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From the category archives: Medicare

House GOP Recklessly Pursues Privatization of Medicare in Budget Process

Congress is targeting the health and financial well-being of America’s seniors by making yet another attempt to privatize Medicare.   Yesterday the House Budget Committee passed the GOP’s FY 2018 budget resolution, which includes Speaker Paul Ryan’s “Medicare premium support” scheme – an innocuous name for turning time-tested senior health care coverage into “Coupon-Care.”  

The House budget blueprint slashes nearly $500 billion from Medicare over ten years and raises the eligibility age from 65 to 67 – along with gutting Medicaid and other social safety net programs for needy seniors.  

The Associated Press had a pithy summary of the painful cuts that the GOP proposes in its new budget:

“The plan, in theory at least, promises to balance the budget through unprecedented and unworkable cuts across the budget. It calls for turning this year's projected $700 billion or so deficit into a tiny $9 billion surplus by 2027. It would do so by slashing $5.4 trillion over the coming decade, including almost $500 billion from Medicare, $1.5 trillion from Medicaid and the Obama health law, along with enormous cuts to benefits such as federal employee pensions, food stamps, and tax credits for the working poor.” – Associated Press, 7/18/17

 National Committee President Max Richtman says that converting Medicare into a voucher program is an existential threat to the program itself. 

 “Over time, giving seniors vouchers to purchase health insurance would dramatically increase their out of pocket costs since the fixed amount of the voucher is unlikely to keep up with the rising costs of health care. And, as healthier seniors choose less costly private plans, the sicker and poorer seniors would remain in traditional Medicare, leading to untenable costs, diminished coverage, and an eventual demise of traditional Medicare, plain and simple.” – Max Richtman, NCPSSM President

Of course, raising the Medicare eligibility age from 65 to 67 as the House spending plan also proposes, is in itself a drastic benefit cut.

Undermining Medicare has been a long-held dream of fiscal conservatives. Their “premium support” proposal is a thinly veiled scheme to allow traditional Medicare to “wither on the vine,” as former House Speaker Newt Gingrich once put it.

Privatization is being sold as “improving customer choice,” but based on the way current Medicare Advantage plans work, private insurance will continue to offer fewer choices of doctors than traditional Medicare does.  If traditional Medicare is allowed to shrink and collapse, choice will disappear, too.

“Weakening Medicare is a politically perilous path for Republicans.  Recent polling indicates that large majorities of Americans across party lines prefer that Medicare be kept the way it is, not to mention that President Trump repeatedly promised to protect the program during the 2016 campaign.” – Max Richtman, NCPSSM President

Meanwhile, the National Committee strongly condemns other priorities of the House Republican budget resolution, as well.  The GOP budget resolution will mean: 

*Hundreds of billions in painful cuts to Medicaid, which seniors depend on for long-term care services and supports.

*Reaffirmation of a House rule that puts 11 million Social Security Disability Insurance (SSDI) beneficiaries at risk of a 7% benefit cut in 2028.

*Reductions to SSI (Supplemental Security Insurance), which provides cash assistance to low-income seniors and people with disabilities.

 *Caps on non-defense spending that will likely lead to devastating cuts to Older Americans Act programs and the Social Security Administration (SSA) operating budget.

 *Slashing of programs that benefit our nation’s veterans and deep cuts to spending on medical research (including cancer, diabetes, heart disease, and other conditions afflicting the elderly).

The savings from these devastating cuts will likely go to tax breaks for the wealthy.  Last year’s House Republican tax plan gave 99.6% of its benefits to the top one-percent of earners, with virtually nothing for middle and low income Americans.

 

 

Social Security and Medicare are Financially Sound, Not “Going Bankrupt,” says Trustees Report

The 2017 OASDI Trustees Report confirms that the Social Security Trust fund is stable and healthy for now, but faces challenges in the future if corrective action is not taken.  The most important figures remain consistent with last year’s report:  The combined OASDI (Old-age, Survivor, and Disability Insurance) trust funds will remain fully solvent until 2034, after which Social Security can pay 77% of benefits if there are no changes to the program. The Trustees report there is now $2.847 trillion in the Social Security Trust Fund, which is $35.2 billion more than last year --- and that it will continue to grow by payroll contributions and interest on the Trust Fund's assets.  

