Sorting Fact from Fiction in the 2013 Trustees Report on Social Security and Medicare

Posted @ 5/31/2013 1:26 PM By NCPSSM

The 2013 Trustees report shows, once again,  Social Security is not facing a crisis.  

• Trustees project Social Security will be able to pay full benefits until the year 2033.  After that, Social Security will have sufficient revenue to pay 77% of benefits.

• Social Security is still well funded.  In 2013, as the economy regains its footing, 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 Cost of Living Adjustment increase of 1.5% to 2.5% in 2014.

With so little bad news to report in this 2013 Trustees report, critics have now shifted their attention to Social Security Disability, which faces a more immediate fiscal challenge

• Trustees project the Disability Trust fund will be depleted in 2016, the same year projected in last year’s report. This projected shortfall is not a surprise and Congress should reallocate income across the Social Security Trust funds, as it has done 11 times before, to cover the anticipated shortfall.  Disability expenditures have increased primarily due to demographic trends.  The increase in full retirement age from 65 to 66 has also contributed to the increase in disability expenditures, as people remain on the disability rolls longer before shifting to retirement.  However, when Congress took action in 1994 to address a then-reported shortfall in DI, it knew that it would have to take action again in 2015 or 2016.

The 2013 Trustees report shows slowing the growth of health care costs has improved Medicare’s Trust Fund.

• Medicare solvency remains greatly improved thanks to passage of healthcare reform, with the program paying full benefits until 2026, two years later than the 2012 report.   Health care spending has also grown much more slowly. Since late 2010, CBO has reduced its projection of cumulative Medicare and Medicaid spending over the 2011-2020 period by $900 billion - or nearly 10 percent.

• Medicare Part B premiums are not projected to increase in 2014.

Here's reaction from NCPSSM's President/CEO, Max Richtman:

“As we emerge from the worst economic downturn since the Great Depression, it’s clear our nation’s retirement security programs, Social Security and Medicare, continue to do their jobs admirably by protecting millions of Americans during these troubled times. Unfortunately, for too many in Washington, this annual Trustees report is little more than an opportunity to re-issue the same doom-and-gloom news releases and renewed calls to cut these programs in order to ‘save’ them, regardless of the fiscal facts.  The truth is the Trustees 2013 report shows Social Security has a $2.7 trillion surplus which continues to grow.  Social Security isn’t bankrupt; it hasn’t contributed a dime to our fiscal woes and, in fact, has performed its mission without fail.

On the Medicare front, the good news is health care reform has extended the solvency of the Medicare Trust Fund and health care cost growth is slowing. The Affordable Care Act is making a difference not just in Medicare, but is also slowing the rising cost of health care for all Americans.” 

 

Pitting Young Vs. Old – Enough is Enough

Posted @ 5/30/2013 10:09 AM By NCPSSM

                                                                Max Richtman                                    Michael Petit
                                                        NCPSSM, President/CEO            Every Child Matters, President

Federal budgets are far more than just numbers on a page.  They represent national priorities for our fiscal future.  However, some in Washington hope to deflect our attention away from the real fiscal challenges facing our nation – unemployment, growing income inequity and a slow economy – in favor of an intergenerational warfare campaign pitting America’s young against old.  This billion dollar austerity campaign is backed by Wall Street lobbyists who hope to convince younger generations that the only way for them to succeed is to cut the very programs their families depend on now, and which they’ll also need as they raise their own families later in life. The ultimate goal of this intergenerational warfare strategy is to divert attention away from a trillion dollars in wasteful tax breaks benefiting the wealthiest in our nation in favor of benefit cuts for middle class and poor Americans, of all ages.  However, the truth is, grandma isn’t an economic threat to her children and grandchildren – the real threat is our skewed national priorities.

As lifetime advocates for children and seniors, we will join Rep. Diana DeGette at a town hall meeting in Denver on May 30^th to make the case for fiscal policies which put America’s priorities back where they belong – on the side of our nation’s middle-class families.  For too long, many in Washington have claimed that "shared sacrifice" means that if a millionaire loses a tax break then the middle-class and poor must also lose their modest benefits in Medicare, Social Security, Head Start, WIC and school lunches.  This false equivalency pretends that a tax dollar lost to a millionaire or huge corporation is the same as a benefit dollar lost to a retiree living on $14,000 a year from Social Security, or a poor family which depends on food programs to feed their children.  Americans know that’s not a fair and balanced fiscal approach, it’s not sensible reform and it’s not the path to economic recovery.

In 1900 the U.S. infant mortality rate was 165 deaths per 1,000 live births. Today it is six. In 1960 the elderly had the highest poverty rate and had no access to affordable health care. Today their poverty rate is the lowest and persons 65 and older are covered by Medicare.  How are these tremendous advancements in human health and dignity related? They are the direct result of the American people telling their elected federal officials — presidents and Congresses both — to stop the preventable deaths of babies, and avoidable poverty and medical despair of the elderly. And it worked, the direct result of voter and taxpayer support for smart investments in the common welfare.

