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From the category archives: Aging Issues

African Americans Rely on Social Security for More of Their Retirement Income


As we celebrate Black History Month, it’s the perfect time to highlight how important Social Security is to the African American community.  The National Committee’s policy experts have prepared a new analysis of Social Security and African Americans. Here are some key points:

While Social Security is expected to be only one part of a person's retirement income, many minorities rely on it for more of their income. Because African Americans tend to have lower earnings and less pension coverage than White Americans, Social Security is extremely important for African American retirees.  Based on the most recently available data:

  • Almost three-fourths (72 percent) of African American beneficiaries rely on Social Security for at least half their income, compared to less than two-thirds (65 percent) of all beneficiaries.
  • Almost 50 percent of African American beneficiaries rely on Social Security for 90 percent or more of their income.
  • Approximately 37 percent of African American beneficiaries rely on Social Security for all of their income.

Minorities rely more heavily on Social Security due to a lack of other income in retirement. Few elderly minorities receive income from pensions and assets. The greatest disparity is in the receipt of income from assets.  Again, based on the most recent data,

  • 26 percent of African Americans received income from assets, compared with more than 55 percent of Whites.
  • 21 percent of African Americans 65 years old and over reported receiving income from private pensions or annuities, compared to 28 percent of Whites 65 years old and older.

IMPROVING SOCIAL SECURITY IS ESSENTIAL

As we have shown, Social Security is our nation’s most important and effective income security program for American workers, retirees and their families and is even more central to the economic security of African Americans.  Maintaining the adequacy of Social Security by improving it to better meet the needs of America’s seniors is essential.  Toward that end, the National Committee supports a number of improvements to boost Social Security, including the following:

  • Strengthen the COLA. 
  • Improve the Basic Benefit for all Current and Future Beneficiaries. 
  • Enhance the Special Minimum Benefit. 
  • Restore College/Vocational School Student Benefits.   

State of the Union 2016 – Will Washington Really Strengthen Social Security?

You don’t have to agree with his politics to acknowledge that President Obama’s final State of the Union address was, as promised, an aspirational and ambitious look forward.  The New York Times summed it up this way:  

“In a prime-time televised speech that avoided the usual litany of policy prescriptions, Mr. Obama used his final State of the Union address to paint a hopeful portrait of the nation after seven years of his leadership, with a resurgent economy and better standing in the world despite inequality at home and terrorism abroad.

He acknowledged that many Americans feel frightened and shut out of a political and economic system they view as rigged against their interests, even as he offered an implicit rebuke of Republicans who are playing on those insecurities in the race to succeed him.

‘As frustration grows, there will be voices urging us to fall back into tribes, to scapegoat fellow citizens who don’t look like us, or pray like us, or vote like we do, or share the same background,’ Mr. Obama said. ‘We can’t afford to go down that path.’ "

In a sweeping speech that touched on issues as diverse as curing cancer to fighting ISIS, retirement security played a small role.  However, it did provide the President an opportunity to deliver one of his best one-liners of the night:

“After all, it’s not much of a stretch to say that some of the only people in America who are going to work the same job, in the same place, with a health and retirement package, for 30 years, are sitting in this chamber. For everyone else, especially folks in their forties and fifties, saving for retirement or bouncing back from job loss has gotten a lot tougher.

That’s why Social Security and Medicare are more important than ever; we shouldn’t weaken them, we should strengthen them.”

American families know first-hand what this looming retirement crisis feels like. About half of households age 55 and older have no retirement savings and a third of current workers aged 55 to 64 are likely to be poor or near-poor in retirement. Unfortunately, the median retirement account balance is a puny $3,000 for all working-age households and $12,000 for near-retirement households. 


However, just as with the climate change debate, many conservatives continue to deny the retirement crisis even exists.  This too often used head-in-the-sand political approach led the President to challenge his Congressional audience: 

“How do we reignite that spirit of innovation to meet our biggest challenges?  

Sixty years ago, when the Russians beat us into space, we didn’t deny Sputnik was up there. We didn’t argue about the science, or shrink our research and development budget. We built a space program almost overnight, and twelve years later, we were walking on the moon.”
 
