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Happy 4th of July from NCPSSM

If They Can't Cut Benefits--Cutting Social Security Administrative Funding is the GOP Fall Back Strategy

 

It’s often been said budgets are the best indicator of a nation’s priorities because talk is cheap but where Congress actually spends taxpayers’ money is what really matters.  If you believe that premise, then American seniors have a lot to worry about.  On the Medicare side of the ledger, we’ve already reported about efforts by GOP Senate appropriators to kill the vitally important State Health Insurance Assistance Program (SHIP) program: 

“The SHIP network provides critical information upon which people with Medicare rely to make informed decisions about their coverage options and enrollment decisions,” says Judith A. Stein, Executive Director, Center for Medicare Advocacy, Inc. “The SHIPs are critical to providing assistance with these increasingly complicated choices. People with Medicare and their families from all over the country depend on SHIPs as the key source of unbiased guidance.

‘Senate appropriators have turned their backs on a growing number of people who will need SHIP services to navigate the complexities of Medicare coverage by proposing to eliminate program funding. This kind of penny-wise, pound-foolish lawmaking will threaten the economic security of millions of Medicare beneficiaries and their families.”…Max Richtman, NCPSSM President/CEO”

The news is just as bad on the Social Security side as the Senate Appropriations Committee cut the agency’s administrative budget request by nearly 5.5% at a time when 10,000 Americans a day turn 65.  As Los Angeles Times columnist, Michael Hiltzik, reports this cut is especially telling:

“In fiscal terms, there’s no earthly reason for Congress to be stingy with Social Security’s administrative budget. The money comes out of workers’ payroll taxes and the system’s other revenue, not from the general treasury. And it’s spent with painstaking care: The Social Security Administration is one of the government’s most efficient agencies, with a core administrative budget of 0.7% of benefits, devoted to upholding a decades-old reputation for superb customer service.” 

Politically, this effort is a continuation of a decades-long campaign to diminish successful government programs which, since the vast majority of the American public of both parties supports them, can’t be killed outright.  Whether it’s right-winger Grover Norquist’s goal "to get it {government} down to the size where we can drown it in the bathtub" or former Speaker Newt Gingrich’s plan to “starve the beast” by slashing taxes on the wealthy and underfunding government programs conservatives don’t like, Republican efforts to weaken programs like Social Security and Medicare continue in full force.   

In the case of the Social Security Administration, the Senate Special Committee on Aging reports that years of Congressional under funding is clearly taking its toll.

“At a time when Baby Boomers are retiring and filing disability and retirement claims at record numbers, SSA has shed 11,000 workers agency-wide over three years. Hiring freezes resulted in disproportionate staffing across the nation’s 1,245 field offices, with some offices losing a quarter of their staff. These past five years have also served witness to the largest five-year decline in the number of field offices in the agency’s 79-year history as 64 field offices have been shuttered, in addition to the closure of 533 temporary mobile offices known as contact stations. SSA has also reduced or eliminated a variety of in-person services as it attempts to keep up with rising workloads and shift seniors and others online to conduct their business.”…Reduction in Face-to-Face Services at The Social Security Administration

The Center on Budget and Policy Priorities detailed the real-life effects this has on millions of American seniors:

“Before the budget cuts, more than 90 percent of applicants could schedule an appointment within three weeks; by 2015, fewer than half could.”

“Starting in 2011, budget cuts forced SSA to freeze hiring, and the teleservice centers lost many agents through attrition.  In just three years, SSA lost more than 15 percent of its 800 number staff. Wait times and busy rates spiked.  In 2014, wait times peaked at over 22 minutes and busy rates at 13 percent.”

Again, let’s not forget that American workers have contributed a lifetime to support Social Security.  This isn’t even general revenue at issue.  While the numbers are important, they only offer a glimpse into what these cuts actually mean to average Americans, many who find themselves at the Social Security office during some of the hardest times of the lives:

“For me, this was just one bill. But there’s much more at stake for many people who need the benefits offered by the Social Security Administration, who are not in a position to put this kind of time or legwork in. Many who visit are poor, old, widowed, homeless, or disabled, and if they aren’t one of those things themselves, they are likely caring for someone who is. They are at the end of their rope, perhaps experiencing the worst scenario of their lives: They need a wheelchair. They’ve gone blind. Their spouse died. Or, like me, they have a baby in the NICU.”…Laura Kwerkel, The Atlantic

The battle to fully fund the Social Security administration and the Medicare SHIP program continues.  Chances are good your Member of Congress will tell you protecting these programs is a “top priority” but their actual vote on these particular programs could likely tell you a very different story.

