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From the category archives: privatization

Good News for Seniors in Medicare That You Won’t Hear About from Conservatives

In spite of years and years of doom-and-gloom predictions from conservatives that Obamacare will hurt Medicare, the facts just continue to tell another, very different story.  Earlier in the month the annual Medicare Trustees report showed how the ACA continues to extend the program’s solvency.  Now, the Congressional Budget Office has even more to say:

“You’re looking at the biggest story involving the federal budget and a crucial one for the future of the American economy. Every year for the last six years in a row, the Congressional Budget Office has reduced its estimate for how much the federal government will need to spend on Medicare in coming years. The latest reduction came in a report from the budget office on Wednesday morning.

The changes are big. The difference between the current estimate for Medicare’s 2019 budget and the estimate for the 2019 budget four years ago is about $95 billion. That sum is greater than the government is expected to spend that year on unemployment insurance, welfare and Amtrak — combined. It’s equal to about one-fifth of the expected Pentagon budget in 2019. Widely discussed policy changes, like raising the estate tax, would generate just a tiny fraction of the budget savings relative to the recent changes in Medicare’s spending estimates.”

Unfortunately, these fiscal facts will be ignored by those in Washington determined to cut Medicare benefits. Even though he’s on a nationwide book tour, Rep. Paul Ryan is doing everything possible to ignore talking about his plan which would turn Medicare into CouponCare while also repealing the ACA -- stealing years from Medicare’s solvency, eliminating free screenings for seniors, preserving massive subsidies for private insurers in Medicare Advantage and bringing back the costly prescription drug donut hole. 

When Privatize Means Protect and Slash Means Save - the 2014 Campaign Continues

It must be campaign season! GOP candidates, under Karl Rove’s tutelage, have doubled-down on their Medicare and Social Security dodge and deflect strategy. The heart of this political strategy is to avoid talking about GOP candidates’ true plans for Social Security and Medicare while simultaneously portraying their opponents as the “enemies of seniors.”

Greg Sargent offers this perspective:

“It is remarkable to watch Rove’s group try to position multiple Democratic Senators as the real threat to social insurance for the elderly, for the third straight cycle — and even more intriguingly, to use Simpson Bowles to do so. After all, Simpson Bowles is still widely treated as a paragon of unimpeachable fiscally responsible centrism, and Dems have long been pilloried by Beltway fiscal scold types for refusing to embrace its sanctified prescriptions for deficit reduction.

Indeed, this sort of Crossroads rhetoric should outrage fiscal conservatives. As Philip Klein put it in a post slamming Crossroads’ ad against Mark Pryor: ‘if Republicans want to be a limited government party, they have to be making the case for reforming entitlements — not running ads attacking Democrats from the left.’ “

As a reminder, Simpson Bowles is the Wall Street backed plan which would raise the retirement age, change the Social Security formula to cut benefits by 5%-30% while also changing the COLA formula to cut benefits for both current and future retirees.  Simpson Bowles has been touted by conservatives and centrists as a “balanced plan” even though it imposes 75% in benefit cuts (largely on the middle class) and only 25% in revenue increases.   How incredibly cynical for Karl Rove and crew to attempt yet another rewrite of history on behalf of his GOP congressional clients, most of whom would not only support Simpson-Bowles but also the GOP/Ryan budget which would be especially devastating to Social Security and Medicare.

So, as you will inevitably see these ads make their way onto your local channels, here’s what you need to remember about the GOP campaign strategy on Social Security and Medicare from their 2012 playbook and our blog post back then:

A memo and campaign how-to video from the National Republican Congressional Committee provides an incredibly clear and cynical look behind their political curtain, as the NRCC gives Republican candidates tips on how to dodge the discussion they really don’t want to have about the votes they’ve already cast on Medicare:

“Do not say: ‘entitlement reform,’ ‘privatization,’ ‘every option is on the table,’ … Do say: ‘strengthen,’ ‘secure,’ ‘save,’ ‘preserve, ‘protect.’”  NRCC Memo

It’s up to voters to ask the right questions.  That happened in New York with GOP candidate  Elise Stefanik and hilarity ensued:  

What Do Swatting Mosquitos and Cutting Social Security Have in Common?

John Nichols at The Nation has this week’s must-read story on Rep. Paul Ryan’s never-ending quest to cut Social Security benefits.  Nichols has read Ryan’s new book (so we don’t have to) and provides this analysis:

The well-regarded second-term congressman met with Vice President Dick Cheney, who was at the peak of his co-presidency powers. Like Cheney in his younger years, Ryan was a former congressional aide who had worked the conservative think-tank circuit before getting himself elected to the House. The Washington insiders should have gotten on famously.

