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Celebrating 49 Years of Medicare Success

Medicare Means Healthier Lives for Millions of Americans

“In the hyper-partisan, budget-slashing environment that drives our Washington debate these days, the impact that Medicare has on the lives of average American families is often overlooked.  The truth is Medicare saves lives and money.  Without Medicare many more seniors would be impoverished, sicker and dependent on others, including federal, state and local governments.  A healthy nation depends on a healthy populace, physically and fiscally.  Medicare helps us to achieve the American dream of a stable and independent retirement after working a lifetime to help build the nation’s economy. As we celebrate Medicare’s anniversary, we should pledge to preserve that dream for the future.”...Max Richtman, NCPSSM President/CEO

Medicare – Then and Now

  • Before the enactment of Medicare, one-half of older Americans were uninsured and one-third were living in poverty.  Today, with access to health care coverage, the poverty rate for seniors is nine percent.
  • 52.4 million Americans receive guaranteed health care benefits through the Medicare program regardless of their medical condition or income.  This includes: 43.6 million Americans age 65 and above and 8.8 million disabled Americans receiving Social Security benefits. By the time the last of the baby boomers reaches age 65, it is expected that close to 80 million people will be covered through Medicare.
  • Over half of Medicare beneficiaries have annual incomes of less than $23,500 and savings of less than $61,400. Forty percent have three or more chronic conditions. Even a minor illness or injury could bankrupt older Americans and their families. 
  • While health care costs have increased three times faster than wages over the past decade, health care reform has slowed the cost growth in Medicare.  The 2014 Trustees Report added an additional 4 years of solvency to the Trust Fund, extending to 2030.

As Medicare approaches a half-century of successfully keeping older Americans healthy, while also curbing costs for seniors and the program itself, Washington should be looking for ways to build on those successes not destroy them through further privatization and cost-shifting.

 National Committee advocates and volunteers joined Members of Congress to celebrate Medicare's anniversary at a Capitol Hill event on the 30th.

2014 Social Security & Medicare Trustees Report

Hold the Rhetoric, Pass the Truth on the 2014 Trustees Report

This year’s projections come as no surprise to anyone who understands how Social Security and Medicare work. In fact, historically, the solvency date for the Social Security Trust Fund has fluctuated from a depletion date as distant as 2048 in the 1988 report to as soon as 2029 predicted in 1994 and 1997. On Medicare, each year since passage of the Affordable Care Act, the Trustees have reported the program’s improving solvency, this year adding an additional four years until 2030.  We should build on that success and continue reducing the high cost of health care system-wide, not just in Medicare.

This year’s Trustees reports prove, once again, how successful and stable Social Security and Medicare continue to be for the American people and the federal government.”... Max Richtman, NCPSSM President/CEO

Here are some of the key points in the 2014 Trustees Report:

·         Trustees project Social Security will be able to pay full benefits until the year 2033.  After that, Social Security will still have sufficient revenue to pay 77% of benefits if no changes are made to the program.

·         Social Security remains well-funded. In 2014, as the economy continues to improve, 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 2019. 

·         Trustees project a Cost of Living Adjustment increase of about 1.5% in 2015.

·         The Trustees report there is now nearly $2.76 trillion in the Social Security Trust Fund, which is $32 billion more than last year and that it will continue to grow by payroll contributions and interest on the Trust Fund's assets.

With so little bad news to report in this 2014 Trustees report, critics have now shifted their attention to Social Security Disability Insurance (SSDI), which faces a more immediate challenge and requires Congress’ action for a reallocation.

·         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.  When Congress took action in 1994 to address a shortfall in SSDI, it knew that it would have to take action again in 2015 or 2016. Unfortunately, some in Congress have politicized this anticipated shortfall and threatened to delay action in order to force cuts throughout the entire Social Security program.

On Medicare, the 2014 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 2030, four years later than the 2013 report. Health care spending has also grown much more slowly.

·         Medicare Part B premiums are not projected to increase in 2015. 

Cutting Social Security & Medicare = Economic Patriotism?

If you had any doubt about just how stark the differences are between the Republican and Democratic approach to fixing our economy, these dueling letters between Treasury Secretary Jack Lew and GOP Senator Orrin Hatch should clear that up for you quickly.  At issue is the idea of “economic patriotism.”

First, some background...

There’s currently a loophole in our tax code that allows American companies to dodge paying taxes by renouncing their corporate citizenship, leaving operations here but claiming an overseas address. This legal tax dodge costs our nation billions of dollars each year.  