Why the Social Security COLA matters

There’s no more closely watched Washington announcement for seniors than word of what the next year’s Cost of Living Adjustment will be for Social Security beneficiaries.  While the final decision isn’t announced until October of each year, the annual Social Security Trustees Report usually provides a sneak peak a few months early, as it did last week.

News that seniors should prepare for no increase (or a very small increase) for the second year in a row and the fourth time since 2010 has many understandably worried.  Contrary to conservative /fiscal hawk mythology, which dominates so much of the political discourse in Washington these days, American Social Security beneficiaries aren’t living high on the hog.  In fact, Americans know first-hand that the average $1,300 monthly Social Security retirement benefit isn’t too generous.  They know that this year’s zero cost of living allowance isn’t too generous.  They see a growing amount of their Social Security check going to pay for rising healthcare costs and skyrocketing drug prices.  It’s no wonder the annual COLA announcement adds to their frustration. 

But here’s the thing…Congress didn’t vote or even “decide” to give you a tiny or zero COLA next year.  That number is cooked into the law.  The only way to change the COLA is to convince your Members of Congress to support a new formula that actually measures the cost of living American seniors face.  

This is how current law works: 

“If there is an increase in inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was made to the third quarter of the current year. “ …NCPSSM, “Call for COLA Recalculation,” June 2015 

That means the Social Security COLA is based on the costs of goods and services purchased by wage earners, not retirees.  That’s a real problem since the purchases made by retirees are vastly different than younger Americans still in the workforce. 

“The primary source of the difference in spending patterns is medical expenses, which for most years have increased at a higher rate of inflation.  Seniors spend three times more than younger consumers on health care, including prescription drugs, medical co-pays and deductibles and non-covered expenses.  In fact, older Americans spend 23 percent of their average Social Security check for Parts B and D cost-sharing in addition to paying for health services not covered by Medicare. The following chart illustrates a sample of the increases in health care expenses compared to the increases in Social Security benefits:”

 

 

This is why we have long advocated for the adoption of a cost of living formula for the elderly that measures the expenses retirees actually face.

As early as the 1980’s, Congress recognized the problems with using the CPI-W as the basis for preserving the spending power of Social Security benefits, and in 1987 directed the Bureau of Labor Statistics (BLS) to begin work on an index focused on the elderly.  As a result, the BLS created the Experimental CPI for Americans 62 Years of Age and Older (CPI-E) and calculated estimates of the index dating back to December 1982.  The CPI-E continues to be classified as experimental because its sample size is smaller than the CPI-W, and is therefore subject to a greater sampling error.

The National Committee believes a fully developed CPI-E represents the best hope for correcting problems with the CPI-W for America’s seniors.  But Congress must provide the BLS with the funding needed to finish work on the CPI-E and make it the standard for calculating COLA adjustments for Social Security, Veterans, and Federal Civilian and Military retirement benefits. 

America’s seniors worked hard for their earned benefits and they deserve to have their standard of living and purchasing power preserved through an accurate COLA calculation.

 

Why Silence Isn’t Golden for Millions in Medicare

Nearly 30 million Americans suffer from hearing loss yet a small percentage have hearing aids.  Why? Many simply can’t afford the high cost...and Medicare does not cover hearing aids and related audiology services. 

Currently, Medicare Part B only covers hearing rehabilitation services for cases caused by an illness or accident. Progressive, age-related hearing loss is not covered, leaving many seniors to pay for their own hearing exams and hearing aids. Hearing aids are incredibly expensive, ranging from $600 to over $5,000 each. These high price tags discourage many seniors from seeking a very basic solution that could dramatically improve their lives.

Research shows even mild hearing loss can double the risk of dementia.  Untreated hearing loss also contributes to balance problems and falls, isolation, depression and a greater incidence of stress-related diseases like diabetes and heart disease.  Earlier this month, a Report from the National Academies of Sciences, Engineering, and Medicine found that hearing loss is a public health priority requiring national attention.

That’s why the National Committee is proud to join the Center for Medicare Advocacy, Rep. Rosa DeLauro (D-CT), Rep. Jim McDermott (D-WA) and hearing expert Frank R. Lin, M.D., in a briefing today on the need to expand Medicare to include hearing aids and treatment:

“Intervention would reduce the risks which come with hearing loss. This is hugely important in the case of dementia which, with the aging of the baby boomers, is a massive public health issue now.  Hearing loss may be one of the few modifiable risk factors that could reduce the risk of dementia; however, hearing health care is still broadly inaccessible and expensive.”...Dr. Frank Lin, M.D., Ph.D., Johns Hopkins School of Medicine and Bloomberg School of Public Health

“As always, there will be the critics who say “we can’t afford this” Well, yes we can. When the Affordable Care Act passed, 716 billion dollars in savings from Medicare were plowed right back into the program to provide expanded services such as preventive care and screenings at no cost to beneficiaries. And there are strategies such as restoring the pharmaceutical drug company rebates for medicines prescribed to dual-eligibles, people on both Medicare and Medicaid, which, according to CBO, could generate 121 billion dollars over ten years. If the Congressional will is there, we know it can be done.”...Max Richtman, NCPSSM President/CEO


Legislation introduced by Reps. Debbie Dingell (H.R. 1653), Jim McDermott (H.R. 5396) and Alan Grayson (H.R.3308) would close this gap in Medicare coverage. This legislation is vital to the health security of millions of Americans.