But the vice president was not buying what the man, who is now described as “the intellectual leader of the Republican Party,” was selling.

Ryan recalls the meeting this way:

“The surplus has given us a huge opportunity,” I explained. “If we dedicate the Social Security surplus to reform, we can shore up the program and end the raid on the trust fund.” I talked about the opportunity to create a real ownership society, how workers could actually own a piece of the free enterprise system through these reforms. As soon as I finished my pitch, Vice President Cheney said, “Yeah, we’re not going to do that.” Then he looked at the person sitting next to me, signaling that he was ready to hear the next idea. His terse reply was the verbal equivalent of someone swatting an annoying mosquito from his face.

Of course later the Bush administration did in fact try to privatize Social Security with a famously failed national town-hall blitz in which the more they talked, the more the American people rebelled against Bush’s plans to send workers' Social Security to Wall Street. Cheney also supported the privatization of the Pentagon; however, Nichols points out that the politically astute Vice President at least understood one truism that Paul Ryan still seems oblivious to:

Cheney recognized then, as he appeared to again in his 2001 “annoying mosquito” conversation with Ryan, that domestic political calculations require at least some deference to the wisdom of the American people.

Today that wisdom says that the United States need not, and must not, slash the social safety net in order to advance reforms that will be very good for Wall Street but very bad for Main Street. Until Paul Ryan accepts this reality, he will remain stuck on the same questions. Indeed, if the Republicans nominate the ambitious young congressman for president in 2016, and if he runs on the agenda Dick Cheney swatted away fifteen years earlier, Ryan will again find himself asking, “Why did we lose? How did it happen? Why does the Republican Party seem to keep losing ground.”

We recommend you read the whole story here.

 

 

 

New Medicare Advantage Rates Preserve Insurance Industry Subsidies...Again

For the second year in a row, America’s massive health insurance industry lobby launched a Washington lobbying and advertising blitz hoping to scare seniors into believing they’ll lose their Medicare and politicians will lose their seats if the industry’s government overpayments aren’t protected.  Mission accomplished. Rather than trimming rates, the Obama administration raised them:

“Private Medicare plans would see a 0.4 percent boost in their payment rates for 2015 under a final rate announcement made by Centers for Medicare and Medicaid Services officials Monday.

Officials with Medicare said the better-than-expected news for insurers came about in part as a result of healthier enrollees signed up for both Medicare Advantage and traditional fee-for-service plans, which means less of a cost burden on the health insurance system for the aged.” Congressional Quarterly

When CMS says “in part” what they aren’t mentioning is the part where the administration basically caved (for the second year in a row) to the insurance industry’s million dollar lobbying blitz to keep its billions of dollars of federal overpayments intact.   

“Today’s announcement by CMS to, once again, preserve government overpayments to private insurers in Medicare Advantage is bad policy and bad economics for the Medicare program. These subsidies were supposed to be gradually trimmed in order to expand benefits and improve the quality of care for all seniors in Medicare. However, each year the insurance lobby threatens to cancel coverage or charge more to seniors in MA plans rather than accept a reduction in their overpayments or reimbursement rates. 

For many years, private insurance companies have claimed they can provide better coverage to seniors at a lower cost.  The reality proves otherwise.  Since 2003, all seniors in Medicare (including those not even enrolled in Medicare Advantage) have paid higher premiums to help fund the billions in government overpayments to private Medicare Advantage insurance companies.  Over the years, as much as 14% more per beneficiary has been paid to MA plans than is paid to cover individuals enrolled in traditional Medicare.  It’s a wasteful federal boondoggle that was rightfully corrected by passage of the Affordable Care Act (ACA) in 2010.  Additionally, thanks to the ACA, growth in health care costs have been decreasing which means that reimbursement rates also go down.   As reimbursement rates have decreased, MA plan enrollment has increased. 

Let’s be clear, contrary to the health insurance industry’s massive lobbying campaign claims, Medicare doesn’t make the decision about cuts to seniors’ MA coverage, including increasing premiums or reducing access to doctors. That decision rests squarely in the board rooms of the nation’s private insurance industry, which is unwilling to give up a penny of their government giveaway in favor of continued threats of diminished coverage and higher premiums for seniors.

