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Budget Squabbling and Its Potential Impact on Social Security & Medicare

The Office of Management and Budget is monitoring congressional actions and preparing to instruct agencies when they should begin implementing shutdown plans as funding our nation’s programs languishes amid the GOP-led Congress’ squabbling over defunding Planned Parenthood. One week prior to a potential lapse in appropriations, the OMB is expected to hold a meeting with senior agency officials to begin planning for the shutdown.

With the clock ticking, Congress is scrambling to not only avoid a government shutdown and default but also pass an extension for transportation funding and tax breaks. Will the sequester continue or can Congress find a better way to manage our nation’s finances?  This political gamesmanship and inability to get anything done impacts far more than one federal program.  Seniors programs like Social Security and Medicare are also in the cross-hairs.

“America’s seniors have become especially weary of these Congressional dramas as they have learned, the hard way, that Social Security and Medicare have become the favored target for budget cuts or “pay-fors” for a host of Congressional programs that have nothing to do with providing the earned benefits seniors depend on.  From highways to trade and beyond, Congress continues to try and use seniors’ programs as a national ATM. The next few weeks promises more of the same”... Max Richtman, NCPSSM President/CEO

The National Committee to Preserve Social Security and Medicare has prepared a detailed Fall Legislative Update mapping the current legislative minefield for programs which touch the lives of virtually every American family.

We’ve identified the numerous legislative hurdles still ahead, the possible threats to Social Security, Medicare and Medicaid and our positions on each potential pay-for or budget cut.  You can see NCPSSM’s Fall Legislative Update here. 

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The GOP Debate...Slim Pickin’s If You Care About Social Security or Medicare or Virtually Any Other Issue Impacting Average Families

Now that America’s Presidential Debates are designed as entertainment television (as described here by CNN Moderator Jake Tapper) and not an actual debate of the issues voters need to hear about before choosing our next’s probably no surprise that Social Security & Medicare just aren’t considered sexy enough for any serious attention. 

In response to the only question asked last night about the nation’s most successful government programs, Donald Trump told the audience he’ll give up his benefits because he doesn’t need them (Ben Carson made the same suggestion earlier in the week).  So, you have to wonder -- is asking rich people to voluntarily give up their Social Security and Medicare now considered a serious GOP policy plan? Maybe every American millionaire will be asked to email 10 of their country club friends to pledge to give up their benefits, too?  No one is forced to apply for their Social Security now, so how is this even vaguely a solution? 

Meanwhile, since Governor Chris Christie staked his campaign on the idea of being tough on “entitlements” he continued to push his plan to slash benefits by ignoring actuarial reports from every legitimate government entity including the Congressional Budget Office and the Social Security actuary. Christie claimed last night that Social Security will be insolvent in just “7 to 8 years.”

The truth is the Social Security Trust fund will be depleted in two decades and only pay 79% at that point, if Congress does absolutely nothing.  But that’s not the same as Social Security is “broke” and Social Security is “insolvent.”  At the bare minimum, a President of the United States needs to understand the difference. 

Finally, while this didn’t happen in last night’s debate, Carly Fiorina recently offered a truly unique approach to her plans for Social Security and Medicare as’s a secret until I’m in the White House. 

"I am not prepared to go to the American people and talk to them about how we're going to reform Social Security and Medicare,’ Fiorina told CNBC's John Harwood in an interview published Wednesday, ‘until I can demonstrate to them that the government can execute with excellence, perform its responsibilities with excellence, serve the people who pay for it with excellence.’

Harwood was impressed. ‘That is a dodge worthy of a very good politician,’ he told the former Hewlett-Packard CEO. 

Fiorina denied that she had just dodged. ‘I am deadly serious,’ she said.” 

No doubt she’s deadly serious about not addressing the issue now or talking about her already expressed plans to cut Social Security offered during the California Senate campaign in 2010:

"I'm prepared to look at any and all ideas without stating at this point which I would favor and which I would not. We have to have a comprehensive look at entitlement reform, including Social Security reform."  Carly Fiorina, 2010

“... I believe that to deal with entitlement reform, which we must deal with, we ought to put every possible solution up on the table...”  Carly Fiorina, Fox News 2010

So basically, once President Fiorina is confident she’s an excellent President then she’ll tell you about her plans to cut Social Security and Medicare benefits. 

