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From the category archives: privatization

2016 Determines the Future of Social Security & Medicare

There is a lot at stake in the 2016 election because the differences between candidates’ plans for ‪#‎SocialSecurity‬‪#‎Medicare‬ and Medicaid are stark.  Seniors' votes will make a difference so please help us advocate, educate and keep the candidates accountable for their positions on America's most successful programs!

Two New Reports on Private Medicare Advantage Plans Reveal Real Problems for Seniors

 According to a new Government Accountability Office (GAO) report private insurers who offer Medicare Advantage plans need tougher oversight. 

“Federal investigators have found Medicare officials rarely enforce rules for private insurance plans intended to make sure beneficiaries will be able to see a doctor when they need care.

The U.S. Centers for Medicare and Medicaid Services, which oversees Medicare Advantage, requires the plans to have doctors in sufficient numbers and specialties who are near enough — in distance and travel time — so seniors can reach them. 

But the GAO found CMS checked the provider networks of less than 1 percent of the plans since 2013 — serving just 2 percent of Medicare Advantage members — and only when the plans expanded to a new county.” ... Kaiser Health News & Conn. Health I-Team 

In 2013, United Healthcare, which is the nation’s biggest health insurance company and a provider of private Medicare Advantage in Connecticut, dropped hundreds of health care providers and 1,200 doctors.  Medicare Advantage beneficiaries are restricted to a network of providers. If their provider leaves, they cannot change plans during the year. What happened in Connecticut is the perfect example of how MA plans have been allowed to skirt the rules, dropping providers thereby limiting coverage for seniors with little warning and leaving them with few options. 

“The GAO report shows Medicare ‘was not verifying network adequacy. That’s their job and they abdicated that responsibility,’ said U.S. Rep. Rosa DeLauro, D-New Haven, who requested the investigation along with other members of the Connecticut congressional delegation.”

Also this week, a new Brown University study shows that once medical care becomes costly for seniors in Medicare Advantage and no longer meets their needs beneficiaries are leaving the private MA plans.

"Our results raise questions about whether current Medicare Advantage regulations and payment formulas are designed to meet the needs of Medicare Advantage members who use post-acute and long-term care," wrote Momotazur Rahman, assistant professor (research) of health services, policy and practice in the Brown University School of Public Health, and colleagues in the October issue of the journal Health Affairs. "The unidirectional flow of these high-risk and often high-spending patients from Medicare Advantage to traditional Medicare appears to transfer responsibility to traditional Medicare just as patients enter a period of intensive health care needs." 

Private Medicare Advantage plans continue to see growth as they promise gym-memberships, limited optometric coverage or zero premium plans.  However, as predicted by many healthcare experts and indicated in the Brown study, seniors find that once they actually need help with more costly care, MA plans aren’t providing the coverage they need. 

Ultimately, this means that younger and healthier seniors are being lured into private insurers’ plans only to have to switch to traditional Medicare once they need coverage for more serious health issues (and isn’t that why we have health insurance in the first place – to cover when we get sick, not when we’re healthy?).  Meanwhile, private insurance companies continue to reap the benefits of annual federal subsidies to provide this limited coverage for healthier seniors – which are tax dollars that could have been used in traditional Medicare to serve all beneficiaries. 



What If Your Social Security Was Riding the Wall Street Roller Coaster too?

Today might be a good day for a financial exercise...

Chances are if your retirement savings are in a 401K or countless other market-based products, you may have seen what the latest Wall Street downturn has done to your balance. If not, go ahead and bite the bullet and check it.  After you get over the shock, check your Social Securitystatement.  Take some solace in knowing that while your market savings have taken a hit, the good news is your estimated Social Security benefit today is the same it was on Wednesday. 

That’s why Social Security exists.  That’s why it works.  That’s why it’s beyond reason that so many in the GOP still support sending your Social Security to Wall Street and destroying the stable income protection (it’s not an investment) Social Security provides. 

