Let us not speak of pigs and lipstick, but simply say that the freshly tweaked GOP health care bill introduced last night still socks it to older Americans. In an attempt to throw bones to both moderate Republicans and Tea Partiers, Speaker Paul Ryan has come up with a revised bill that’s even worse than the original for seniors and “near seniors” (under 64 years of age). The Center for Budget and Policy Priorities has just released a detailed analysis forecasting higher net premiums, co-pays, and out-of-pocket costs for older Americans under the revised bill. Here is our own take on why there's nothing to like in the tweaked legislation:
Millions of seniors depend on Medicaid to cover the cost of long-term care, while low income Americans 50-64 rely on the program for basic health care. The original GOP bill cut nearly $1 trillion from Medicaid and imposed per capita caps on federal payments to the states. The revised legislation adds another insidious idea to the equation by introducing block grants, where states can decide to curtail or outright cut certain services. Per capita caps and block grants mean one thing: less funding for older patients who need medical services and long-term care - and in some cases, complete loss of coverage. For seniors, It’s two bad ideas in one bill.
The revised GOP bill does nothing to address a major problem with the original. Under the revised legislation, Insurance companies would still be able charge older Americans up to five times as much as people in their 20s (a practice referred to as “age rating”), one reason why the Congressional Budget Office estimated that 24 million people would lose coverage under the Republican plan.
Obamacare provided generous subsidies to people who couldn’t afford private insurance premiums. The GOP bill replaced those subsidies with paltry tax credits that discriminate against older patients. Paul Ryan’s tweaked version kicks the problem over to the Senate by authorizing the upper chamber to increase tax credits for older Americans… if it wants to. There’s no guarantee the Senate will actually do this, or that fatter tax credits will make it into the final bill. Once again, the revised GOP plan leaves older folks worse off.
While giving nothing to seniors, the revised bill still repeals $600 billion in tax cuts for the wealthy (and $24 billion for pharmaceutical companies) that Obamacare utilized to expand health coverage and strengthen Medicare. The tweaked bill actually sweetens the deal for the wealthy – repealing the taxes in 2017 instead of 2018.
The GOP plan still weakens Medicare through the repeal of a 0.9% tax on income over $200,000. By rescinding the tax, the GOP plan reduces the solvency of Medicare by 3 years – and the revised bill does nothing to lengthen it. Reducing Medicare’s solvency gives budget hawks an excuse to privatize and cut the program, which hurts seniors.
We don’t know whether the dressed-up GOP plan will pass the House. It’s possible that the concessions to Tea Partiers and token gestures to moderates – plus active lobbying on President Trump’s part – will allow it to squeak by. Either way, Speaker Ryan squandered an opportunity to reverse some of the damage to healthcare and long-term care for our older and most vulnerable citizens.
The President’s budget director can’t seem to help casting doubt on the administration’s commitment to keep its hands off Social Security and Medicare. Appearing on CBS Face the Nation this weekend, Mick Mulvaney openly questioned whether disability insurance should be part of Social Security.
"Let me ask you a question, do you really think that Social Security Disability Insurance is part of what people think of when they think of Social Security?” he asked. “I don’t think so... It’s a very wasteful program and we want to try and fix that.” – Budget Director, Mick Mulvaney 3/19/17
The moderator cut to a commercial right after that statement, so Mulvaney was not asked to elaborate on what he meant by “fixing” Social Security Disability Insurance. We can only assume that “fixing” really means cutting benefits. His remarks demonstrate a disregard for the facts about Social Security Disability Insurance (SSDI), and its very history.
Nearly 11 million Americans currently collect Social Security Disability Insurance benefits. Disability insurance has been part of Social Security since 1956. During the two decades after Social Security was created in 1935, a consensus evolved that not only retirees – but the disabled – require social insurance to stay out of poverty. It was a natural extension of the philosophy underpinning Social Security that President Franklin D. Roosevelt so eloquently summarized as protecting the population against “the hazards and vicissitudes of life.”
A few dangerous myths underlie Mulvaney’s statements about Social Security disability insurance. Here are the facts:
*SSDI is not a handout. The truth is that anyone receiving SSDI must meet the same basic qualifications as other Social Security beneficiaries do. Beneficiaries – or their parents – must have worked and contributed payroll taxes to Social Security in order to collect disability benefits.
*There’s a stringent set of parameters that SSDI applicants must meet. Only 40% of applicants actually qualify for disability benefits.
*SSDI beneficiaries do not have minor disabilities. 28% of beneficiaries have serious musculoskeletal disorders; 28%, serious mental illness; 9%, nervous system disorders and 9% circulation disorders, among others.
In case the seriousness of these conditions is still in doubt, consider this: a beneficiary collecting disability benefits beginning at age 50 only lives an average of 8 years past that point. Some 8,000 applicants died in Fiscal Year 2016 waiting for a decision on their disability claims – due to backlogs at the Social Security Administration caused by draconian budget cuts.
