the House GOP budget proposal as not only hypocritical, but needlessly cruel.
“Its repeal of the Affordable Care Act and extreme cuts to health care, retirement security, anti-poverty programs, education, infrastructure, and other critical investments are real and will inflict serious harm on American families.” – Rep. John Yarmouth (D-KY)
Adding insult to injury, the Republican budget reprises the conservative scheme to privatize Medicare. This flies in the face of fiscal common sense, as traditional Medicare is by far more efficient than the private sector in delivering health care. Public polling indicates that the American people, by margins of more than two to one, do not want to see traditional Medicare privatized.
Fortunately, Capitol Hill-watchers say the 2019 House GOP Budget proposal is unlikely to pass this year.
[The] proposal faces long odds in the House, let alone the Senate, where moderates have balked at previous calls to rein in so-called ‘entitlement programs.’ Republican leaders in either chamber have shown little interest in pursuing a ‘reform’ agenda in an already tough election year. – Politico, 6/19/18
But if the GOP budget is merely a ‘messaging bill’ intended for symbolic value rather than passage during the 115th Congress, the message it sends could not be clearer – neither are the stakes for anyone who is not a billionaire or a big corporation when voting this November.
Reading the headlines from earlier this week, one would think that Social Security and Medicare were on their deathbeds. The latest flurry of misleading headlines came in response to the release of the 2018 Social Security and Medicare Trustees reports:
Entitlements are in crisis. Trump refuses to act – Washington Post
Medicare To Go Broke Three Years Earlier Than Expected, Trustees Say – Politico
Social Security and Medicare head toward the skids – New York Daily News
Medicare Will be Dead in Eight Years – Salon
Trustees Predict That Social Security Will Be Insolvent In 16 Years – Forbes
The truth is that Social Security and Medicare are not in crisis, going broke, heading toward the skids, or facing insolvency. The Trustees reports indicated none of these things. They simply said that the combined Social Security retirement and disability trust fund will become depleted in 2034, after which the system can still pay 79% of benefits – if Congress takes no corrective action before then. That’s because Social Security is funded through workers’ payroll contributions, which still will be flowing in 16 years from now and beyond.
The trustees also reported that the Medicare Part A Trust fund (which covers hospital care) will become depleted in 2026, at which time the system could still cover 91% of Part A costs. But again, this outcome will only come to pass if Congress does nothing to prevent it. Meanwhile, Medicare payroll taxes and premium payments (for Medicare Parts B and D) will continue to provide the program with revenue.
To be clear, the potential depletion of these trust funds does not mean the two programs are ‘insolvent’ or ‘bankrupt.’ The shortfall in the Social Security trust fund is fixable by boosting the system’s revenue stream. Lifting the payroll tax wage cap (currently $128,400) would go a long way toward ensuring the system’s financial health by asking upper income Americans to pay their fair share. So would a modest increase in the payroll tax, spread out over a couple of decades. There is legislation pending on Capitol Hill to enact these solutions, but the GOP leadership in Congress will not consider them. Instead, conservatives favor cutting seniors’ earned benefits through higher retirement ages, stingier cost-of-living adjustments (COLAs), and means testing.
Ditto for Medicare. The political right is itching to raise the eligibility age, privatize the program, and slash benefits. Instead, Congress could enact modest and manageable measures to keep Medicare on a sound financial footing, including smart cost-saving measures and allowing the program to negotiate prescription drug prices with Big Pharma (which President Trump conspicuously omitted from his prescription drug proposals).
In fact, conservatives are creating a self-fulfilling prophecy by undermining Medicare – and are using the trustees report as an excuse to sabotage it further. As Jared Bernstein of the Center for Budget and Policy Priorities points out, the Trump administration and Congress weakened Medicare by repealing the Affordable Care Act’s individual mandate and passing $2 trillion in regressive tax cuts, among other actions.