This annual drama with private insurers in Medicare proves, once again, that when private MA plans are unwilling to compete on a level playing field with traditional Medicare, seniors will ultimately pay the price. So much for providing better coverage for less.”...Max Richtman, NCPSSM President/CEO 

White House Continues Playing “Let’s Make a Deal” with the GOP on Social Security & Medicare Benefit Cuts

Just two months ago, the Obama White House vowed it wouldn’t be sucked into debt ceiling negotiations with Republicans again.  “Thank goodness” we all said, since that debacle ultimately led us to the ongoing budget mess and sequester which continues to hurt American families nationwide.

“Gene Sperling, director of the National Economic Council, told reporters that the president "simply is not going to negotiate on the debt limit." The Hill

Hmmm....Guess what? The White House has been meeting behind closed doors with Republicans ever since then doing exactly that...negotiating with Republicans about which middle-class benefits will be cut in order to head off another GOP led hostage taking over the debt ceiling.  Clearly, past is prologue.

Here’s what the National Journal reports today:

“At least a dozen Republican senators are regularly meeting with President Obama’s top aides in an attempt to plot a way forward on the looming fiscal challenges facing leaders this fall, senators involved in the meetings tell National Journal.

The meetings, which began after Obama hosted GOP senators for dinner earlier this year, are the first sign that Democrats and Republicans are in talks to strike a deal that would reduce the deficit and reform entitlements and taxes.

Republicans plan to use the debate over raising the debt limit to force Democrats to cut spending—a negotiation Obama has said he won’t engage in. But these meetings demonstrate that the president is in fact engaging Republicans in a broader discussion about debt and spending.

An administration official said White House aides have made clear to Republicans that the president’s offer from December—including $600 billion in new tax revenue for $400 billion in Medicare and other health care cuts—still stands.

Republicans are open to $600 billion in revenue, Burr said, but want to see it come from a mix of entitlement and tax reform. And the GOP opposes Obama’s $400 billion in Medicare cuts, arguing they want more structural reforms.”

Just in case you’ve forgotten, those “structural reforms” actually end traditional Medicare and put seniors at the mercy of private insurance companies, dramatically increasing their health care costs and limiting their choice of doctors.  What Republicans want is passage of the Ryan/GOP budget, which is nothing more than “CouponCare” which gives seniors a coupon to go buy their health coverage from private insurance companies. The American people don’t support “CouponCare” yet the Republicans in the House have introduced this plan three times and clearly hope President Obama will give them what the Senate will not.  

And then there’s President Obama’s plan for Social Security and Medicare, which isn’t to be applauded either. He proposes cutting Social Security benefits for current and future retirees, veterans and the disabled plus raising taxes on the middle class through the Chained CPI.  

“Cutting benefits by adopting the chained CPI would cut the COLA by 3% for workers retired for ten years and 6% for workers retired for twenty years. This cut targets both current and future retirees. Three years after enactment, this translates to a benefit cut of $130 per year in Social Security benefits for a typical 65 year-old. The cumulative cut for that individual would be $4,631 or more than three months of benefits by age 75. While supporters claim the chained CPI is more accurate; you have to ask yourself, if this chained CPI really is more accurate, then why the need to offer an incremental benefit “bump” to some beneficiaries?  The answer is simple. The chained CPI does not accurately measure these groups’ expenses; in fact, it makes most of the same errors as the current formula and adds a few.  Adoption of this new formula is really about cutting benefits and raising taxes on average Americans to reduce the deficit.” Max Richtman, NCPSSM President/CEO

In a letter to the White House Max also told the President:

"The 'chained CPI' is not a 'technical tweak,' and no amount of rationalization can make it so. In reality, the chained CPI is a benefit cut for the oldest and most vulnerable Americans who would be least able to afford it. To offer to trade it away outside the context of a comprehensive Social Security solvency proposal ignores the fact that Social Security does not even belong in this debate because it does not contribute to the deficit. Cutting Social Security benefits to reduce the deficit is unacceptable to the vast majority of Americans across all ages and political affiliation."

On Medicare, President Obama also supports even further means-testing which will ultimately hit middle-class families, not just “wealthy seniors.”

“Proposals to expand Medicare means testing include increasing income-related premiums under Medicare Parts B and D until 25 percent of beneficiaries are subject to higher premiums.  A study from the Kaiser Family Foundation found that this would affect individuals with incomes equivalent to $47,000 for an individual and $94,000 for a couple if fully implemented in 2014 – meaning it would reach many middle-income Americans.”

So, everything old is new again.  President Obama is negotiating with the GOP all over again and middle-class benefit cuts are the only thing we know for sure is on the table.  You have to wonder, where are Congressional Democrats?!

 

 

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