Undoubtedly, acknowledging the economic challenges facing average Americans has to be the first step to find solutions; however, equally important is for citizens to hold their elected officials accountable for saying what they mean and meaning what they say.  Too often, candidates promise to “strengthen” Social Security while on the campaign trail when, in truth, they actually support plans to slash benefits.  They promise to protect Social Security and Medicare while actually planning to privatize them.  

What does the candidate asking for your vote really mean when he/she promises to “strengthen” Social Security and Medicare?  For the majority of Americans of all political parties, strengthen means no cuts to benefits.  A growing movement also supports boosting benefits; however, voters can't assume the same of candidates on the campaign trail in 2016.  

So, our challenge to all voters is to ask each and every candidate who hopes to come to Washington,“What are your true plans to strengthen Social Security?”


New Report: Hospitals Using Observation Status to Avoid Medicare Fines

For years, patients and advocates have been warning of the increasing use of the patient classification status known as “observation stays.”  A growing number of patients covered by Medicare, have spent days in the hospital, only to be surprised with large out-of-pocket costs and an inability to access long-term care because they were totally unaware the hospital never actually admitted them as a patient.  Legislation signed by President Obama this summer was designed to limit the use of “observation stays.”

“The Notice of Observation Treatment and Implication for Care Eligibility Act would require hospitals to notify beneficiaries receiving observation services for more than 24 hours of their status as an outpatient under observation. The written notification would have to explain that because the beneficiary is receiving outpatient rather than inpatient services, they will be subject to cost-sharing requirements that apply to outpatient services. The notice also must say that the beneficiary's outpatient stay will not count toward the three-day inpatient stay required for a beneficiary to be eligible for Medicare coverage of subsequent skilled-nursing facility services.” ...Modern Healthcare

Now, a new analysis by the Wall Street Journal shows that observation stays have been used even more than previously documented.  In fact, the WSJ reports observation stays at hospitals have increased 156% and explains why many hospitals have lowered their readmissions and thus the fines that come from too many Medicare patients returning to the hospital.  

“...at hospitals around the country, more patients are entering or re-entering hospitals under something called “observation status”—a category that keeps them out of the readmission tallies. Patients on observation status can remain in the hospital for days, and typically receive care that is indistinguishable from inpatient stays, experts say. But under Medicare billing rules, the stays are considered outpatient visits, and as such, don’t trigger penalties under the health law.

The Journal’s analysis of Medicare billing data shows that increases in observation stays can skew the readmission numbers, letting hospitals avoid penalties even if patients continue to have complications and return for repeat visits. Observation stays generally are cheaper for the government, but in some cases they can lead to big bills that are the patient’s responsibility.”

In other words, rather than managing care to reduce the costs of readmission, many hospitals are relying on an administrative sleight of hand to avoid penalties.

Across the roughly 3,500 short-term acute-care hospitals—often referred to as general hospitals—that face the penalty program, the Journal identified a drop in readmission rates of about 9% from 2010 to 2013 for penalty-program conditions. Follow-up observation-stay rates increased about 48%. The rise in observation stays accounted for about 40% of the decline in readmissions, by the Journal’s measure.

So while hospitals avoid paying penalties and Medicare pays less to beneficiaries, we all know who ends up footing the bill again -- seniors and their families. 

Congress Investigates Skyrocketing Rx Drug Prices

It’s certainly no surprise to Medicare beneficiaries that America’s prescription drug industry continues to take a growing share of the average American’s health care costs. A new survey by Kaiser Family Foundation shows drug expenses actually takes an even bigger bite than experts previously thought.   

“High drug prices have been in the news because of costly drugs to treat Hepatitis C, among other illnesses, and because elected officials and political candidates have been talking about drug costs. Rising drug prices, expanded coverage of the uninsured under the Affordable Care Act, and an improving economy have also contributed to an uptick in the rate of increase in health spending. But depending on what you count and how you count, drug spending may be an even larger problem than many thought. It clearly is for employers, who foot a large share of the nation’s health-care bills.”...Drew Altman, Kaiser Family Foundation

The Senate Special Committee on Aging has launched an investigation into recent cases in which pharmaceutical companies acquired a decades-old drug and then increased the price significantly.