“The practice has become known as “inversion.” But what it really amounts to is desertion. And it could cost Americans tens of billions of dollars. There are 47 firms in the last decade that have exploited this loophole, according to new data compiled by the nonpartisan Congressional Research Service. But it’s a hot topic again because at least a dozen U.S. firms are currently considering taking advantage of it.”...Center for American Progress

The President’s 2015 budget would make it harder for firms to reap the benefits of being an American company while simultaneously dodging their tax obligations by requiring a minimum 50% foreign ownership to avoid U.S. taxes (it’s currently only 20%). This week, Lew sent a letter to Congress urging quick action (okay, try not to laugh...) to pass inversion legislation.

“Congress should enact legislation immediately...to shut down this abuse of our tax system. What we need as a nation is a new sense of economic patriotism, where we all rise and fall together.  We know that the American economy grows best when the middle class participates fully and when the economy grows from the middle out.  We should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes.”

Sounds reasonable, right?  Not according to the ranking GOP member of the Senate Finance Committee who penned a testy letter in reply.  Not only does Senator Hatch reject the legislative fix offered by Senate Democrats to recoup the billions lost to corporate scofflaws he also redefines the idea of “economic patriotism” by shifting the target from known corporate tax dodgers to American families who depend on Social Security, Medicare, Medicaid and the Children’s Health Insurance Program:

“I must disagree with the administration's position that we should, in the short term, enact punitive, retroactive policies designed to force companies to remain domiciled in the United States.”

“My hope is that your definition of "economic patriotism" is not so narrow as to only include a particular business practice ... I hope that you share my view that "economic patriotism" includes a desire to fix the problems that are truly ailing our country and threatening the livelihoods of future generations. Non-partisan watchdogs and rating agencies have been issuing warnings about our ballooning national debt and runaway entitlements for years now. These issues represent the greatest threat to our fiscal and economic security...”

Welcome to Washington, where you’re an “economic patriot” if you turn a blind eye to corporate tax dodgers who owe this nation billions of dollars and instead take it from middle-class benefits paid for by average Americans , the truest patriots of all, who worked a lifetime building the economy that fuels those corporate profits to begin with. 

Disabled Americans are Conservatives’ New “Welfare Queens”

“There is a quiet, covert war being waged on Social Security. The tactic? Divide and conquer. Today, detractors try to use Social Security Disability Insurance as a back door to cut the program as a whole. And, we will organize and fight back against today’s attacks aimed at some of the most vulnerable Americans: the disabled.”  Sen. Sherrod Brown (D-OH)

Divide and conquer politics is certainly nothing new in Washington.  From Ronald Reagan’s mythological nation of “welfare queens” to Alan Simpson’s “greedy geezer” myth of hordes of seniors driving Lexus’ to their gated communities – politicians love to create villains, even if the facts simply don’t back up the political spin.

"It hangs together as a good story because it's consistent with people's perception of the real world," says Craig R. Smith, who was a speechwriter for former President Gerald Ford and a consulting writer with President George H.W. Bush.  "Like in any good mythology, you need heroes and villains and in the Welfare Queen, you had a villain who was taking advantage of the system."

And so it goes with conservatives’ latest target – disabled Americans receiving Social Security benefits. No doubt, you’ve already heard the messaging: Social Security disability fraud is rampant because it’s so easy to receive benefits and people would rather collect a hefty check from the government than work.  It’s the 2014 incarnation of “our nation is full of ‘welfare queens’ and ‘greedy geezers.’” It also suffers from the same basic problem...it’s simply not true.

So let’s break down a few of these Disability Myths.

MYTH: “Disability has become a form of permanent welfare for a lot of folks. It's not that hard to prove a mental illness, or mental issues, or pain issues.” Nina Easton, Fox News commentator

Not that hard?  So, why are the vast majority of claims denied?

FACT: “Nearly 80 percent of applicants are denied at the initial level, and fewer than 4 in 10 are approved after all levels of appeal. Underscoring the strictness of the disability standard, thousands of applicants die each year while waiting for benefits. And one in five male and nearly one in six female beneficiaries die within five years of being approved for benefits. Disability Insurance beneficiaries have death rates three to six times higher than other people their age.” Center for American Progress

It’s seems pretty ridiculous to claim the system’s being widely-abused when so many die just years after receiving benefits or while they’re still waiting for an answer.

MYTH:  Growth in disability claims is “astonishing”, an “epidemic” and “startling.” 

Actually, it’s called demographics.  Ever heard of the baby boomers? Former SSA Commissioners from both Republican and Democratic administrations have taken issue with this fact-free, hysteria-laden portrayal of the disability program’s growth.