It’s Speaker Paul Ryan and his allies who talk of Medicare and Social Security going “bankrupt” and “entitlement” programs needing “reform” (which is code for the right-wing trinity of privatizing, raising eligibility ages, and cutting benefits). When the mainstream media reflexively parrot this misleading language in their reporting, it makes benefit cuts seem inevitable. Media headlines and soundbites on the trustees reports rarely include the slightest suggestion that there are common sense revenue measures that legislators like Senator Bernie Sanders and Rep. John Larson propose.
It’s time for the media to re-evaluate the way it covers Social Security and Medicare’s finances. More reflective, responsible headline writing and reporting would certainly make the mainstream media less complicit in the conservative push to cut Americans’ hard-earned benefits.
National Committee president Max Richtman sat down with Senator Jeff Merkley (D-OR) for a Facebook Live interview on Capitol Hill Wednesday. Merkley, a staunch defender and promoter of Social Security and Medicare, weighed-in on two key issues: prescription drug prices and the funding increases needed to improve customer service from the Social Security Administration (SSA).
Decries High Prescription Drug Costs
Sen. Merkley slammed President Trump’s prescription drug pricing proposals as being too soft on Big Pharma, noting that pharmaceutical companies’ stocks shot up after the plan was unveiled. Richtman added that Big Pharma was “popping the champagne corks” in response to the president’s pricing proposals.
The Senator decried high drug prices, especially when the federal government funds research that the industry uses to manufacture its products. “We finance the science, do the research, then pay the highest drug prices in the world,” he said.
The Senator re-affirmed that Medicare should have the authority to negotiate drug prices with pharmaceutical companies, noting that the U.S. is the only Western democracy that does not allow its federal government to do so.
Social Security Administration is Underfunded
Senator Merkley says he does one town hall with constituents in each Oregon county every year. One of the top issues that constituents ask about, he says, is declining customer service from the Social Security Administration (SSA) – which sustained 11% in cuts to its operating budget between 2011-2017.
Adding insult to injury, President Trump’s 2019 budget calls for some $500 million in cuts (over 2018 appropriation levels) to SSA’s operating budget. No doubt such cuts would exacerbate understaffing at field offices, interminable hold times and busy signals on the toll-free phone line, and long waits for disability hearings (now averaging nearly two years).
“I’m not sure what the Trump administration is up to,” says Senator Merkley regarding the president’s proposed cuts, suggesting that it may be part of an effort “to discredit the Social Security program” by creating service problems.
Merkley calls on Congress to “set aside” the president’s budget proposal and restore SSA funding to aSdequate levels. The 2018 Omnibus appropriations act did, in fact, provide a more than $400 million increase to SSA’s operating budget over 2017 levels, but the agency will need additional funding to restore deteriorating customer service.
[View the entire Facebook Live interview here.]
The 2018 Social Security Trustees Report confirms that the program’s trust fund is still very much intact, with $2.89 trillion in assets – or $44 billion more than last year. The Trustees say the combined OASDI (Old-age, Survivor, and Disability Insurance) trust fund will remain fully solvent until 2034, after which it can pay 79% of benefits if there are no changes to the program.
“The Trustees have confirmed that Congress has ample time (16 years) to enact modest and manageable changes to Social Security to address the fiscal shortfall. Most Americans agree that raising the payroll wage cap is the easiest and most effective way to strengthen Social Security’s finances, negating the need for harmful benefit cuts like means testing or raising the retirement age,” – Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.
A growing movement from seniors and their advocates to lift the wage cap and increase benefits has been underway since 2013. The National Committee’s Boost Social Security Now campaign endorses legislation in Congress introduced by Senator Bernie Sanders (I-VT), Rep. John Larson (D-CT) and others, which keeps the Social Security Trust Fund solvent well into this century, while boosting benefits and cost-of-living adjustments (COLAs).
On Medicare, the Trustees report shows that the Part A Trust Fund will be able to pay full benefits until 2026, at which point payroll taxes are estimated to be sufficient to cover 91% of benefits – if nothing is done to bolster the system’s finances. The National Committee advocates several measures to keep Medicare financially sound, including a genuine push to allow the program to negotiate drug prices with pharmaceutical companies.
