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From the monthly archives: December 2015

We are pleased to present below all posts archived in 'December 2015'. If you still can't find what you are looking for, try using the search box.

Why 2016 Will Be a Defining Moment for the Future of America’s Retirement Safety Net

By Max Richtman, NCPSSM President/CEO 

Originally on Huffington Post

Saving for retirement continues to be a significant challenge for millions of workers still searching for economic stability in this post-recession era. What’s worse is it will likely become much more difficult if Congress adopts the privatization, benefit cutting and cost-shifting plans the GOP Presidential candidates’ propose for Social Security and Medicare. Before we look at what some of these plans would mean for generations of retirees and their families, it’s important to understand what the current retirement crisis actually looks like for the average American.

Retirement USA reports the gap between what Americans need to retire and what they actually have is $7.7 trillion. In fact, about half of households age 55 and older have no retirement savings and a third of current workers aged 55 to 64 are likely to be poor or near-poor in retirement. Unfortunately, the median retirement account balance is a puny $3,000 for all working-age households and $12,000 for near-retirement households. Contrary to the political rhetoric that all Americans are living longer, the truth is high income men have gained 8 years of life expectancy while low income men have seen virtually no change. White men also live about 12% longer at age 65 than black men. At the same time, a survey of older people in 11 countries finds that U.S. adults are sicker than their counterparts abroad, and are more likely to have problems paying their medical bills and getting needed healthcare. Unfortunately, America’s retirement crisis has earned almost as many “deniers” as the climate change issue.  We can’t continue turning a blind eye to the millions of American families struggling with how to ensure grandparents, parents and ultimately their children can age with dignity without impoverishing themselves.

Rather than acknowledge our national retirement crisis and propose policy prescriptions to improve the ability of average Americans’ to save for retirement and boost benefits for Social Security and Medicare, policy proposals of most of the Republican Presidential candidates do just the opposite – cut benefits and shift more costs to middle-class families. The gap between what Americans need to remain economically secure as they age and what these candidates propose is huge. This is why 2016 will be critical to the economic security of generations of American workers who can’t, nor should they have to, work until the day they die.

Just as we’ve seen from climate change deniers, many Republican politicians won’t even acknowledge the retirement crisis exists because improving the nation’s most successful federal retirement programs is anathema to their misguided belief that Wall Street should be handling your savings and for-profit insurance companies managing your health. When you look at proposals for Social Security and Medicare offered this campaign season, there is virtually no disagreement among Republican Presidential candidates. On one end of a very narrow political spectrum, Governor Christie aggressively attacked Social Security early in the race to prove his conservative bona-fides as a “truth-teller” and to show that he’s willing to tell average Americans that he plans to cut their earned benefits. On the opposite end of the GOP field strategically is Mike Huckabee. He’s taken a more populist tone in defense of Social Security and Medicare while also maligning both programs as federal “confiscation” and “pick-pocketing.” His actual proposals come from the same GOP political playbook: repeal Obamacare which would terminate the billions in Medicare benefits and years of solvency that comes with it, privatize programs, and replace Social Security’s funding with a regressive tax changing the program from an earned benefit into a welfare program.

The rest of the GOP candidates have staked out their own version of “saving” Social Security by slashing benefits and “improving” Medicare by shifting even more costs to seniors. As you can see in the interactive chart below -- based on the candidates’ public comments, written proposals and legislative record -- they have plenty to say about their plans to privatize, cut benefits and shift costs in Social Security and Medicare. The only slight exception is Carly Fiorina, who says she won’t detail her Social Security and Medicare plans until after she’s elected President. In other words, vote first and ask questions later.

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On the Democratic side, all three candidates have plans for Social Security and Medicare which illustrate stark differences between the parties when it comes to addressing America’s retirement crisis.  Hillary Clinton, Bernie Sanders and Martin O’Malley would boost Social Security benefits in differing ways and none support privatization. As one the Senate’s most vocal defenders of Social Security and Medicare, Sanders has introduced legislation to boost basic Social Security benefits and lift the payroll tax cap so that the wealthy pay the same percentage of their wages as the middle class. O’Malley supports the same proposals. O’Malley and Clinton support creating caregiver credits in Social Security for those who take time away from work to raise a family or care for a family member. While Clinton has opposed lifting the payroll tax cap in the past, she now suggests she’s open to the idea. Clinton supports increasing Social Security benefits for the poorest recipients.