“Since its implementation in 1965, Medicare has enhanced health care for millions of Americans. But there are still major gaps in coverage. Given the growing numbers of older Americans who suffer from hearing loss, it’s time for that to change,” said Judith Stein, J.D., Executive Director of the Center for Medicare Advocacy.

"We don’t know exactly how much we spend on cases where we’re dealing with depression because they’re isolated...and hearing loss contributes to both. It’s absolutely critical that for an acceptable quality of life that people need to be able to hear the world around them.  In order for seniors to keep a good quality of live, just keeping them alive isn’t enough, we must have good hearing and dental care. This is not beyond our capacity to provide this for seniors.”...Rep. Jim McDermott (D-WA) 

“We’ve got millions of Americans over 45 effected by hearing loss. If untreated it has devastating impacts on our nation.  Medicare coverage should include audiology care, period. The promise of Medicare to keep Americans healthy is at stake.  Medicare should cover all the vital health needs of seniors. Why are we arbitrarily leaving some out?  There’s no reason for Medicare to remove the head from the body.”...Rep. Rosa DeLauro (D-CT)


Please call your Member of Congress or Sign our Congressional Petition today and tell them:

  We need hearing care coverage in Medicare.

(800) 998-0180

The Truth about the 2016 Social Security and Medicare Trustees Report

Social Security is still fully funded for nearly two decades, a miniscule COLA increase in 2017 likely, and health care reform continues to preserve Medicare’s solvency.

“What’s likely to be missing in headlines about today’s Social Security Trustees Report is that the program remains well-funded with total income, again, projected to exceed expenses. However, in order to head off a benefit cut in 2034 Washington should embrace the growing movement to lift the payroll tax cap and expand benefits for the millions of seniors struggling to get by on an average $1,300 retirement benefit.

The Trustees also project there will be a tiny .2% cost of living adjustment next year yet Medicare premiums will increase in 2017. Seniors continue to see their modest Social Security benefits eaten away by growing healthcare costs which illustrates, once again, that the current Social Security COLA formula isn’t accurately measuring seniors’ expenses. Congress needs to adopt a fully developed CPI for the elderly (CPI-E) and begin work on the many Social Security expansion bills now languishing in the House and Senate.”...Max Richtman, NCPSSM President/CEO

Here are some of the key points in the 2016 Trustees Report:

  • Trustees project Social Security will be able to pay full benefits until the year 2034, the same as projected last year.  After that, Social Security will still have sufficient revenue to pay about 79% of benefits if no changes are made to the program.
  • Social Security remains well-funded. In 2016, as the economy continues to improve, Social Security’s total income is projected to exceed its expenses. In fact, the Trustees estimate that total annual income will exceed program obligations until 2020. 
  • Trustees project a .2% Cost of Living Adjustment increase.
  • The Trustees report there is now $2.81 trillion in the Social Security Trust Fund, which is $23 billion more than last year and that it will continue to grow by payroll contributions and interest on the Trust Fund's assets.   

On Medicare, the 2016 Trustees report shows slowing the growth of health care costs has improved Medicare’s Trust Fund

  • Medicare Part B premiums are projected to increase by only a very small amount for about 70 percent of beneficiaries in 2017 from $104.90 to $107.60. The standard monthly premium is projected to increase from $121.80 to $149.00 while the annual deductible is projected to increase from $166 to $204 for all beneficiaries.
  • Medicare solvency remains greatly improved thanks to passage of healthcare reform, with the program paying full benefits until 2028, 11 years later than was projected prior to passage of the Affordable Care Act. However, this is two years earlier than projected in 2015.
You can also read: 

Treasury Secretary Jack Lew's comments

The Social Security Trustees Report 

The Medicare Trustees Report 

The Economics Policy Institute also has a terrific description of the political spin which always accompanies the release of these reports.  




Questions?

Have a Social Security or Medicare question?




 

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Pamela Causey
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Causeyp@ncpssm.org(202) 216-8378
(202) 236-2123 cell

Kim Wright
Assistant Director of Communications
Wrightk@ncpssm.org
(202) 216-8414

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