This reassuring report will not stop Social Security’s opponents from seeing the glass half-empty and claiming that the program is in dire financial trouble.  Expect to hear more false cries about Social Security (and Medicare) going “bankrupt” in the coming months. 

“Opponents of Social Security may once again try to use this report as an excuse to cut benefits, including raising the retirement age.  We must, instead, look to modest and manageable solutions that will keep Social Security solvent well into the future without punishing seniors and disabled Americans.” - Max Richtman, NCPSSM president and CEO

The National Committee endorses bills introduced by Senator Bernie Sanders (I-VT), Rep. John Larson (D-CT) and others, which keep the Social Security trust fund solvent while boosting benefits and cost-of-living adjustments (COLAs).  The bills achieve this mainly by phasing out the payroll tax income cap so that the wealthy pay their fair share into Social Security.

Forty percent of seniors (and 90% of unmarried seniors) rely on Social Security for all or most of their income.  The average monthly retirement benefit of $1,355 is barely enough to meet basic needs, and the Trustees’ latest projected cost-of-living increase of 2.2% will not keep pace with seniors’ true expenses. 

The news media touted the 2.2% bump for 2018 as “the largest in several years.” While it’s true that next year’s COLA is far superior to this year’s 0.3% increase, it is still woefully inadequate.  What the media don’t always explain is that a 2.2% increase translates into an extra $28 per month – hardly a fortune for seniors struggling to meet rising expenses on fixed incomes. A single co-pay for a prescription or a trip in a wheelchair van could easily gobble up $28, if not more.

Currently, Social Security cost of living increases are pegged to the Consumer Price Index for Wage Earners or CPI-W.  This index does not reflect seniors’ true expenses.  Older Americans pay a disproportionate share of their limited incomes for items like housing and medical care compared to younger wage earners.  The National Committee advocates the adoption of the Consumer Price Index for the Elderly (CPI-E), which tracks rising costs for the goods and services seniors actually spend their money on.  The leading categories are Housing, Transportation, Food and Medical Care.  As the National Committee’s Webster Phillips told CBS Radio News: 

“The consumer price index for the elderly (CPI-E), which is focused on the spending patterns of seniors, is a better measure of inflation as it affects older people’s consumption patterns.” – Webster Phillips, NCPSSM Senior Policy Analyst, 7/13/17

On Medicare, the Trustees report shows that the Part A Trust Fund will be able to pay full benefits until 2029, and 88% thereafter if nothing is done to bolster the system’s finances.  Depending on what the final version looks like, the Republican healthcare plan could reduce the solvency of Medicare by two years. The National Committee opposes the GOP health plan and rejects efforts to privatize Medicare – which Speaker Ryan and the House Republicans have promised to undertake during the budget resolution process for 2018.

Instead of privatization, the National Committee champions innovation and continuing efficiencies in the delivery of care, allowing Medicare to negotiate prescription drug prices, and restoring rebates the pharmaceutical companies used to pay the federal government for drugs prescribed to “dual eligibles” (those who qualify for both Medicare and Medicaid) – in order to keep Medicare in sound financial health.

Massachusetts Congressman is an Unassuming, Unrelenting Champion of Social Security

This morning National Committee President Max Richtman interviewed a real fighter for Social Security and Medicare on Facebook Live from Capitol Hill – Congressman Richard Neal (D-MA-1). 

The Congressman, who the Boston Globe called “an unassuming everyday guy from Western Massachusetts,” has a unique vantage point on seniors’ issues.  He is the ranking member of the powerful House Ways and Means Committee, which oversees (among other things) Social Security, Medicare, Medicaid, and taxes.  He assumed the post just before President Trump arrived in Washington, and has become a key point person against a Republican assault on these programs.

Neal is a true believer in Social Security, partly because he grew up with it.  He and his sisters were raised by an aunt in Springfield, MA after their parents died, and relied on Social Security survivors’ benefits to make ends meet and remain under one roof.  “Social Security allowed us to live as a family, and I’ve never forgotten that,” Neal told Max Richtman.