While it’s clear that the future of Social Security and Medicare would be radically different if GOP Presidential candidates have their way, the story doesn’t end at the White House. In Congress, Democrats have had their share of political successes and miscues in negotiations with GOP Congressional leaders. This year alone, there have been multiple attempts by Congress to use Social Security and/or Medicare as an ATM to pay for completely unrelated priorities.  Medicare sequester cuts have been extended into 2025. Then Medicare was cut again to help pay for the Trade bill. There was also a failed attempt this summer to fund the highway bill with Social Security cuts and let’s not forget that many Democrats have expressed support for the ill-fated Bowles-Simpson “Grand Bargain” deficit plan which would have been devastating for programs like Social Security and Medicare.

Sounding the alarm about these damaging proposals isn’t just about protecting the current generation of seniors. Cutting America’s most successful retirement income and health security programs at the same time younger workers are coping with stagnant wage growth, higher inflation, college loan debt, and an inability to save enough for retirement threatens their future financial security too. The 2016 elections will be a defining moment for whether America’s retirement safety net stays or goes. It’s critical that American voters of all ages demand that candidates for President and Congress – Republicans and Democrats – are held accountable for policies which will impact generations of American families. 

New Report: Hospitals Using Observation Status to Avoid Medicare Fines

For years, patients and advocates have been warning of the increasing use of the patient classification status known as “observation stays.”  A growing number of patients covered by Medicare, have spent days in the hospital, only to be surprised with large out-of-pocket costs and an inability to access long-term care because they were totally unaware the hospital never actually admitted them as a patient.  Legislation signed by President Obama this summer was designed to limit the use of “observation stays.”

“The Notice of Observation Treatment and Implication for Care Eligibility Act would require hospitals to notify beneficiaries receiving observation services for more than 24 hours of their status as an outpatient under observation. The written notification would have to explain that because the beneficiary is receiving outpatient rather than inpatient services, they will be subject to cost-sharing requirements that apply to outpatient services. The notice also must say that the beneficiary's outpatient stay will not count toward the three-day inpatient stay required for a beneficiary to be eligible for Medicare coverage of subsequent skilled-nursing facility services.” ...Modern Healthcare

Now, a new analysis by the Wall Street Journal shows that observation stays have been used even more than previously documented.  In fact, the WSJ reports observation stays at hospitals have increased 156% and explains why many hospitals have lowered their readmissions and thus the fines that come from too many Medicare patients returning to the hospital.  

“...at hospitals around the country, more patients are entering or re-entering hospitals under something called “observation status”—a category that keeps them out of the readmission tallies. Patients on observation status can remain in the hospital for days, and typically receive care that is indistinguishable from inpatient stays, experts say. But under Medicare billing rules, the stays are considered outpatient visits, and as such, don’t trigger penalties under the health law.

The Journal’s analysis of Medicare billing data shows that increases in observation stays can skew the readmission numbers, letting hospitals avoid penalties even if patients continue to have complications and return for repeat visits. Observation stays generally are cheaper for the government, but in some cases they can lead to big bills that are the patient’s responsibility.”

In other words, rather than managing care to reduce the costs of readmission, many hospitals are relying on an administrative sleight of hand to avoid penalties.

Across the roughly 3,500 short-term acute-care hospitals—often referred to as general hospitals—that face the penalty program, the Journal identified a drop in readmission rates of about 9% from 2010 to 2013 for penalty-program conditions. Follow-up observation-stay rates increased about 48%. The rise in observation stays accounted for about 40% of the decline in readmissions, by the Journal’s measure.

So while hospitals avoid paying penalties and Medicare pays less to beneficiaries, we all know who ends up footing the bill again -- seniors and their families. 