These and scores of other social advances over the last century contributed to most Americans enjoying what is perhaps the highest standard of living in the world. In combination with the benefits of a moderately regulated market economy, America’s national investments in its citizens — in itself — produced the planet’s strongest military and economic power. Now there are some in power who would junk this formula.

The latest version of trickle-down economics was soundly rejected by voters just last fall; however, the House GOP budget passed in a party line vote and recycles this failed fiscal plan by sharply cutting social spending and targeting programs which improve the lives of virtually every American family. If this budget vision prevails, big insurance companies could once again deny help to millions with pre-existing conditions. Tens of thousands of eager young learners could be denied Head Start. Seniors would face higher out-of-pocket costs while having to navigate the complex private marketplace with their Medicare vouchers. This radical, ideologically driven budget is a departure from decades of pragmatic, successful bipartisan policies aimed at lifting all Americans. Breaking our national promise to families, who have worked and contributed to help build this nation and the programs which have served us well for generations, to keep tax loopholes and subsidies for wealthy individuals and corporations does not reflect the priorities of the majority of Americans, young or old.

There is a way to return fairness and equity to our budget priorities. A balanced approach would target cuts to low-priority programs plus add new revenues, starting with the elimination of unnecessary tax breaks for the wealthy and huge corporations. We should preserve and strengthen proven safety-net programs in the face of a rapidly aging population and make critical investments in children and youth in order to remain competitive in a global economy. Throughout our history, America has never had to impoverish one generation in order to support another. As advocates for seniors and children we know that it doesn’t have to happen today either.

The future of our families and our nation depend on economic security at the beginning, middle and end of life. The fates and lives of the old and young are intertwined. Grandparents love their grandkids and grandkids their grandparents. Both want and need the other to succeed.  Making that happen for millions of average American families is simply a matter of priorities.

Michael Petit is the president of Every Child Matters, a national child advocacy organization. Max Richtman is president and CEO of the National Committee to Preserve Social Security and Medicare.

More Proof that “Deficit Reduction” is Really Just Code for Social Security & Medicare Cuts

Posted @ 5/15/2013 12:05 PM By NCPSSM

The Congressional Budget Office’s new budget projections show that despite the sky-is-falling crisis calls made by Wall Street backed austerity fanatics like: Fix The Debt, Bowles-Simpson and the rest of the Pete Peterson funded anti-Social Security brigade, our deficit is now the smallest it's been since 2008.  And that’s without the so-called “Grand Bargain” this billion dollar lobby claims is absolutely necessary for our nation’s survival. The Daily Intelligencer explains:

It's hard not to see the CBO's projections as the latest in a long series of demoralizing developments for the Simpson-Bowles-led deficit scold movement. Overall, the CBO says that barring unforeseen policy changes, the deficit will shrink to 2.1 percent of GDP in 2015. That's better than the 2.3 percent target Simpson and Bowles originally set out in their 2010 report. And it will happen even without the grand bargain they've so desperately sought.

Neither is the federal debt piling up to unsustainable levels. As the CBO's chart shows, the debt-to-GDP ratio is now projected to peak in 2014 at 76.2 percent, before falling to 70.8 percent in 2018. That's a long way from the now-discredited 90 percent threshold budget scolds have used to scare policymakers, and the projections —combined with record-low interest rates and eerily calm bond markets — should put our concerns about an immediate debt crisis to rest.

Now, it’s really hard to keep a crisis mentality ginned up if the facts keep getting in the way (see also the Reinhart Rogoff debacle). So, as expected, the Wall Streeters have chosen just to ignore what doesn’t fit their frame:   

The Campaign to Fix the Debt, which marshals corporate resources to lobby for deficit reduction, said that "the rosier-than-expected near-term projections do not change the fact that rising health care costs, an aging population, Social Security’s looming insolvency, and ever-increasing interest payments will greatly expand the national debt as a share of the economy starting at the end of the current decade."  The Hill Newspaper

Again, the true challenge facing this nation is health care costs.  Reforms through the Affordable Care Act have helped reduce the deficit and  system-wide reforms need to continue, not just in Medicare. Talking about Social Security and Medicare, as if they’re the same program, is a favored ploy of these Wall Streeters; however, it conveniently ignores the fact that there is $2.7 trillion currently in the Social Security trust fund and that figure keeps growing. Economist Jared Bernstein offers some too-little-heard fact-based analysis:

Longer term, even with the recent improvement in the pace of health care costs, we still face pressure from the intersection of our aging demographics and health care spending.  To bend those curves at the end of the figure, we’ll need to keep up the pressure on health costs as well as boost our revenues.  Cuts alone won’t do it.

