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New Medicare Advantage Rates Preserve Insurance Industry Subsidies...Again

For the second year in a row, America’s massive health insurance industry lobby launched a Washington lobbying and advertising blitz hoping to scare seniors into believing they’ll lose their Medicare and politicians will lose their seats if the industry’s government overpayments aren’t protected.  Mission accomplished. Rather than trimming rates, the Obama administration raised them:

“Private Medicare plans would see a 0.4 percent boost in their payment rates for 2015 under a final rate announcement made by Centers for Medicare and Medicaid Services officials Monday.

Officials with Medicare said the better-than-expected news for insurers came about in part as a result of healthier enrollees signed up for both Medicare Advantage and traditional fee-for-service plans, which means less of a cost burden on the health insurance system for the aged.” Congressional Quarterly

When CMS says “in part” what they aren’t mentioning is the part where the administration basically caved (for the second year in a row) to the insurance industry’s million dollar lobbying blitz to keep its billions of dollars of federal overpayments intact.   

“Today’s announcement by CMS to, once again, preserve government overpayments to private insurers in Medicare Advantage is bad policy and bad economics for the Medicare program. These subsidies were supposed to be gradually trimmed in order to expand benefits and improve the quality of care for all seniors in Medicare. However, each year the insurance lobby threatens to cancel coverage or charge more to seniors in MA plans rather than accept a reduction in their overpayments or reimbursement rates. 

For many years, private insurance companies have claimed they can provide better coverage to seniors at a lower cost.  The reality proves otherwise.  Since 2003, all seniors in Medicare (including those not even enrolled in Medicare Advantage) have paid higher premiums to help fund the billions in government overpayments to private Medicare Advantage insurance companies.  Over the years, as much as 14% more per beneficiary has been paid to MA plans than is paid to cover individuals enrolled in traditional Medicare.  It’s a wasteful federal boondoggle that was rightfully corrected by passage of the Affordable Care Act (ACA) in 2010.  Additionally, thanks to the ACA, growth in health care costs have been decreasing which means that reimbursement rates also go down.   As reimbursement rates have decreased, MA plan enrollment has increased. 

Let’s be clear, contrary to the health insurance industry’s massive lobbying campaign claims, Medicare doesn’t make the decision about cuts to seniors’ MA coverage, including increasing premiums or reducing access to doctors. That decision rests squarely in the board rooms of the nation’s private insurance industry, which is unwilling to give up a penny of their government giveaway in favor of continued threats of diminished coverage and higher premiums for seniors.

This annual drama with private insurers in Medicare proves, once again, that when private MA plans are unwilling to compete on a level playing field with traditional Medicare, seniors will ultimately pay the price. So much for providing better coverage for less.”...Max Richtman, NCPSSM President/CEO 

Boosting Social Security Benefits

By Max Richtman, NCPSSM President/CEO

Momentum continues to build inside and outside the halls of Congress to reverse course on the single-minded quest to cut Social Security benefits which has dominated our political discourse for years.  Not surprisingly, commentators who bought into the billion dollar Wall Street campaign to convince America we can’t afford a strong Social Security system are distressed at this turn of events.  Apocalyptic screeds with headlines like “Increasing Social Security Benefits Would Wreck Retirement Security” portray efforts to boost these earned benefits as partisan pandering. They conveniently ignore the fact that legislation increasing benefits would also extend Social Security’s long-term solvency by decades. The American people have never bought into the false choice that the only way to “save Social Security” is to slash benefits. Congress now has the opportunity to plot a course that addresses our looming retirement crisis while also strengthening Social Security’s long-term finances. 

There’s no doubt that, for years now, the steady drumbeat for cutting Social Security benefits has been so deafening as to drown out any discussion about what those cuts would actually mean for millions of Americans.  According to the 2014 Retirement Confidence Survey by the Employee Benefit Research Institute, a sizable percentage of workers report they have virtually no savings and investments. More than a third (36 percent) of retired civilian workers say they have less than $1,000 (up from 28 percent in 2013). A quarter of workers and 17 percent of retirees indicate that their current level of debt is higher than it was five years ago.  Social Security remains the only stable source of income for many families who are still rebuilding after our nation’s recent brush with economic collapse.  Yet rather than address this retirement crisis head-on, we have wasted years of political energy focused on cutting benefits to pay down the deficit rather than strengthening the Social Security program -- until now.