Happy Holidays from NCPSSM

Congress Investigates Skyrocketing Rx Drug Prices

It’s certainly no surprise to Medicare beneficiaries that America’s prescription drug industry continues to take a growing share of the average American’s health care costs. A new survey by Kaiser Family Foundation shows drug expenses actually takes an even bigger bite than experts previously thought.   

“High drug prices have been in the news because of costly drugs to treat Hepatitis C, among other illnesses, and because elected officials and political candidates have been talking about drug costs. Rising drug prices, expanded coverage of the uninsured under the Affordable Care Act, and an improving economy have also contributed to an uptick in the rate of increase in health spending. But depending on what you count and how you count, drug spending may be an even larger problem than many thought. It clearly is for employers, who foot a large share of the nation’s health-care bills.”...Drew Altman, Kaiser Family Foundation

The Senate Special Committee on Aging has launched an investigation into recent cases in which pharmaceutical companies acquired a decades-old drug and then increased the price significantly.

The committee singled out four companies: Turing, Valeant, Rodelis and Retrophin.  USA Today detailed some of the outrageous price hikes and their impact on Americans who needed life-saving prescription drugs:

Spiraling costs for two heart drugs owned by drugmaker Valeant Pharmacueticals International increased the Cleveland Clinic's total drug budget by $8.6 million, hearing testimony showed.

North Carolina doctors treating a baby for toxoplasmosis were unable to get the Daraprim medication that targets the parasitic disease because Turing Pharmaceuticals had raised the price 40 times beyond its original cost. The doctors instead had to use an alternative medication.

Erin Fox, director of the drug information service at the University of Utah Health System, testified that a price hike from $440 to $2,700 forced her to keep a Valeant heart drug locked up after removing it from medication carts where it previously had been available.

Sen. Claire McCaskill, D-Mo., the committee's ranking minority member, said the committee's continuing investigation had found a pharmaceutical industry "market failure."

"And when there's a market failure, the government has a role in addressing it," said McCaskill.

In Medicare’s case, the government also has the ability to address the high costs of prescription drugs, saving the program and seniors money. One simple solution is to allow Medicare to negotiate prices for prescription drugs which could save the program and its beneficiaries billions of dollars.

“The law that established Medicare Part D explicitly prohibits the prescription drug program from negotiating lower drug costs for beneficiaries. The major pharmaceutical companies adamantly defend this rule, contending that the higher prices are necessary to support the industry’s investment in research and development. However, a comparison of the prices paid by Part D with those paid by the Department of Veterans Affairs (VA) and other agencies shows that Part D could save billions of dollars through the use of additional negotiation techniques. Our analysis finds that the VA attains drug prices that, on average, are 48 percent lower than Part D plan prices for the top 10 drugs covered by the program.” ...”Price Negotiation for the Medicare Drug Program: It is Time to Lower Costs for Seniors,”  NCPSSM Issue Brief


UPDATE: Congress Funds 9-11 First Responders Without Targeting Medicare

The Omnibus Budget bill came out late last night and it appears Congress did the right thing.  It will provide about $3.5 billion for the vitally important World Trade Center Health Program, guaranteeing that more than 72,000 known responders and survivors will have access to health care for 75 years.  Another $4.6 billion will go to extend the 9/11 Victims Compensation Program for five more years. Huffington Post reports:

The major battles were focused on the question of how the bill would be paid for, with a number of the sponsors' offers being rejected. Ultimately the bill used funding that had been earmarked for other measures that were running into opposition. One of the funding streams used for the 9/11 compensation fund will also provide over $1 billion to compensate U.S. victims of the Iran hostage crisis, the 1983 attacks on the U.S. Marine barracks in Lebanon and the 1996 bombing of the Khobar Towers in Saudi Arabia. That was a key goal of House Judiciary Chairman Bob Goodlatte (R-Va.). 

Congress still has to pass the spending bill, but Republican leaders expect that to happen by Thursday.

As always, the devil is in the details and advocates are pouring through the legislation now to ensure there are no other “surprises” hidden there.  However, news that Congress will reauthorize the 9-11 Fund without using Medicare and Medicaid as an ATM (once again) is good news for our brave 9-11 first-responders and also millions of Americans and their families who depend on Medicare and Medicaid for their healthcare. 

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