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Social Security & Medicare Finally a Topic of Debate

Ok, not a debate so much as a battle to see who can cut seniors’ benefits faster.  While Trump remains the only GOP Presidential candidate who promises he won’t cut Social Security, even that promise became squishy last night.  More on that, later. 

Here’s just a sampling of some of last night’s comments on what the remaining GOP candidates plan for generations of American families counting on Social Security, Medicare and Medicaid, followed by our comments:


Senator Marco Rubio

Social Security will go bankrupt and it will bankrupt the country with it.”

This is conservatives’ favorite lie.  Social Security isn’t going bankrupt.  According to SSA actuaries, the nearly $3 Trillion Trust Fund will be depleted in 2034 (as planned) to cover the baby boomer generation.  After that, there will still be enough income coming into the program to pay 79 percent of all benefits owed. If Congress does nothing seniors will face a 21% benefit cut.  A 21% benefit cut is not bankruptcy and certainly could not cause America’s bankruptcy.

“Medicare could very well become the option of using my Medicare benefit to buy a private plan that I like better”

The Republican dream of giving seniors a coupon to go out and buy private health insurance is a favorite of Speaker Paul Ryan and those in Congress who hope to destroy Medicare once and for all.  The program is too popular to kill outright, so they’ve chosen a privatization route for Medicare that is a political kissing-cousin to President Bush’s failed effort to privatize Social Security.  If they can’t kill these programs, conservatives want to (at least) turn America’s most successful retirement and health security programs over to industry so Wall Street, insurance companies and drug makers can profit. 


Senator Ted Cruz

“Social Security right now is careening towards insolvency... We need to see political courage to take this on and save and strengthen Social Security.”

In the classic case of “save” meaning “slash” and “strengthen” meaning privatize, Senator Cruz offers the well-worn conservative trope that cutting benefits to millions of American families while at the same time cutting taxes for the wealthy shows political courage and leadership.  See our comments above on the “careening towards insolvency” nonsense.

“We need to change the rate of growth of benefits so it matches inflation instead of exceeding inflation...we need to have for younger workers, that a portion of your tax payments are in personal accounts.” 

If hard to imagine how anyone can seriously argue that a zero cost of living increase for 3 out of the past 7 years, somehow exceeds inflation.  Seniors, veterans and people with disabilities have seen their costs increase in the same years their COLA was flat.  Social Security beneficiaries need a new COLA formula, one that actually measures seniors’ cost of living.  However, Ted Cruz wants the Chained CPI to cut benefits not to accurately measure inflation.


John Kasich

“I also had a plan in 1999 to save Social Security and take the $5 trillion projected surplus and not only have Social Security for our young people, but also to give them private accounts.”

John Kasich’s plan to “save” Social Security is standard GOP “we-must-slash-it-to-save-it” boilerplate with a little seniors just need to "get over it" thrown in.   Kasich would cut benefits to pay down the debt and privatize Social Security so seniors can watch their contributions ride the Wall Street roller coaster.  Then he’d cut billions more with lower COLA’s through the Chained CPI (again, what’s lower than zero?) and turning Social Security into a welfare program by means testing.


Donald Trump

Since we just wrote about Trump’s Social Security promises (there’s not really a plan) in detail we’ll focus only on last night’s twists.  For the first time ever, Trump’s promises to not cut Social Security benefits were offered with important qualifiers.  For a candidate who has no problem making big promises, last night’s about Social Security have taken on a downright passive tone – as if Trump, as President with potentially with a GOP House and Senate, wouldn’t have the power to leave Social Security benefits alone:

“I will do everything within my power not to touch Social Security”

“...it's my absolute intention to leave Social Security the way it is.”

This speech Trump gave to conservatives at the 2013 Conservative Political Action Conference provides one suggestion as to why he remains the only GOP candidate to promise he won’t cut Social Security & Medicare benefits (hint, it’s not because he loves the programs):   

"As Republicans, if you think you are going to change very substantially for the worse Medicare, Medicaid and Social Security in any substantial way, and at the same time you think you are going to win elections, it just really is not going to happen," Mr. Trump said, adding that polls show that tea partyers are among those who don't want their entitlements changed."  Donald Trump, 2013 CPAC speech, Washington Times

If you missed last night’s debate, you can read excerpts on what the candidates had to say specifically about Social Security, Medicare and Medicaid on our SeniorVote2016 website. 