When an official like Mulvaney makes comments about “fixing” Social Security Disability with the benefit cuts that implies, he is playing off of worries about the solvency of the Social Security Disability Insurance (SSDI) trust fund. The SSDI trust fund is separate from the retirement (OASI) trust fund, and is projected to remain solvent until 2022 if Congress takes no action to fortify it. The National Committee supports Congressman John Larson’s Social Security 2100 Act (to be re-introduced in the House later this month), which – among other things – combines OASI and SSDI into a single, more durable Social Security Trust fund. This, along with legislation proposed by Senator Bernie Sanders and others, could preserve the solvency of Social Security well into this century without cutting benefits – including the ones that help people with serious disabilities maintain their financial security and their dignity.
National Committee President Max Richtman has rightly called the GOP Obamacare replacement “a triple whammy for seniors” because of its impacts on the private insurance market, Medicare, and Medicaid. Yesterday’s report from the Congressional Budget Office confirms this grim assessment. Of the 24 million Americans who will lose health coverage over the next decade, many will be seniors and “near-seniors” aged 50-64 who can least afford to go without much needed medical care.
PRIVATE HEALTH INSURANCE
On the private health insurance front, the CBO projects that premiums will rise by more than 20% for older Americans. This is mainly because the bill allows insurers to charge older customers up to 5 times more than younger ones. At the same time, the GOP legislation yanks the financial rug from underneath older enrollees by replacing generous Obamacare subsidies with meager tax credits. According to today’s New York Times:
“The CBO estimates that the [net] price an average 64-year-old earning $26,500 would need to pay… would increase to $14,600 under the Republican plan.” – New York Times, 3/14/17
The Times reports that older American’s out-of-pocket insurance costs would also rise:
“The hypothetical older customer who could pony up $14,600 for insurance under the GOP plan would also pay substantially more out of pocket for any health care services. And changes to the requirements for health plans mean that, across the board, deductibles and cost-sharing will increase.” – New York Times, 3/14/17
The reason for the word “hypothetical” is that most older Americans would not be able to afford $14,000 in premiums, let alone rising deductibles and co-pays. Unable to pay these exorbitant prices, millions of “near seniors” (aged 50-64) will simply have to drop their health insurance during those crucial years before they are eligible for Medicare and need it most.
The GOP phase-out of Obamacare’s Medicaid expansion will also hit near seniors in the lower income brackets particularly hard. As a result of these changes, the CBO finds that people between 50 and 64 years old earning less than 200% of the federal poverty level would make up a larger share of the uninsured, from just over 10% under Obamacare to nearly 30% under the Republican replacement. To re-iterate: 30% of near seniors earning a modest income will lose healthcare coverage from Medicaid. That’s nearly one third of the lower income seniors who benefited from the Obamacare Medicaid expansion.
The GOP bill also radically restructures Medicaid by ending guaranteed federal matching funds to the states and effectively cutting $880 billion from the program over ten years. Cash-strapped states will be compelled to compensate for this shortfall by cutting benefits and eligibility for Medicaid. The CBO estimates that 14 million people will be forced off of Medicaid rolls by 2026. This is particularly bad news for seniors who rely on Medicaid to pay for long term care services and supports when their personal savings are depleted. Those seniors will either have to rely on their financially-squeezed families to pay for long term care, or be forced to forgo the care they need.
According to the CBO report, the Republican health plan achieves most of its budget savings by rescinding taxes on higher-income Americans. Unfortunately for current and future retirees, those tax revenues were helping to keep the Medicare program on a sound financial footing. By repealing a $117 billion tax on income above $200,000 a year, the GOP bill reduces the solvency of Medicare by 3 years.
In a perversely self-fulfilling prophecy, the very budget hawks who insist that Medicare needs to be “reformed” because of its solvency problems are now making the program even less financially sound. This opens the door for the “reformers” to argue even more vehemently for privatizing Medicare and turning it into a voucher program, which will hurt seniors with low or modest incomes.
REVERSE ROBIN HOOD
In reviewing the CBO analysis, a theme quickly emerges. The Republican plan rips benefits away from lower income and older Americans while rewarding upper income earners with billions of dollars in tax breaks. It achieves federal budget savings on the backs of the people who can least afford to sacrifice. The young, healthy and wealthy do better under the GOP plan. With the triple assault on Obamacare, Medicaid, and Medicare, seniors and near seniors are left in the cold. As National Committee president Max Richtman likes to say, the Republicans’ message to older Americans seems to be, “You are going to be on your own and good luck… and I'm not even sure about the ‘good luck’ part.”
We discussed Trumpcare's impact on older Americans on Facebook Live "Behind the Headlines." Watch here.
Read the National Committee's response to the CBO report here.
MSNBC’s Ali Velshi summed up the problem with the GOP’s Obamacare replacement plan succinctly: The winners are the young, the wealthy, and insurance companies. The losers are the elderly, poor, and sick. That seems like the opposite of what would be morally just – and smart policy – for the wealthiest nation on earth. Instead, the healthiest and wealthiest benefit while the sickest and most vulnerable suffer under this new plan. Our nation’s seniors, in particular, will fare significantly worse if the American Health Care Act (as it’s benignly named) becomes law, because it weakens Medicare and radically restructures Medicaid – two of the most important federal programs for the elderly. Meanwhile, the bill gives the wealthy a $600 billion tax cut over ten years.
