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Why a Medicare Flat Line is Good News for Seniors

While a flat line in the medical world is usually bad news...when it comes to health care costs in Medicare, this flat line is a good thing.  We reported earlier on the latest Congressional Budget Office forecast for Medicare and why that news is being ignored by Washington’s well-financed anti-entitlement lobby and the fiscal hawks they support in Congress. 

Today, the New York Times provides even more good news for Medicare and bad news for anti-Social Security and Medicare scolds:

“Medicare spending isn’t just lower than experts predicted a few years ago. On a per-person basis, Medicare spending is actually falling.

If the pattern continues, as the Congressional Budget Office forecasts, it will be a rarity in the Medicare program’s history. Spending per Medicare patient has almost always grown more rapidly than the economy as a whole, often by a wide margin.”

 

For years now, Wall Street funded fiscal hawk groups have been promising fiscal Armageddon unless Congress immediately cut benefits to middle-class seniors and their families. Contrary to that billionaire-financed bluster, the truth is there are clearly ways to see savings in Medicare through lower health care costs, not just by slashing benefits:

“The recent pattern reflects two main factors. One is that the baby boom generation is entering the program. In the long term, that’s a problem for Medicare’s finances because the number of people it must care for is going to surge. But in the short term, it skews the group enrolled in Medicare toward a younger, healthier population.

The second factor is more surprising and consequential. Over the last few years, Medicare patients have been using fewer expensive medical services, particularly hospital care and prescription drugs. The budget office is increasingly persuaded that such a pattern is going to last for a while.”

And there are even more proposals that could be enacted which don’t single out seniors for benefits cuts.  How about allowing Medicare to negotiate for lower drug costs like the VA does for veterans?  Or fully allow the proposed reductions in billions of dollars in federal overpayments to MA private insurance companies to be enacted, as proposed by the Affordable Care Act?  This CBO report clearly proves there are ways to manage costs beyond the benefit-cutting or privatization schemes preferred by Congress’ self-proclaimed deficit hawks:

Joan McCarter at Daily Kos sums it up best this way:

“Here's what's particularly significant in this: "Reductions made in the last four years alone are responsible for 10-year savings of more than $715 billion, which dwarfs nearly every deficit-reduction measure currently under discussion." Take that, Paul Ryan.

Here's the thing. Medicare is going to be facing issues when the baby boom cohort gets older and sicker. But this trend in shrinking costs gives policymakers time to look at reforms that do not require benefit cuts, that don't require pain for Medicare patients. That means there's no reason for another Paul Ryan budget that slashes the safety net or for another catfood commission calling for raising the Medicare eligibility age or more cost-sharing by patients. Take note, Democrats, and stop with the deficit fetish already.”

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.

 

 

 

Social Security Made the Difference in Hawaii Senate Primary

Hawaii’s Democratic Senate primary win for Sen. Brian Schatz sends an important signal to candidates nationwide about the huge role Social Security can and will play in their Congressional re-election bids.  From the chained CPI to the Bowles-Simpson amendment, many centrist “new Democrats” like Hawaii’s Rep. Colleen Hanabusa, have quietly cast votes for proposals designed to cut benefits to millions of retirees, people with disabilities and their families, while at the same time promising to protect benefits back home.

In Rep. Hanabusa’s case, there were clear differences between her and opponent Sen. Brian Schatz on Social Security.  While Schatz supports boosting benefits and co-sponsors legislation to do that, Rep. Hanabusa voted in support of the Bowles-Simpson amendment to HR 444 which advocated for Social Security benefits cuts, raising the retirement age and deficit reduction through 75% in cuts an only 25% in revenue. The Bowles-Simpson plan would be disastrous for America’s families, which is why NCPSSM provided a rare primary endorsement to Senator Schatz:

“You understand, too, that Social Security benefits are earned and that this most successful social insurance program ever should not—must not!—be undermined as some have proposed by cutting benefits.  You appreciate that Social Security has not contributed one dime to the nation’s debt and proposals to raise the retirement age and reduce the annual cost-of-living adjustment in the name of bipartisanship would be disastrous to Americans of all ages.  You have underscored your commitment to Social Security by joining with Senate colleagues supporting the “Strengthening Social Security Act” and opposing the oft-cited “chained Consumer Price Index.” NCPSSM Endorsement Letter to Sen. Bryan Schatz, May 27, 2014

Senator Schatz isn’t the only candidate who understands just how disconnected Washington has become from the majority of Americans who -- across all ages and political parties -- oppose cutting Social Security.

Two Democrats in tough Senate races — Mark Begich and Jeff Merkley – have already staked out aggressive postures on expanding Social Security. It’s also supported by Elizabeth Warren and Tom Harkin, and 70 members of the Congressional Progressive Caucus.

Expanding Social Security would have to be paid for by lifting or changing the cap or some other means, which could leave Dems vulnerable to charges they are raising taxes. But Brown brushed off that worry. “Democrats win the argument by saying Republicans again are cutting taxes on the rich to deny Social Security beneficiaries the expanded Social Security they should get and have earned,” Brown said. “Most of us should be willing to make that argument.”  Washington Post, May 2014

Until now, too many in Congress have not been willing to make that argument and refocus its attention on the retirement deficit facing millions of working Americans.  Hopefully, the Hawaii experience will change all that.


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