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CMS Caves to Political Pressure from the Insurance Industry, Again

The Centers for Medicare & Medicaid Services (CMS) has quietly scrapped a policy that required private Medicare Advantage insurance companies facing sanctions to face a reduction in the star ratings consumers use when picking their private health insurance plans.  Unbelievably, CMS (caving to political pressure from the insurance lobby) will allow sanctioned companies to keep their violations hidden from consumers by protecting their star ratings.  Modern Healthcare reports:

The move, which was quietly released by the CMS in a memo (PDF) and shocked many in the industry, will immediately protect hundreds of millions of dollars at Cigna Corp., which had its Medicare Advantage plans sanctioned in January.

“It does seem pretty unusual to make this kind of dramatic change in a memo,” said Tom Kornfield, a vice president at consulting firm Avalere Health and former CMS official. “It sort of comes out of nowhere.”

Richard Lieberman, a Medicare Advantage data consultant at Mile High Healthcare Analytics, said the CMS' decision could be characterized as “a huge gift or even corporate welfare” even though it could help insurers that quickly resolve problems.

“CMS' actions definitely send a mixed message to plans,” he said.

Clearly, there are huge financial rewards for the insurance industry if companies are allowed to violate CMS’ rules and seniors are left in the dark about a company’s sanctions.  CMS is allowing companies like Cigna which has been found guilty of “egregious instances of noncompliance,” including blocking the appeals process for its customers, to continue to reap the rewards of government subsidized bonuses and over payments.

“Star ratings carry clinical and financial impact. The CMS ties bonus payments to Medicare Advantage plans that have at least four stars. Highly rated plans that get sanctioned and thereby lose their high ratings stand to lose millions of dollars in extra payments. But the goal is motivate more insurers to improve their Medicare Advantage operations.” Modern Healthcare

It’s impossible to imagine how -- in this political environment where cutting Medicare benefits has become the “go-to” solution for Members of Congress who claim we can’t afford the program – allowing the nation’s multi-billion dollar insurance industry to keep taxpayer funded bonuses while they are violating federal standards is acceptable policy. 

This decision didn’t happen in a vacuum.  If follows another political cave by CMS last month when it bowed to industry lobbying pressure and decided to raise reimbursement rates for insurance companies rather than trimming back the billions of federal overpayments as required in the Affordable Care Act.  Wall Street and the insurance industry loved the news that taxpayers will continue to overpay Medicare Advantage plans.  They’ll surely love it now that these massive companies will keep their taxpayer-funded overpayments while not being held accountable to serving the seniors who’ve signed up for medical coverage, blissfully unaware that anything is amiss. 

The Wolves of Wall Street, Hillary Clinton and Social Security

The Democratic primary campaign is not over and already there are media rumblings about who is working the inside track to become Hillary Clinton’s Treasury Secretary, if she’s elected President.  Normally, this is the kind of story we read and then move on to the next one (it is only March, after all).  However, David Dayen’s story in The Intercept suggesting that Wall Streeter, privatization supporter and Pete Peterson-connected, Larry Fink, is positioning himself for the Treasury job stopped us dead in our tracks.  Dayen reports:

“Larry Fink, BlackRock’s CEO, has assembled a veritable shadow government full of former Treasury Department officials at his company. Fink has made clear his desire to become Treasury Secretary someday. The Obama administration had him on the short list to replace Timothy Geithner. When that didn’t materialize, he pulled several members of prior Treasury Departments into high-level positions at the firm, which may improve the prospects of realizing his dream in a future Clinton administration.”

Now, considering someone from Wall Street to serve as Treasury Secretary is hardly shocking.  However, what is alarming is Fink’s views on Social Security including raising the retirement age and shifting Social Security funding to private accounts:

“Fink has also promoted the privatization of Social Security, while mocking the idea of retiring at 65, which is easy for a business executive who sits at a desk all day to say, rather than working on an assembly line or as a waiter. Fink owes his initial backing at BlackRock to Pete Peterson, the former commerce secretary who has been at the forefront of the campaign to cut or privatize Social Security. He sat on the steering committee of the Campaign to Fix the Debt, a stalking horse for Peterson’s ideas.