“In June, presidential candidate Jeb Bush said that he thinks the next president will have to try to privatize Social Security. Others have gotten behind the idea as well: Sen. Rand Paul (R-KY) drafted a plan in 2013 that included partial privatization, and Sen. Ted Cruz (R-TX) is in favor of using private accounts. Rep. Paul Ryan (R-WI) has included privatization in his budget blueprints.

The market drop, and ones before, expose the dangers of such a plan, which usually entails diverting some or all of the money workers contribute to Social Security through their paychecks into private investment accounts.” Think Progress

Governor Mike Huckabee also prefers a privatized Social Security system but says he opposes benefit cuts.  The problem is benefits would have to be cut to create private accountsJohn Kasich has also supported privatizing Social Security.

No doubt, conservatives will remind us that over the long-term the market has been good to us.  Maybe so, but as previous market collapses have shown, retirees don’t have the benefit of the long-term to rebuild savings now lost.  

“Look at successive 45-year periods, as I did for my 2005 book, "The Plot Against Social Security," and you find huge variability. The average worker who invested $1,000 every year in the stock market starting at age 20 in 1954 would have $470,000 when he or she was ready to retire in 1998. But the worker who started just five years later, in 1959, would end up with only $234,000 at age 65--half as much--despite investing exactly the same sum over the same time span. 

Market crashes could destroy a nest egg that took a lifetime to nurture. A near-retiree with, say, a half-million in stock in 2007 had just over $300,000 a year later, following a 37.22% plunge in 2008. Those who held fast managed to recover their losses, but that took five and a half years--and what about those who didn't have the luxury of time?”...Michael Hiltzik, Los Angeles Times

Trading Social Security’s guaranteed benefit for a ride on Wall Street makes no sense for Americans who need to be secure in their retirement.  That’s true whether the market is up or down.  

Populism, Promises and Privatization: Mike Huckabee and Social Security

Former Governor and GOP Presidential hopeful, Mike Huckabee, found out early in the primary race a populist tone combined with a promise not to cut Social Security and Medicare benefits would provide a political opportunity to distinguish himself from the GOP pack who’ve been racing to see who could cut more middle-class benefits faster.

Unfortunately, Huckabee’s Oped in the DesMoines Register today made it abundantly clear that, in spite of his rhetoric, his actually plans for the programs are just more of the same: repeal Obamacare and the billions in benefits and years of solvency that comes with it, privatize the programs, and replace Social Security’s funding with a regressive tax changing the program from an earned benefit into a welfare program.

You have to ask yourself, is this really how a champion of Social Security and Medicare describes these programs?

“Washington confiscates money from every American’s paycheck”

“The government grabs that money”

“Washington has been pick-pocketing us every day of our working lives.”

“Washington put a gun to your head and robbed it from your paycheck.”

NCPSSM President/CEO, Max Richtman reacted to Huckabee’s piece this way:

“While it’s encouraging to see one GOP presidential candidate finally acknowledge that Social Security and Medicare benefits should not be cut (“Don’t Cut Benefits America’s Seniors already paid for” Aug 12, 2015), it’s also clear Governor Huckabee’s reasoning is built on a flawed political premise that Social Security and Medicare were built through federal ‘confiscation’ and ‘pick-pocketing.’

No doubt, this plays well with the candidate’s Tea Party base, especially those who are conflicted in their hatred of government and love for its two largest programs, Social Security and Medicare.  However, it’s clear Huckabee’s views have far more in common with the GOP Presidential pack than the American people who value these programs in their current form, not the privatized preference he supports.  Taxing “illegals, prostitutes, pimps, drug dealers,” to pay for Social Security doesn’t seriously address income adequacy or long-term solvency while repealing Obamacare would steal years of solvency from Medicare and billions in new benefits for seniors. 

The American people, of all ages and parties, support Social Security and Medicare because they work.  Promising to protect benefits, while maligning the very essence of these programs and supporting the same old GOP prescriptions may be a good political strategy but it has little to do with improving the programs for generations of Americans.”...Max Richtman, NCPSSM President/CEO

Not mentioned in his Des Moines Register piece, and only rarely discussed, is the fact the Huckabee also supports various forms of privatization ranging from ending Social Security’s guaranteed monthly benefit in exchange for a lump-sum payment to private accounts for future generations. 