The Congressman is determined that Social Security be preserved for future generations – without benefit cuts – as a singular form of retirement insurance.  “You can outlive an annuity.  You cannot outlive Social Security,” he said on Facebook Live.  “That’s the guarantee.  That’s the genius of Mr. Roosevelt’s program.”  (Social Security was signed into law in 1935 by President Franklin D. Roosevelt, father of National Committee founder James Roosevelt, Sr.)

Social Security, Neal says, gives American families a modicum of financial predictability for their senior years.  He told the Globe that Social Security “is the reason Mom and Dad aren’t living in your attic.”

Neal is co-sponsoring Connecticut Rep. John Larson’s Social Security 2100 Act – one of the Democrats’ resounding replies to Republican schemes to shrink the program.  Larson’s bill keeps Social Security solvent for decades without cutting benefits.  In fact, The Social Security 2100 Act modestly increases benefits.  Rep. Neal admits that the bill probably won’t go very far while Republicans control Congress.  But he says the legislation “invites fresh thinking about how to encourage growth in Social Security.”

Meanwhile, the Congressman vehemently opposes a bill from House Social Security Subcommittee Chairman Sam Johnson (R-TX) that would do the opposite of Larson’s – reducing cost-of-living adjustments, raising the retirement age to 69 and cutting the benefit-computation formula. All of this, Neal says, would amount to a 30% cut in benefits for middle-class retirees.

Neal shoots down conservative arguments that Americans’ increasing longevity justifies raising the retirement age.  Without Social Security, nearly half of our nation’s seniors would live in poverty – all the more reason, Neal says, not to pull the rug from under retirees by delaying eligibility for benefits.  “We applaud each other regularly for increases in life expectancy in America,” says Neal.  “But all that means is that we have to reinforce the guarantees that Social Security provides.”

CBO Confirms: GOP Healthcare Bill is a Huge Setback for Older Americans

Twenty-three million people will lose health insurance in the next decade under the GOP's American Health Care Act (AHCA) according to the latest Congressional Budget Office (CBO) report.  The CBO analysis concludes that the House Republican plan benefits the young and healthy at the expense of older and sicker Americans. The report indicates that “near seniors” (aged 50-64) will be hit particularly hard by the GOP healthcare bill, as we discussed this morning on our Facebook Live broadcast from Capitol Hill.  

 

“The CBO report was no surprise to those of us who are looking out for the best interests of older Americans. The GOP leadership was so focused on passing repeal and replace legislation that they failed their due diligence by ignoring an ominous flaw; their bill will drive up seniors’ out-of-pocket costs by repealing subsidies that help defray the cost of premiums,” says Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare.  

 

According to the CBO, near seniors could see their net premiums rise by as much as 700-800 percent if the AHCA becomes law.  A 64 year-old with an income of $26,500 per year who paid $1,700 annually for an Obamacare policy would now pay a whopping $13,600 under the Republican plan.

 

The report also confirms that the House bill will only compound the problems faced by near seniors with pre-existing conditions. While an amendment by Rep. Fred Upton (R-MI) adds $8 billion over five years to fund high-risk pools for patients with pre-existing conditions, that will not be nearly enough to offset the extra costs to seniors. 

 

“People who are less healthy (including those with pre-existing or newly acquired medical conditions) would ultimately be unable to purchase comprehensive non-group health insurance at premiums comparable to those under current law, if they could purchase it at all,” the CBO says

 

Seniors who rely on Medicaid will suffer under the American Health Care Act.  The CBO report calculates that the AHCA slashes Medicaid spending by $834 billion. Medicaid currently helps pay for long term care for millions of seniors nationwide. The CBO estimates that some 14 million Medicaid recipients would lose coverage under the AHCA – or not be able to attain it in the first place – within the next 10 years.  In fact, more than half of the increase in uninsured Americans under the AHCA would come from this vulnerable population.