Here are some of the most harmful facets of the GOP plan affecting seniors:
*Imposes “per capita” caps on Medicaid payments to the states after 2020, amounting to a $370 billion funding cut over 10 years. This will likely compel states to cut benefits to seniors who rely on Medicaid to pay for skilled nursing and long-term care. Standard & Poor’s estimates that 4-6 million beneficiaries will lose Medicaid coverage altogether.
*Rolls back insurance premium support for Americans in their 50s and 60s, putting their health and wellness at risk in the crucial years before they are eligible for Medicare.
*Allows insurance companies to charge older Americans up to five times more than younger enrollees, putting health coverage out of reach for millions of middle-aged Americans and younger seniors.
*Repeals a tax on wealthy Americans that was helping to keep Medicare solvent. Eliminating those taxes on high earners will reduce the solvency of the Medicare Trust Fund by at least 4 years.
The Republican plan replaces Obamacare’s health insurance subsidies with tax credits that will barely make a dent in older Americans’ premiums. Individuals between the ages of 50 to 59 would receive a tax credit of $3,500 per year; Anyone over 60 would receive a meager $4,000 per year. What’s more, the tax credits are phased out for individuals earning over $75,000 annually or $150,000 jointly. Given that healthcare premiums for a 64 year-old are projected to climb to $13,125 per year under the GOP plan, these tax credits will fall pathetically short.
Even with the tax credits, fresh analyses indicate that Americans’ out-of-pocket healthcare costs will rise under the GOP plan. In its blog, The Big Idea, today Vox concludes:
"Once the differences in tax credits are accounted for, the bill would increase costs significantly. [Higher] cost-sharing would greatly increase financial risk. If you’re now paying 50 percent of your costs, instead of 75%, a big hospital bill could be devastating.” - Vox’s The Big Idea
For all the Republicans’ griping about Obamacare premiums being too expensive, Vox estimates the average policyholders’ out-of-pocket costs will increase by $1,542 per year even if their premiums go down.
Returning to Ali Velshi’s summary of winners and losers, one can see a resemblance between the way the GOP plan health pits the young against the old, the wealthy against the less fortunate, and the healthy against the sick… and the tactics they employ in attempting to cut Social Security and Medicare. The trouble is that eventually everyone will grow old, and at some point in our lives we all will be sick. Everyone – young and old – needs affordable health care. In replacing Obamacare with this newer, more miserly plan, millions of Americans will not be able to afford the healthcare they need.
We have been skeptical since last fall about President Trump’s promises not to touch Social Security and Medicare, partly because of the privatizers and cutters he appointed to high office. Now, according to an article in today’s Washington Post by reporter Dave Weigel, Trump’s budget director, Mick Mulvaney, is actively agitating for the Trump administration to “work around” those promises:
"I’ve already started to socialize the discussion around here in the West Wing about how important the mandatory spending is to the drivers of our debt. I think people are starting to grab it.” - Mick Mulvaney on Hugh Hewitt radio program
Mulvaney claims that he is not really advocating that the President break his promises. Instead, the budget chief seems to be playing a semantic game by redefining what Trump really meant.
"Mulvaney… has said that any Republican reform would be consistent with Trump’s promise, by defining the act of ‘saving’ Social Security and Medicare as anything that allows them to meet obligations — even and especially if those obligations are reduced.” – Washington Post 3/6/17
That is a dubious bending of the President’s words on the campaign trail. Mulvaney is, in effect saying, we have to cut Social Security and Medicare in order to save them, which is patently wrong. The two programs could be kept solvent deep into the 21st century through modest and manageable measures that we have detailed many times since last Fall, with no benefit cuts. In fact, Senator Bernie Sanders’ new bill in Congress would increase benefits and extend Social Security’s solvency until 2078.
Mulvaney is being even more disingenuous, though, because candidate Trump explicitly promised not to cut either program. Trump told a post-election rally in Des Moines in December:
"You’ve been paying into Social Security and Medicare… We’re not gonna cut your Social Security and we’re not cutting your Medicare.” - President-elect Trump, December, 2016
It’s hard to see how Trump could have been any clearer, or how Mulvaney could claim the President could be convinced to cut Social Security and Medicare without violating his campaign promises. Yet, Mulvaney’s proposals on earned benefits programs would undeniably lead to benefit cuts. The Post points out that at his January confirmation hearing, he advocated raising the Social Security retirement age to 70, and supported means-testing to reduce Medicare spending, two unpopular measures with voters in the National Committee’s recent public poll.
Of course, Mulvaney is not the only Trump administration official gung ho to cut and privatize our retirement security programs. HHS Secretary Tom Price played a similar word game to Mulvaney’s last week, affirming that Medicare is a “guarantee” to seniors while implying that it has to be modified in order to uphold the guarantee.
We wrote last week about the potential bait-and-switch that the administration and Congressional leaders may use, by promising that current retirees won’t be affected by any changes, but that younger Americans might be by the time they are seniors.
None of this lends much comfort to current or future retirees – nor offers much reassurance that the President’s promises on Social Security and Medicare won’t be eroded, if not now, then in the near future.
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