Fink’s claims that all Americans are living longer and thus should work longer is classic boilerplate language offered by the GOP and the billion dollar anti-Social Security lobby (funded by Pete Peterson) to justify cutting benefits for average Americans by raising the retirement age.  It ignores that fact that it’s wealthy white men who’ve benefited most from any longevity increases, while communities of color, women and low income workers do not see the same benefits.

“Men at the top of the economic ladder saw an eight-year increase in life expectancy, while men at the bottom saw virtually no change.” National Academy of Science 

For perspective, let’s remember that there will be a lot of political tea leaves to read between now and November. It has been welcome news to the National Committee to Preserve Social Security and Medicare that Hillary Clinton’s positions on Social Security have already seen some shifting during this campaign...in the correct direction.  She has restated her long-held opposition to privatization.  Raising the retirement age, cutting the COLA and benefit cuts are non-starters for her.  She recently gave her support for boosting benefits in a more limited way than Senator Bernie Sanders, with her focus on elderly women and caregivers.  Clinton also has softened her position on lifting the payroll tax cap while proposing raising revenue by taxing unearned income for Social Security. 

There’s a lot for retirees, people with disabilities, survivors and their families to like in both Democrats’ campaign approach to Social Security.  However, seniors expect more than just campaign promises.  Appointing a Treasury Secretary who believes Americans must work longer with some of their payroll taxes diverted into private accounts would deliver a very different message about what a Clinton administration could mean for Social Security. 

“While Clinton has adamantly pledged not to cut or privatize Social Security benefits, Fink’s track record would cause concern among advocates, were he to obtain a cabinet post. And having a ready-made team of trusted advisers who know their way around the Treasury building and the players in a potential Clinton West Wing can only help Fink in that campaign.”...David Dayen, The Intercept

Trump 2.0 on Social Security

“Does the name Ponzi all of a sudden come to mind?” – Donald Trump, 2000 

As voters in 12 Super Tuesday states head to the polls today we thought it would be a good time to look at arguably the biggest policy flip seen by any Presidential candidate, let alone a front-runner, on the issue of Social Security.  Simply put, the differences between Presidential candidate Donald Trump in 2000 and candidate Donald Trump in 2016 are h-u-u-u-g-e. 

Here are just a couple of the Social Security proposals the Donald supported last time he ran for President:

Raise the Retirement age to 70

“A firm limit at age seventy makes sense for people now under forty,” Trump writes. “We’re living longer. We’re working longer. New medicines are extending healthy human life. Besides, how many times will you really want to take that trailer to the Grand Canyon?” Donald Trump, The America We Deserve.

As we’ve discussed here many times, the problem with the “everyone is living longer” argument for raising the retirement is that it’s simply not true.

“Men at the top of the economic ladder saw an eight-year increase in life expectancy, while men at the bottom saw virtually no change.”... National Academy of Science

Privatize Social Security

“Privatization would be good for all of us. Directing Social Security funds into personal accounts invested in real assets would swell national savings, pumping hundreds of billions of dollars into jobs and the economy. These investments would boost national investment, productivity, wages, and future economic growth.” Donald Trump, The America We Deserve.

The American people, of all political parties and ages, don’t want their guaranteed Social Security benefits put on the Wall Street roller coaster.  They know that what’s good for Wall Street has proven disastrous for Main Street.

So, here were are with a second Presidential campaign and the promises are quite different.  First we have this MSNBC appearance in February:

SCARBOROUGH:  What about raising the retirement age? People are living older than they ever have  --

TRUMP:  Let me just say. Waste, fraud and abuse is massive in Social Security and Medicaid.

SCARBOROUGH:  Why wouldn't you raise the retirement age if Americans are getting older and living longer and longer.

TRUMP:  I'm not doing it. I don't want to do it. I don't want to do it. Two reasons. Number one I don't want to do it and number two, the Democrats aren't going to do it. You know the Republicans also have to get elected, you do know that. And if you watch Bernie, and if you watch Hillary, they don't only want to not cut, they want to increase Social Security.

SCARBOROUGH:  All right.