 

The GOP healthcare bill also weakens Medicare by repealing a tax on high wage earners, which would decrease the solvency of the Medicare Part A Trust Fund by three years.  The CBO had earlier estimated that the Part A Trust fund would forgo $177.3 billion over ten years if the ACA Medicare payroll tax is repealed, opening the door for those who want to privatize (or "voucherize") Medicare. 

 

The amended American Health Care Act is an assault on the health care of all seniors,” says Richtman.  “We can only hope that the Senate will take the CBO’s new figures into consideration – and reverse the provisions that are so demonstrably harmful to our nation’s seniors.” 


 

 

Trump Budget Shatters President's Promise on Social Security, Medicaid

The President’s promise not to touch Social Security was officially revealed to be a sham today.  Trump’s proposed 2018 budget slashes $64 billion from Social Security Disability Insurance (SSDI).  Some media outlets have let the President off the hook by saying the budget does not cut Social Security benefits.  This headline from Fox Business News is typical, even in the mainstream media:

Trump’s Budget Slashes Spending, Leaves Social Security & Medicare Untouched – Fox Business News, 5/22/17


A CNN Money correspondent just perpetuated the administration’s misleading spin, telling Wolf Blitzer this afternoon that Trump’s budget “doesn’t touch Social Security.”   

Other media outlets are hedging by saying the Trump budget doesn’t cut “core” Social Security benefits – whatever that means.  Social Security Disability Insurance is a crucial and inseparable part of Social Security. Period.  No amount of parsing can cleave the two.  When you cut a program, you hurt people – whether the cuts affect “core” benefits or not.

In this case, the millions of Americans with disabilities who rely on SSDI for basic income security are the ones who stand to be hurt.  Though SSDI helps younger Americans, too, most of its beneficiaries are 55 or over – meaning any cuts to the program will hit older Americans particularly hard.   The human consequences do not seem to disturb the President’s Budget Director Mick Mulvaney, as is obvious from this exchange with a reporter in the White House press room:


Reporter:  Will any of those individuals who receive SSDI receive less from this budget?

Mulvaney:  I hope so.

Mulvaney clarified that he thought the program has been enrolling too many people and called for cuts in the number of enrollees, even though that number has been shrinking.  Earlier this year, the Budget Director wondered aloud on television why SSDI is considered part of Social Security, despite the fact that it unequivocally is – and has been – since 1956.  SSDI is funded by workers’ Social Security payroll tax contributions – just like retirement benefits.   Qualifying disability beneficiaries must meet certain work history requirements, same as they do for retirement benefits.  When SSDI recipients reach retirement age, they transition seamlessly into the Social Security retirement program.  In no way is SSDI separable from Social Security.

The Center for Budget and Policy Priorities (CBPP) reports that the Trump budget contains $72 billion in cuts to federal disability programs — primarily Social Security Disability Insurance and Supplemental Security Income, which provides income assistance to poor seniors and people with disabilities.  The budget does not contain hard details of exactly how SSDI will be cut, but CBPP offers this insight:

$48 billion would come from a vague proposal to “test new approaches to increase labor force participation.”  But the Social Security Administration has undertaken many demonstration projects over the years to test new ways to encourage beneficiaries to return to work, and they have consistently shown limited results or proved not cost-effective. The budget also contains other proposals that would cut Social Security benefits for disabled workers and SSI benefits for households with more than one disabled family member.  – Center for Budget and Policy Priorities

Cutting benefits for Americans with disabilities fits right in with the cruel theme running through the President’s entire budget, which decimates programs for society’s most vulnerable citizens in order to give the rich and big corporations a massive tax cut.  In addition to SSDI, the Trump budget guts Medicaid, and cuts funding for other programs benefitting seniors including Meals on Wheels, home heating assistance, and community service employment.  

Candidate Donald Trump repeatedly vowed not to touch Social Security, Medicare, and Medicaid.  The drastic cuts to SSDI and Medicaid – along with the weakening of Medicare’s solvency in the Republicans’ healthcare legislation – makes the President zero for three on these promises.   Knowing that he cannot be trusted to protect seniors, advocates and everyday Americans must work to defeat the Trump budget in Congress – and make sure it never reaches his desk.

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