The committee singled out four companies: Turing, Valeant, Rodelis and Retrophin.  USA Today detailed some of the outrageous price hikes and their impact on Americans who needed life-saving prescription drugs:

Spiraling costs for two heart drugs owned by drugmaker Valeant Pharmacueticals International increased the Cleveland Clinic's total drug budget by $8.6 million, hearing testimony showed.

North Carolina doctors treating a baby for toxoplasmosis were unable to get the Daraprim medication that targets the parasitic disease because Turing Pharmaceuticals had raised the price 40 times beyond its original cost. The doctors instead had to use an alternative medication.

Erin Fox, director of the drug information service at the University of Utah Health System, testified that a price hike from $440 to $2,700 forced her to keep a Valeant heart drug locked up after removing it from medication carts where it previously had been available.

Sen. Claire McCaskill, D-Mo., the committee's ranking minority member, said the committee's continuing investigation had found a pharmaceutical industry "market failure."

"And when there's a market failure, the government has a role in addressing it," said McCaskill.

In Medicare’s case, the government also has the ability to address the high costs of prescription drugs, saving the program and seniors money. One simple solution is to allow Medicare to negotiate prices for prescription drugs which could save the program and its beneficiaries billions of dollars.

“The law that established Medicare Part D explicitly prohibits the prescription drug program from negotiating lower drug costs for beneficiaries. The major pharmaceutical companies adamantly defend this rule, contending that the higher prices are necessary to support the industry’s investment in research and development. However, a comparison of the prices paid by Part D with those paid by the Department of Veterans Affairs (VA) and other agencies shows that Part D could save billions of dollars through the use of additional negotiation techniques. Our analysis finds that the VA attains drug prices that, on average, are 48 percent lower than Part D plan prices for the top 10 drugs covered by the program.” ...”Price Negotiation for the Medicare Drug Program: It is Time to Lower Costs for Seniors,”  NCPSSM Issue Brief


High RX Drug Prices Certainly Not News to Seniors

While Turing Pharmaceuticals Martin Shkreli’s decision to raise the cost of a drug 5,000% certainly got a lot of attention earlier this year, the fact that the high cost of prescription drugs in America continues to soar beyond the reach of many isn’t news to anyone who’s made a trip to the pharmacy lately.  In fact, a Kaiser Family Foundation poll found a large majority of the public (72%) view the cost of prescription drugs as unreasonable.

The federal Health and Human Services Department has signaled they’re looking for a way to curb rising prescription drug prices.  They need to do so because rising drug costs have now overtaken a long stretch of stable premiums.  In other words, while Medicare has successfully controlled premiums those successes are lost when seniors in Part D continue to face growing prescription costs. 

“Andy Slavitt, acting administrator for the Centers for Medicare and Medicaid Services, said his agency spent $140 billion on prescription drugs and that spending on medicines increased 13 percent in 2014 while overall health spending grew 5 percent.” ....HHS Airs Concerns About Rising Drug Prices, Congressional Quarterly

“Spending on medicines increased 13 percent in 2014, compared to 5 percent for health care overall, Slavitt said. It was the highest rate of drug spending growth since 2001.”...Obama administration sets stage for a debate on drug costs, Associated Press

One simple solution is to allow Medicare to negotiate prices for prescription drugs which could save the program and its beneficiaries billions of dollars.

“The law that established Medicare Part D explicitly prohibits the prescription drug program from negotiating lower drug costs for beneficiaries. The major pharmaceutical companies adamantly defend this rule, contending that the higher prices are necessary to support the industry’s investment in research and development. However, a comparison of the prices paid by Part D with those paid by the Department of Veterans Affairs (VA) and other agencies shows that Part D could save billions of dollars through the use of additional negotiation techniques. Our analysis finds that the VA attains drug prices that, on average, are 48 percent lower than Part D plan prices for the top 10 drugs covered by the program.” ...”Price Negotiation for the Medicare Drug Program: It is Time to Lower Costs for Seniors,” NCPSSM Issue Brief

It’s time to hold America’s drug makers accountable. 

“Heather Block, a breast cancer patient from Lewes, Delaware, told the forum that her costs have been so high she could face bankruptcy if she beats the odds against her advanced disease. ‘Innovation is meaningless if nobody can afford it,’ she said”... Associated Press

 

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