FACT:  “It is true that DI has grown significantly in the past 30 years. The growth that we’ve seen was predicted by actuaries as early as 1994 and is mostly the result of two factors: baby boomers entering their high -disability years, and women entering the workforce in large numbers in the 1970s and 1980s so that more are now "insured" for DI based on their own prior contributions.” Open Letter from former SSA Commissioners

 “...four-fifths of the program’s total enrollment in 2013 — and over two-thirds of the growth in enrollment since 1980 — stems from five easily quantifiable factors:  growth in the overall working-age population, the aging of that population, growth in women’s labor force participation, the rise in Social Security’s full retirement age, and the growth in DI receipt among women eligible for benefits to match men’s rate of receipt. In short, the factors driving DI’s growth are reasonably well understood, were long anticipated, and do not depict a program that is ‘out of control.’” Center on Budget and Policy Priorities

“As Baby Boomers retire, the program’s growth has already leveled off and is projected to decline further in the coming years.”  Center for American Progress

MYTH:  The entire system is “broken,” rife with “fraud” and “rubber-stamping judges” bankrupting the entire Social Security program.

 FACT:  The Government Accountability Office found that improper payments of Social Security benefits that include Disability Insurance had an error rate of just 0.6 percent. Government Accountability Office

 An investigation by the Social Security Administration’s Office of the Inspector General looked at the 10 states with the highest increase in disability applications from 2007-2011.  That report found that while the number of applications increased...approvals declined. Social Security Administration OIG

Rep. Darrell Issa (R-CA) is a leading promoter of the Disability Myths. .  His committee has zeroed in on the casework of just four out of 1,400 disability judges to bolster his claims of widespread fraud in the program. 

“Issa's report twists all these facts and figures to create a fantasy of a program running amuck. He says "an extraordinary number" of administrative judges "were allowing the vast majority of their decisions"; in fact the overall approval rate of cases that come before the judges is 58%.”  Michael Hiltzik, Los Angeles Times

“First, these judges were deliberately selected by the House Oversight Committee because they were outliers who approve a high percentage of the cases brought to them. The Social Security Administration has almost 1400 administrative judges. Undoubtedly many are also outliers on the other side, denying most of the cases brought to them.” Dean Baker, Center for Economic and Policy Research

“...not all judges are "rubber-stamping" disability claims, and the overall allowance rate fell from 72 percent in 2005 to 56 percent last year.” Andrew Biggs, American Enterprise Institute   

The timing of this attack on Social Security’s disability program is not an accident. It’s the cornerstone of Congressional Republicans’ campaign to oppose both President Obama’s nomination of a new Social Security Administration Commissioner and (what in the past has been) the routine reallocation of the Trust Fund to prevent a 20% disability benefit cut in 2016.

Rather than address the disability shortfall head-on, as so many Congresses have before, conservatives hope to hold the disability program hostage in return for cuts throughout the entire Social Security program.

“Playing chicken with the trust fund would be devastating, Ruffing said. “If Congress allows the disability trust fund to run dry, then what will happen is benefits to all recipients will be cut by approximately 20 percent, which is obviously an unacceptable outcome,” she said. “It’s a completely unnecessary form of brinkmanship.” Kathy Ruffing, Center on Budget and Policy Priorities on NBC News

 “Since Social Security was enacted, Congress has "reallocated" payroll tax revenues across the OASI and DI trust funds – about equally in both directions – some 11 times to account for demographic shifts. In 1994, the last time such reallocation occurred, SSA actuaries projected that similar action would next be required in 2016. They were right on target.” Open Letter from former SSA Commissioners

“Reallocation is a straightforward process and the need for it does not come as a surprise,” Virginia P. Reno, NASI Vice President for Income Security Policy

Just as with Ronald Reagan’s “welfare queen” story, there is no doubt that fraud exists. But it’s clearly not what Disability Mythologists claim.  As Social Security advocates, we’ve long supported efforts to crack down on fraud and abuse because strong Social Security and Medicare programs depend on the efficient and appropriate payment of benefits only to those who qualify.  The American people expect the contributions they’ve made throughout their working lives will be spent appropriately.  So, if it is possible to further rid Social Security’s disability program of it’s tiny percentage of fraudulent claims then we whole-heartedly support those efforts. 

However, let’s be very clear about one thing -- that’s not what the Disability Myth is all about.  This isn’t a debate between one side that supports Social Security fraud and those who oppose it.  This is a debate between those who refuse to allow Americans with disabilities to be held as political hostages with threats of a 20% benefit cut by those whose true goal is to cut the entire Social Security program, through privatization or countless other means. That’s the ultimate goal of this divide and conquer strategy which portrays America’s disabled workers, the same people who have paid for their earned benefits, as villains.

We’ll end just as we began, with this warning from Senator Sherrod Brown (D-OH):

“Opponents of Social Security realize that when they attack the program head on, they lose. So, their strategy is two-fold: First, convince the public that the disability insurance program is bankrupt. Second, separate Social Security from disability insurance in the eyes of voters. We need to recognize these attacks for what they are – backdoor attempts to weaken Social Security by dismantling disability insurance.”

Happy Independence Day

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