Legislation sponsored by Sen. Tom Harkin (D-IA) and Rep. Linda Sanchez (D-CA) would change the benefit calculation formula the Social Security Administration uses, so that benefits would gradually increase by approximately $70 per month. The Strengthening Social Security Act would also change the way the Social Security Administration calculates the Cost of Living Adjustment (COLA), ensuring that benefits more accurately reflect the increasing costs facing seniors today. Finally, this legislation would phase out the current payroll tax cap so that all Americans contribute to Social Security taxes fairly.  In 2014, workers who earn less than $117,000 contribute 6.2 percent of their wages in Social Security payroll taxes. Workers who earned above $117,000 pay no Social Security payroll taxes above that level, meaning the effective tax rate for Social Security actually decreases for America’s higher income workers. In fact, workers who earn over a $1 million per year only pay Social Security tax on one-tenth or less of their earnings which creates a gaping loophole for millionaires. The “Strengthen Social Security Act of 2013” gets rid of this loophole, boosts benefits, and would extend the solvency of Social Security by almost two additional decades, until 2049. 

The latest survey by the National Academy of Social Insurance shows large majorities of Americans, both Republicans and Democrats, agree on ways to strengthen Social Security, without cutting benefits. Of those polled, 74 percent of Republicans and 88 percent of Democrats agree that “it is critical to preserve Social Security even if it means increasing Social Security taxes paid by working Americans.”  Simply put, the American people are willing to pay more for Social Security.  They understand the growing impact these benefits have on individual lives and on our larger economy.

Families spend $816 billion in Social Security benefits nationwide each year.  When 57 million Americans use the purchasing power of those modest benefits, they are supporting local businesses and jobs, communities and state economies with billions of dollars they simply wouldn’t have without Social Security.  Boosting Social Security now makes sense not only for millions of Americans and their families but also for our economic recovery.  The waning anti-Social Security lobby will try to stop our progress, but the American people understand that boosting benefits is the right thing to do and now is the right time to do it, for millions of middle-class families and our nation’s economic recovery.  

How About Giving the Truth about Social Security "Equal Time"

Attempts to reignite the intergenerational warfare campaign against Social Security --  led by the billion dollar austerity lobby -- seem to have hit a new high.  Alternet highlights just a few of the recent instances:

A string of recent examples—rants [3] from MSNBC’s wealthy young commentator, a notorious elderly-attacking [4] House candidate, think tanks promoted [5] on NPR—generational warfare cheerleaders are proclaiming that America is heading toward an epic and immoral conflict as better-off seniors are robbing millennials of shrinking federal dollars because retirement programs cost too much. That’s simply false, as Social Security is solvent [6] through 2033, and spending on all mandatory programs as a percentage of GDP is close to [7] where it’s been since 1975, at 21 percent. 

This line of attack isn’t in a political vacuum. It comes as some Democrats are reframing [8] the debate on Social Security and campaigning [9] for increased benefits. Nor is it a new argument, as a right-wing club of libertarians, Wall Street bankers and deficit hawks have tried for decades to undermine and privatize the program.

For MSNBC’s, Abby Hunstman, this is the second time in as many weeks that she’s taken to the airwaves with a monologue chock-full of errors and political rhetoric heavy of drama and light on the facts.  NCPSSM’s Equal Time, joined the Los Angeles Times and others in pointing out just a few of those errors in her first attempt to “educate” millennials:

Millennials Face Big Problems – Abby Hunstman, MSNBC

 “Here’s the reality, at the rate we’re spending, the system (Social Security) will be bankrupt by the time you and I are actually eligible to get these benefits.”

“We can’t afford it.”

“While we’re living two decades longer we haven’t made any changes.”

MSNBC anchor Abby Huntsman (daughter of GOP Presidential Candidate Jon Huntsman) clearly misunderstands Social Security’s funding  and twists both life expectancy data and worker ratios to the breaking point to build a false case for cutting Social Security benefits for millennials.   Contrary to Huntsman’s claims, there is not a single scenario or economic projection in which Social Security goes bankrupt, most  Americans aren’t living 20 years longer and there have been numerous reforms to Social Security in the past,  including raising the retirement age.

If Washington does nothing at all by the time the Trust Fund is depleted in 2033, millennials and generations after them will receive a 25% benefit cut.  Huntsman urges raising the retirement age to 70-75 on top of that which means an even larger benefit cut for our children and grandchildren.  Unfortunately, rather than educating her fellow millennials with the facts,  her “fix” for Social Security comes straight from the multi-billion dollar anti-entitlement lobby’s talking points.   There are ways to fill the funding gap without hitting future generations with huge benefit cuts. Rather than gutting Social Security under the guise of “fixing it”, Congress should lift the payroll tax cap and enact other meaningful reforms to strengthen the program for future generations. 