“President Trump’s recently unveiled prescription drug pricing proposals were a missed opportunity to bring Big Pharma to the negotiating table with the Medicare program. Among all the steps we could take to maintain the program’s financial health, this is one of the most crucial.” -Max Ricthman
The National Committee advocates restoring rebates the pharmaceutical companies formerly paid the federal government for drugs prescribed to “dual eligibles” (those who qualify for both Medicare and Medicaid), in addition to innovation in the delivery of care and in the way care is paid for – to keep Medicare fiscally sound for future beneficiaries.
A draft handbook on Medicare enrollment has drawn criticism from senior’s advocates – and rightly so. The Centers for Medicare and Medicaid Services (CMS) released the draft for review in advance of mailing a final version to 43 million households this September. What bothers advocates is the handbook’s apparent bias toward private Medicare Advantage plans over traditional Medicare – using inaccurate and misleading information.
The Center for Medicare Advocacy, Justice in Aging, and the Medicare Rights Center have sent a letter to CMS Administrator Seema Verma, calling out “serious inaccuracies” in the draft handbook, entitled Medicare & You.
“It is critical that the information in the Handbook be fairly and accurately presented… However, when comparing Original Medicare and Medicare Advantage, the 2019 draft Handbook does not meet this standard, distorting and mischaracterizing the facts in serious ways.” – Advocates’ Joint letter to CMS
The draft handbook inaccurately compares traditional Medicare and Medicare Advantage, in an apparent attempt to influence beneficiaries to choose the latter. Here are some of the crucial issues the advocates flagged in their letter:
1. The handbook fails to clearly distinguish between traditional Medicare and Medicare Advantage.
2. It does not make clear that traditional Medicare provides access to all Medicare participating providers nationwide, while Medicare Advantage limits access to a fixed network of providers in a specific geographic area.
3. The handbook repeatedly suggests that Medicare Advantage is less expensive for beneficiaries. Many factors determine a subscriber’s costs in one plan versus the other. In many cases, traditional Medicare is the less expensive choice.
4. The Handbook attempts to depict prior authorizations for medical services under Medicare Advantage as a benefit, rather a mandatory hurdle that traditional Medicare patients don’t face.
There is no doubt that Medicare Advantage might sometimes be the better choice for seniors – especially younger and healthier ones. But, as Reuters columnist Mark Miller points out, traditional Medicare “remains the gold standard for flexibility, since it can be used with any healthcare provider who accepts Medicare.”
Medicare Advantage plans, on the other hand, are managed care networks (HMO’s) with a more limited choice of physicians, hospitals, and other providers. Seniors in the Medicare Advantage program may not find their preferred doctors and specialists in the Medicare Advantage network.
Once a senior signs up for Medicare Advantage, it can be tricky to switch to traditional Medicare later. Here’s why: traditional Medicare beneficiaries usually purchase a supplemental MediGap insurance plan to help cover out-of-pocket costs. MediGap plans are guaranteed to be issued to new Medicare enrollees, but not for patients switching from Medicare Advantage to traditional Medicare. These beneficiaries may find themselves without adequate supplemental insurance.
It is not at all surprising that CMS under the Trump administration is trying to steer seniors toward Medicare Advantage.
“The handbook problems fit a pattern in the Trump administration, which has taken a number of steps to impede the flow of unbiased health insurance assistance.” – Mark Miller, Reuters
In fact, Miller says, advocates had similar objections to CMS’ 2018 Medicare handbook. What’s more, 15 U.S. Senators sent a letter to CMS in February complaining the agency was maneuvering to turn traditional Medicare into a private voucher program which would “fundamentally restructure the guaranteed benefit traditional Medicare provides to older adults and people with disabilities.”
In general, the guiding philosophy of this administration favors private over public solutions, even though – in the case of traditional Medicare (and Medicaid) – government-run health care is more cost effective.
The Medicare handbook – which millions of seniors rely on to choose the plan that best fits their needs – should present the facts about traditional Medicare and Medicare Advantage without bias. The well-being of those 43 million older Americans who will receive the Medicare handbook in September depends on it.