But only then...

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The GOP Debate Watchers Guide on Social Security & Medicare

Busting Tonight’s Top 5 GOP Myths – In Advance

You don’t have to be much of a political sooth-sayer to predict that, given the GOP rush to attack what the party calls “entitlements” (and what everyone else knows are actually earned benefits), tonight’s debate will likely touch on the GOP Presidential candidates’ plans for Social Security and Medicare. 

Unfortunately, since this debate is being moderated by Fox News that discussion will start from the flawed premise that these programs are “bankrupt,” destroying America’s economy and simply too expensive.  It’s likely to go downhill from there as the GOP Presidential contenders have already tried to prove their conservative bona-fides by out tough-talking each other in a rush to cut benefits more than the guys standing next to them.  (So far, Mike Huckabee has been the exception to that rule so it will be interesting to see what tonight brings from him.)

As you watch tonight, remember these basic truths:   

1.  Social Security and Medicare Are NOT Bankrupt and not in Crisis

Medicare solvency remains greatly improved since passage of health care reform with the Hospital Trust Fund paying full benefits until 2030 which is the same as was projected last year. In 2030, payroll taxes alone are estimated to be sufficient to cover 86 percent of HI costs. Solvency has improved by 13 years from the date that was projected before enactment of the Affordable Care Act. In fact, Medicare's actuarial shortfall actually decreased from last year. 

Social Security remains well-funded. With the economy in recovery, Social Security's total income will exceed its expenses by over $9.2 billion and annual income will exceed obligations through 2019. There is nearly $2.79 trillion in the Social Security Trust Fund, which is $25 billion more than last year and it will continue to grow by payroll contributions, income taxes paid on benefits, and interest on the Trust Fund's assets.

Even if Congress does nothing, and no one believes that will happen, Social Security and Medicare are still not “bankrupt.” The programs will pay reduced benefits once their Trust Fund reserves are depleted.  However, a 14% Medicare benefit cut in 2030 and a 21% Social Security cut in 2034 are not options. That’s why we urge Congress to set aside the crisis rhetoric and focus its attention on benefit adequacy and long-term solvency as proposed in the Social Security 2100 Act

2.  Disability “Crisis” Can be Easily Avoided

Congress has known since 1994 that the Disability Trust Fund would be depleted in 2016, meaning only 81 percent of scheduled benefits will be payable after that point. Rather than make a routine administrative reallocation of income across the Social Security Trust Funds, as Congress has done 11 times before (including 4 times during the Reagan administration), the GOP House has blocked that move.  Conservatives say they will wait until the 11th hour to force broader changes in the Social Security program, rather than simply fix the issue easily today. So if you hear any hand-wringing tonight about the disability “crisis” from Presidential candidates tonight, understand this is a “crisis” of the GOP Congressional leadership’s making.  Also, a subset of this discussion is the myth that the disability program’s solvency issues are due to lazy Americans who are scamming the system.  The truth is disability expenditures have increased primarily due to anticipated demographic trends - as the large number of baby boomers age into the disability-prone years (they turned ages 50 to 68 in 2014), more people become disabled and thus receive benefits.  The increase in full retirement age from 65 to 66 (and to 67 for those born after 1959) has also contributed to the increase in disability expenditures, as people remain on the disability rolls longer before shifting to retirement. Also, it’s not easy to get disability.  80% of initial disability claims are denied.

3. No One Suggests “Doing Nothing”

Claims that supporters of Social Security & Medicare want to “do nothing” is an absurd straw-man argument designed to hide the real truth that conservatives have long supported a cuts-only approach to addressing long-term solvency with little regard to what those cuts actually mean to American families.  From President Bush’s failed privatization campaign to the GOP Budget and many other harmful proposals in between, ensuring that Social Security and Medicare benefits remain adequate for millions of Americans is not the primary goal.  The #1 goal is to cut benefits.  Rather than address the many solvency proposals which don’t rely solely on benefit cuts, GOP candidates have chosen to pretend these plans simply don’t exist, thus the “do nothing” straw-man argument.