Inexplicably, rather than address her mistakes Huntsman then chose to double-down on them with a second error-laden missive.  Michael Hiltzik with the Los Angeles Times tried, a second time, to help her with the “basic math” she claims to understand:

Huntsman complained that I called her out for asking how we're going to pay the rising costs of the health and social insurance programs, as though "even raising the question means you're automatically anti-Social Security or against the elderly."

No. I called her out for raising the question using bogus numbers, such as life-expectancy rates from birth, which have risen sharply since the '30s but aren't relevant to Social Security's fiscal health. Instead, the key figure is life expectancy from age 65, which hasn't risen very sharply. (Huntsman appears to accept this point.)

Huntsman offered several possible remedies for rising costs in these programs -- means-testing benefits, increasing the retirement age, raising the Medicare eligibility age to 67 from 65 -- and complained that we're not even debating these options.

That's where she really goes off the rails. We have been debating those options, for years. They've all been studied, measured, calculated and scored. The reason they haven't been implemented is that none of them is simple. None of those she listed would have an appreciable positive effect on the fiscal health of the programs, and some, such as raising the Medicare eligibility age, might make the overall federal budget picture worse.

Economist Dean Baker also gave it a try:

“The far greater risk to the living standards to the people of Huntsman's generation is the risk that we will continue to see the upward redistribution of income over the next three decades that we have seen over the last three decades. As a result of this upward redistribution of income, people like Ms. Huntsman's father have benefited enormously, while most workers have seen little or none of the gains from economic growth. If this pattern continues then most people in Ms. Huntsman's cohort will not fare well financially even if we eliminated their Social Security taxes altogether.”

So Huntsman continues to take her cues directly from the billion dollar Wall Street campaign to paint Social Security & Medicare as the biggest threat to future generations while ignoring the income inequality which will curse millennials for a lifetime.  


Boost Social Security NOW

Three decades of stagnant middle-class incomes, disappearing pensions, limited ability to start and maintain personal savings, and the failure of the 401K experiment lay the foundation for a retirement crisis that could further threaten millions of older Americans and their families.

It’s time to Boost Social Security Now to preserve a secure retirement.

Find out more about our Boost Social Security Now campaign. 

“Know Your Rights” Informs LGBT Community of Their Social Security Eligibility

For the first time in its long history, the Social Security Administration is providing benefits to same sex married couples, thanks to the Supreme Court’s June 2013 Windsor ruling in the Defense of Marriage Act.  This is a significant development with important financial implications for millions of elder lesbian, gay, bisexual, and transgender Americans, same sex spouses, widows, and children of LGBT parents.

Launched in Fall 2013 in the San Francisco Bay area, “Know Your Rights” is a national education campaign for LGBT Americans impacted by the Windsor decision. The Foundation of the National Committee to Preserve Social Security and Medicare events are funded in part by the Archstone Foundation to help support a series of “Know Your Rights” town halls in Los Angeles March 18-20. The town halls will include panel discussions with the Social Security Administration, legal experts, and seniors’ and LGBT advocates.  Community partners include the LA Gay and Lesbian Center, the Latino Equity Alliance, The Center-Long Beach and API Equality-LA with co-sponsorship by the Los Angeles City and County Departments of Aging.

EVENT DETAILS

Tuesday, March 18th 

5:30 pm Reception

6:30 pm Program

LA Gay & Lesbian Center

1125 N. McCadden Place

Los Angeles, CA 90038

Register Here

Wednesday, March 19th

6:00 pm Reception

6:30 pm Program

Bixby Park Community Center

Long Beach, CA  90802

RSVP to Porter Gilberg

(562) 434-4455 ext. 245


Thursday, March 20th

6:00 pm Reception

7:00 pm Program

Boyle Heights New City Hall

2130 East 1st Street

Los Angeles, CA  90033

Register Here

The March 18th session, moderated by LA Gay and Lesbian Center CEO, Lorri Jean, will feature panel discussions with the Social Security Administration, legal experts, and seniors’ and LGBT advocates and will be available via webcast for those who can not attend in person. 

March 18th 6:30 – 8:00 pm PT

Register online for the “Know Your Rights” Webcast here.




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