It would be nice if policy makers looked at the figure below and recognized that we need less austerity now and more health savings/revs later.  But that would mean spraying water on their flaming heads, and that can be kind of uncomfortable.

When is a Medicare Cut Not a Cut? When You’re One of the Nation’s Biggest Lobbyists – Health Insurance Companies

Posted @ 4/4/2013 2:49 PM By NCPSSM

The news back in February that private insurers in Medicare would receive a 2.2% rate cut in 2014 sent their lobbyists into overdrive, flooding the halls of Congress and the media with ads bemoaning the reduction in their billions of dollars of federal overpayments.  Historically, private insurers providing Medicare Advantage coverage have collected 13% more from the federal government to provide private MA coverage than it costs to cover seniors in traditional Medicare.  Over the years this massive government subsidy to private for-profit insurers has cost Medicare millions of dollars, so the Obama administration correctly trimmed back those wasteful overpayments as part of the Affordable Care Act, helping to add 8 years of solvency to the program. 

Incredibly the news this week is that the Obama administration has now caved to the insurance industry’s lobbying blitz and Congressional pressure and will not only reverse the 2014 Medicare Advantage cuts but will also give for-profit insurers a 3% raise.  No surprisingly, this is a move that CMS actuaries (the non-politicians actually paid to do this job) opposed:

“The actuaries in charge of the calculation made clear that they did not endorse the change. The official notice, signed by Jonathan Blum, director of Medicare at CMS, and Paul Spitalnic, the chief actuary in charge of the formula, said that the change had come at the behest of HHS Secretary Kathleen Sebelius.”  National Journal

“It’s about the best possible result for Medicare Advantage plans,” said Ipsita Smolinski, managing director at Capitol Street, a health care consulting firm.” Politico

Sure, it’s good news for the nation’s $884 billion dollar a year health insurance industry but what about Medicare? Not so much.  While Medicare Advantage over-payments will still face future reductions thanks to health care reform, this is the classic case of political “If You Give a Mouse a Cookie.”  Will those common sense reductions survive another AHIP lobbying onslaught? It’s also important to note that many of the same members of Congress who have decried Medicare spending and support more means testing, benefits cuts and more for seniors -- all in the name of deficit reduction --  lobbied the hardest to ensure the health insurance industry keeps their government subsidies.  These are subsidies that all seniors, whether they are in a Medicare Advantage plan or not, pay for with higher premiums while also burdening the Medicare program overall. 

For comparison, let’s juxtaposition Congress’ rapid response this week to the insurance lobby’s pressure to keep their goodies with the inaction we’ve seen over months leading to across the board budget cuts in the ongoing sequester.  Budget cuts that are impacting average Americans, not huge for-profit industries.

The Washington Post reports today that the sequester has lead to thousands of Medicare cancer patients being turned away from cancer clinics who can’t afford the 2% sequester cut for drugs needed to treat their Medicare patients.

Cancer clinics across the country have begun turning away thousands of Medicare patients, blaming the sequester budget cuts. Oncologists say the reduced funding, which took effect for Medicare on April 1, makes it impossible to administer expensive chemotherapy drugs while staying afloat financially.

Patients at these clinics would need to seek treatment elsewhere, such as at hospitals that might not have the capacity to accommodate them. “If we treated the patients receiving the most expensive drugs, we’d be out of business in six months to a year,” said Jeff Vacirca, chief executive of North Shore Hematology Oncology Associates in New York. “The drugs we’re going to lose money on we’re not going to administer right now. After an emergency meeting Tuesday, Vacirca’s clinics decided that they would no longer see one-third of their 16,000 Medicare patients. “A lot of us are in disbelief that this is happening,” he said. “It’s a choice between seeing these patients and staying in business.”

Cancer providers have also been lobbying Congress asking for a sequester waiver for cancer drugs so that they can continue providing their life-saving care.  Washington certainly rallied quickly to reinstate massively wasteful government subsidies to one of our nation’s largest industries...yet so far, no response to those who literally control the life and death of thousands of cancer patients in Medicare.

The National Committee: Our Story

Posted @ 3/15/2013 1:37 PM By NCPSSM

As the battle to cut Social Security, Medicare and Medicaid benefits wages on we thought we’d go into the weekend on a happier note rather than providing the usual Capital Hill war stories and political intrigues.   Here is a quick video we produced to give our community a look at the work the National Committee does here in Washington, D.C. each and every day.  We’ve been fighting to strengthen the nation's most successful retirement and health care programs for 30 years now. 

Our mission has always been to educate, advocate and mobilize. These days, that’s been quite a challenge.  However, thanks to our millions of members and supporters we have been successful in fighting efforts to destroy or privatize these programs. 

So, this is our story...and yours.