4.   Slashing Benefits Isn’t the Only Way to “Save” Social Security and Medicare

When a candidate promises to “save these programs for future generations” by raising the retirement age, raising the Medicare eligibility age, privatizing Social Security, changing the COLA formula and means-testing Social Security while exempting near retirees what they’re actually saying is:  “We know seniors vote so we’ll protect them now and slash future benefits for their children and grandchildren instead.”  This cynical GOP messaging strategy isn’t new.  But it ignores the fact that seniors understand the recession generation will need Social Security and Medicare, particularly as they face high unemployment, wage stagnation and historically high student loan rates.

What You Won't Hear Tonight

Here are a few examples of proposals you won’t hear about tonight: lift the Social Security payroll tax cap so that the wealthy pay their share, allow Medicare to negotiate for prescription drugs in Part D, reinstitute Part D drug rebates from pharmaceutical manufacturers and allow billions in Medicare Advantage overpayments to private insurers to be fully phased out as provided in the ACA.  You can be sure none of these proposals will be offered by GOP Presidential candidates tonight, even though they would save billions and spare current and future retirees, survivors and the disabled from devastating benefit cuts. Poll after poll shows the American people of all ages and political parties oppose cutting benefits in Social Security and Medicare.  They’re also willing to pay more to strengthen the program for future generations.  But you won’t hear that tonight either.

America is the wealthiest nation in the world at the wealthiest point in our history, yet rather than focus on growing income inequality, wage stagnation and the death of the middle-class, conservatives hope to shift voters’ attention away from the true causes of our economic malaise in favor of cutting benefits for “greedy geezers” and “takers” who receive Social Security and Medicare, all the while promising to strengthen the programs by slashing them.

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Celebrating Medicare Today and Everyday

At the National Committee, our millions of members and supporters celebrate Medicare everyday.  But for this 50th Anniversary it’s only fitting that our celebration has been bigger, broader and designed to educate and advocate for Medicare’s next 50 years. 

If you haven’t had a chance yet please stop by our 50th Anniversary party online, where you can send a letter to Congress, test your Medicare knowledge and join the celebration as we look forward to Medicare’s Next 50.  

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Jeb Bush Says He'll End Medicare

We suppose we should at least give Jeb Bush brownie points for honesty since he was actually caught saying out loud what the GOP has been trying to do Medicare for years, without actually admitting it.

MSNBC first reported on Jeb Bush's comments made to a room full of Koch Brothers supporters:

"We need to make sure we fulfill the commitment to people that have already received the benefits, that are receiving the benefits," Bush said. "But we need to figure out a way to phase out this program for others and move to a new system that allows them to have something, because they're not going to have anything."

Promising to protect current beneficiaries (because according to the standard GOP meme “greedy geezers” only care about their own Social Security and Medicare benefits not what’s left for their kids or grandkids) is a tried and true GOP strategy. Attempting to destroy Medicare piece by piece is also a strategy we’ve already seen tried by conservatives in Congress.  So it’s likely Bush didn’t even realize he was making news.  Vox described it best this way:

“For years now, Republicans in Congress have been unified around a plan to promise continued Medicare benefits to everyone over the age of 55 while phasing out the program for everyone else. This is the famous — or perhaps infamous — Paul Ryan plan for Medicare. But denying that this is what their plan amounts to has been an important part of the political strategy for getting it done. Except Jeb Bush messed up, and in a talk at an Americans for Prosperity event Wednesday night he said that America needs to "phase out" Medicare.

His argument is that once Medicare is phased out, the GOP can offer the 54-and-under set "something," because the alternative will be to get "nothing."

Recall that back in 2011, the GOP whined endlessly about allegations that they wanted to end Medicare, and PolitiFact dubbed the idea that the GOP wants to end Medicare their "lie of the year."

But as Jeb Bush reveals here, it was never a lie of any sort. Conservatives' preferred answer to the challenge of paying for Medicare in the future is to scrap the program, and that idea has gained wider and wider currency in GOP circles in recent years.”

Bush’s comments were chock-full of other seriously flawed assumptions which MSNBC also breaks down including:

  • The “left” hasn’t done anything to help Medicare – Uhh, how about this week’s Trustees Report which confirms (yet again) an additional 13 years of Medicare solvency thanks to healthcare reform (which the GOP would repeal). 
  • Going door-to-door has shown him the American people support phasing out benefits - We’re not sure what doors Bush is knocking on but there’s not a national poll anywhere (legitimate or otherwise) which shows Americans support ending Medicare.   

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