TRUMP:  Now. I'm not doing it for that reason. I'm just saying this. We don't have to do it. We're going to make our economy strong, we're going to make our economy rich, and we're not going to have to  --

While no one has been able to pin Trump down to his actual plan for Social Security, his message in the South Carolina debate shifted to the perennial GOP promise to cut waste, fraud and abuse and grow the economy:

TRUMP: First of all, the -- when you say I'm the only candidate, if you listen to the Democrats, they want to do many things to Social Security and I want to do them on its own merit. You listen to them, what they want to do to Social Security, none of these folks are getting elected, OK, whether they can do it or not. I'm going to save Social Security. I'm going to bring jobs back from China. I'm going to bring jobs back from Mexico and from Japan, where they're all -- every country throughout the world -- now Vietnam, that's the new one.

TRUMP: You have tremendous waste, fraud and abuse. That we're taking care of. That we're taking care of. It's tremendous.

However, even those who’ve built careers urging Social Security cuts or privatization know this “waste, fraud and abuse” claim doesn’t hold water:

“Now, it is true, according to Social Security’s inspector general, that there are as many as 6.5 million Social Security numbers linked to people over the age of 112. Virtually none of those people are receiving benefits. Their accounts simply were never officially closed following their deaths.” ...Michael Tanner, CATO Institute

Here are the real numbers for the Trump’s mythically huge “waste, fraud and abuse” claims:

  • Since 1989, SSA’s annual administrative costs have been about 1%
  • Fraud in SSI is less than 1% with underpayments more likely than overpayments.
  • There are Social Security numbers linked to people that should have been closed; however, it has not led to significant overpayments 

A speech Trump gave to conservatives at the 2013 Conservative Political Action Conference provides one suggestion as to why the massive change of position:  

"As Republicans, if you think you are going to change very substantially for the worse Medicare, Medicaid and Social Security in any substantial way, and at the same time you think you are going to win elections, it just really is not going to happen," Mr. Trump said, adding that polls show that tea partyers are among those who don't want their entitlements changed."  Donald Trump, 2013 CPAC speech, Washington Times

As the polls close tonight on Super Tuesday, we’ll likely see the GOP field narrow.  This certainly wouldn’t be the first time a candidate promised a politically popular proposal on the campaign trail and then acted very differently in office.  However, America’s seniors and their families must expect more from these candidates than big promises, no details and being wrong on the facts.  


Medicare End of Life Counseling – Do You Have a Plan? Many African Americans Do Not

For many years, patients, families and health care advocates have urged that doctors in Medicare be reimbursed for end of life counseling.  Unfortunately in 2008, the GOP’s Vice Presidential candidate, Sarah Palin, derailed any hope of a reasonable debate by claiming such conversations would lead to “death panels.”  Thankfully, time and truth have put an end to the political posturing and Medicare will now reimburse doctors for conversations with patients about whether and how they would want to be kept alive if they became too sick to speak for themselves.

According to Kaiser Family Foundation polling, public support for the move is huge; however, many Americans haven’t had end of life counseling with their doctor.

“Even though 89 percent of respondents said doctors should have this conversation with patients -- and just 9 percent said they shouldn't -- only 17 percent of people reported having done so. And 4 in 10 of those who haven't yet had the discussion said they didn't want to. That's despite the survey also showing that 84 percent of people would be comfortable talking to their doctors about the topic.”

Additionally, Kaiser found that communities of color are even less likely to have dealt with end of life issues:

“Studies have found that about 4 in 10 Americans ages 65 and older do not have advanced directives or have not written down their own wishes for end-of-life medical treatment. Additionally, demographic differences appear to play a role in the likelihood of having advanced directives. Specifically, African Americans and Hispanics have advance directives at lower rates compared to whites, as do people with lower incomes and lower levels of completed education. Researchers have identified several factors that contribute to these differences, including cultural and religious differences, communication challenges between patients and medical staff, distrust of medical care systems, and awareness of advance directive options.”

Research on how to reverse the trend of less end of life engagement in the African American and Hispanic community is limited.  However, as of January 1 this year, Medicare will cover advance care planning as a separate service provided by physicians and other health professionals.  Advocates hope the new provisions will open the door to increased usage of the new benefit across the nation. 




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