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    Letter to the Senate: Deficit Talks

    June 28, 2011

    United States Senate
    Washington , DC 20510

    Dear Senator:

    On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I am asking you to contact Senate Majority Leader Reid and urge him to protect Medicare, Medicaid, and Social Security - programs of extreme importance to today's seniors and future retirees - during discussions with the President and House Speaker Boehner on reducing the federal deficit.

    We are particularly concerned about harmful cuts or global spending caps that will shift health and long-term care costs to beneficiaries and the states. This would be devastating for Medicare beneficiaries, including the many beneficiaries who also rely on Medicaid to pay for Medicare's cost-sharing and for long-term care services and supports.

    In addition, we are concerned about proposals that reportedly are under consideration that would have the effect of reducing the cost-of-living adjustment (COLA) that seniors depend on in retirement to protect their Social Security benefits' purchasing power against the harmful effects of inflation. The current cost-of-living index, known as the CPI-W, while helpful, does not come close to staying in line with the skyrocketing cost of health care, which eats up a significant portion of every retiree's benefit.

    Yet, despite the deficiencies of the current index, some in Congress are proposing cutting the COLA beginning as soon as January 2012 by moving to a chained-CPI formula. Switching to a chained CPI will permanently cut COLAs for generations of retirees and the disabled, making it harder and harder for them to make ends meet. Recent analysis estimates that, over time, the annual benefit cut stemming from the chained-CPI will total almost $1,400.

    Please ask Majority Leader Reid during budget negotiations to oppose :

    Proposals that will increase the cost of Medicare for seniors who already pay 27 percent of their average Social Security benefit for Medicare Parts B and D cost-sharing. This is in addition to out-of-pocket health care costs not covered by Medicare. With half of Medicare beneficiaries living in households with incomes below $22,000, they cannot afford to pay more for health care.

    Reductions to Medicaid funding that would affect low-income seniors . Older adults and people with disabilities account for two-thirds of all Medicaid spending, and Medicaid pays for about 62 percent of all long-term services and supports. Proposed cuts to Medicaid - including the establishment of a federal Medicaid "blended rate" - would affect older Americans by jeopardizing the availability and quality of long-term care both in nursing homes and in the community, and by impairing low-income seniors' ability to receive assistance through the Medicare Savings Programs to help pay their Medicare out-of-pocket costs.

    Cutting the COLA by replacing the current CPI-W with the chained-CPI. The National Committee agrees that it is critical for the COLA to be calculated based on an accurate formula, and that the current index fails to do so. But we believe that the chained-CPI is the wrong way to go. Instead of producing an inflation adjustment that more accurately reflects the spending patterns of the elderly, the chained-CPI moves in the opposite direction. We believe that Congress should enact legislation that calculates the COLA by using the CPI-E, an index that more accurately reflects retirees' spending priorities that has been undergoing testing by the Bureau of Labor Statistics for many years.

    The National Committee realizes the importance of reducing the federal deficit, but in doing so, Congress must, as it has in the past, protect programs that provide health and economic security to older Americans today and in the future. We urge you to oppose caps on federal spending that do not take into account factors such as our recent economic recession, the aging of the population, or rising health care costs in the private sector. We look forward to working with you on proposals to strengthen Medicare and Medicaid that do not shift burdensome health care costs to beneficiaries, and to strengthen Social Security by changing the COLA so that it more accurately reflects seniors' purchasing patterns.

    Sincerely,

    Max Richtman
    President & CEO