“Instead of signing up for Social Security sometime between the ages of 62 and 70, which is currently the only option for eligible Americans, and receiving a monthly benefits check, Huckabee wants to offer a one-time, lump-sum cash out benefit at age 65 to participants that would be completely free of taxation. Per Huckabee, it would remove the government's ongoing involvement in providing for seniors, and it would potentially allow seniors the opportunity to invest their lump-sum payment in order to achieve inflation-topping returns.”  Motley Fool

Sound familiar?  It should, as it’s the same send-your-Social-Security-to-Wall-Street goal expressed by President George Bush during his failed campaign a decade ago to privatize Social Security – delivered in a slightly different way.  Apparently everything old is new again.

Huckabee also uses Social Security and Medicare, based on his misdiagnosis of the long-term solvency issue, to defend a terribly regressive tax policy -- the Fair Tax -- which rewards the rich and punishes everyone else: 

“Citizens for Tax Justice and the congressional Joint Committee on Taxation have each found that to raise the same amount of revenue as current law, the sales tax rate would have to be about 50 percent.

A study by the Institute on Taxation and Economic Policy (ITEP) found that under the “Fair Tax,” the top 1 percent of taxpayers would receive an average annual tax cut of $225,000. Meanwhile, the plan would increase taxes by about $3,200 on average on the bottom 80 percent of taxpayers. In other words, Huckabee’s tax plan would significantly increase taxes on the overwhelming majority of Americans to pay for huge tax cuts for the very wealthiest Americans.”

Time will tell if seniors will take the “I won’t cut your benefits” bait and ignore the details of Governor Huckabee’s plans for Social Security and Medicare.  As is always the case in every political campaign, the devil is in those details.  

Why Simply Celebrating Medicare's 50th Anniversary Isn't Enough

As we celebrate Medicare’s 50th anniversary this week it’s important to do more than just cut the cake…we must also educate and advocate. That’s because even though the American people clearly understand how vital Medicare and Medicaid are to families, too many politicians (especially those running for the GOP Presidential nod) apparently still don’t get it. 

Economist and New York Times columnist Paul Krugman wrote today about these “Zombies Against Medicare,” including their refusal to acknowledge that all the bad things they’ve predicted about Medicare for five decades have never actually happened, Jeb Bush’s promise to end Medicare and especially the Republican Party’s never-ending quest to repeal the Affordable Care Act.

“And then a funny thing happened: the act’s passage was immediately followed by an unprecedented pause in Medicare cost growth. Indeed, Medicare spending keeps coming in ever further below expectations, to an extent that has revolutionized our views about the sustainability of the program and of government spending as a whole.Right now is, in other words, a very odd time to be going on about the impossibility of preserving Medicare, a program whose finances will be strained by an aging population but no longer look disastrous. One can only guess that Mr. Bush is unaware of all this, that he’s living inside the conservative information bubble, whose impervious shield blocks all positive news about health reform.” 

Medicare advocates briefed the press today on the importance of this 50th anniversary and the ongoing battle to preserve and expand the program. 

“Anyone who thinks these programs aren’t under threat should just look at where the GOP presidential candidates stand on these issues.  Every prediction made by opponents about these programs…from claiming 'socialism' to 'they won’t work'…have been proven wrong.” Brad Woodhouse, President of Americans United for Change 

“It’s time for GOP leaders to stop threatening us with cuts and repeal, and start proposing truly bold ideas that include benefits expansion, raising the wage cap, enacting an affordable long term care program, shifting to a fully-developed consumer price index for the elderly, and negotiating drug prices. That would be a real platform for real Americans.” Max Richtman, NCPSSM President/CEO 

As the 2015 Trustees Report release last week shows, Medicare’s health has greatly improved since health care reform was passed.  Not only did the ACA provide improved benefits for seniors its long-term solvency has been extended by 13 years.  Congress should be building on these reforms to improve the program rather than continuing a politically myopic and factually bankrupt quest to “save” Medicare by killing it.

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