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The President’s FY 2018 Budget - It Literally Leaves Seniors in the Cold

On May 23, 2017, President Trump submitted his Fiscal Year (FY) 2018 budget recommendations to Congress.  This budget would drastically cut programs that benefit America’s oldest — including many vulnerable — citizens.  The President’s spending plan calls for deep reductions to Social Security Disability Insurance, breaking his promise not to touch Social Security. 

By gutting Medicaid, it jeopardizes access to the long-term care covered by the program -- violating another of President Trump’s campaign pledges.  Other programs that feed needy and isolated seniors, keep them warm in their homes and help them navigate the complexities of Medicare are eliminated or slashed.  This paper summarizes some of the key proposals affecting seniors.

Social Security

President Trump’s budget for FY 2018 proposes to cut up to $64 billion from Social Security Disability Insurance (SSDI) benefits through demonstrations ostensibly geared toward helping disability beneficiaries to stay at work or return to work.  Since 1980, the Social Security Administration (SSA) has initiated eight demonstrations to promote return to work, none having more than a modest effect on beneficiaries’ workforce participation.  Still, the Trump budget envisions demonstrations that would lead to a five percent cut in SSDI benefits by 2027.  Reductions of this magnitude would have to be enforced through punitive work requirements or other harsh measures that slash benefits or cut off eligibility entirely.  Demonstrations are one thing.  Using them to disguise massive benefit cuts is unconscionable. 

The President’s budget calls for a broad array of other benefit cuts for seniors with disabilities, including:

  • limiting the retroactivity of applications for disability benefits from 12 months to six months (This proposal would cut SSDI benefits by an average of $7,000 per beneficiary.);

  • denial of unemployment compensation payments to certain SSDI beneficiaries (This proposal would affect SSDI beneficiaries who work, but get laid off – and as a result -- qualify for Unemployment Insurance.); and

  • unreasonably capping the amount payable to individuals who receive Supplemental Security Income (SSI) while living with other SSI recipients (Average SSI benefits are $540 per month or $18 per day.  The maximum SSI payment is $735 a month, which is 75 percent of the federal poverty guideline for a single person.  Under this proposal, if SSI recipients lived together – including families – their benefits could be reduced beyond what is reasonable.).

In total, these harmful provisions would produce “savings” in Social Security programs that equal a whopping $72 billion over 10 years.  These “savings” are cuts plain and simple.  We call on President Trump to return to the commitment he made with the American people when he ran for election last fall, promising to keep his hands off Social Security rather than using it as a piggy bank to help pay for tax cuts for the wealthy.

The President proposes a modest increase in SSA’s operating budget — about $12.457 billion — for SSA’s FY 2018 appropriation for administrative funding.  This is an increase of $322 million over the FY 2017 appropriation, $309 million of which is designated for program integrity workloads, such as continuing disability reviews and SSI redeterminations of eligibility.  The increase therefore does little to improve waiting times for those applying for benefits or for beneficiaries contacting SSA because of changes in their status, such as death of a spouse or change of address.  While certainly better than a cut, this increase falls short of covering new costs incurred by SSA due to annual inflation and increases in employee compensation.  It will enable SSA to make, at best, only modest increases in the level of customer service the agency provides to America’s seniors.

President Trump’s FY 2018 budget proposal funds production and mailing of only 10 million Social Security statements, 38 million fewer than it mailed in FY 2016.  This proposal is part of SSA’s overall plan to limit sending statements only to individuals who are 60 or older rather than sending them to all workers every five years.  The National Committee urges the Administration to develop plans to send these important financial planning documents to all workers, as is required in section 1143 of the Social Security Act.

While the President’s budget includes no proposals that directly affect Social Security cost-of-living adjustments, or COLAs, we are concerned about his recommendations that will affect COLAs earned by retired federal employees and postal workers.  Specifically, these proposals would strip retirees and survivors who participate in the newer Federal Employees Retirement System of any COLA protection while reducing COLAs for annuitants in the older Civil Service Retirement System by 0.5 percentage points per year.  All of America’s seniors deserve the protection COLAs provide against the ravages of inflation.  That’s why the National Committee opposes tinkering with any retiree COLAs.

Medicaid

Medicaid pays for about half of all long-term services and supports (LTSS) for older adults and people with disabilities. In FY 2014, federal and state governments spent about $152 billion or 32 percent of Medicaid spending on LTSS.

The President’s budget would slash funding for this vital program for seniors by changing the structure of the program into either — by state option — a per capita cap or Medicaid block grant by 2020.  Further, the proposed budget would allow states greater flexibility to manage their programs, allowing them to impose work requirements on Medicaid recipients for example. Through 2027, the president’s budget would cut at least $610 billion from the program. The Medicaid recommendations in the FY 2018 budget are in addition to cuts to Medicaid made by the House-passed American Health Care Act (AHCA). That means total reductions to Medicaid if the president’s budget and the AHCA are enacted would be around $1.4 trillion.

Per capita caps limit federal funding for state Medicaid programs to an arbitrary per beneficiary funding level. Under “block grants,” states would receive a lump sum from the federal government to fund their Medicaid programs.  Block grants and per capita caps would ultimately shift costs to states by eliminating the guarantee of additional federal funds if state costs increase because of underlying health care costs, demography or complexity of care.  For example, as the baby boom generation nearly doubles the senior population, state Medicaid programs would be unable to keep up with demands for long-term services and supports.

Over time, states that lose money under per capita caps or block grants would have to make up the funding themselves, by cutting benefits and/or limiting eligibility, if federal funds do not keep up with their Medicaid population’s needs. States that expanded their Medicaid programs under the Affordable Care Act would be especially hard hit if the Medicaid expansion is eliminated or reduced as part of ACA repeal.

States could address their funding shortfalls in ways that would harm seniors and their families, including:

  • Scaling back nursing home quality, service and safety protections.
  • Requiring patients' spouses, children or other family members to cover the cost of nursing home care, exhausting much or all of their savings. 
  • Tightening eligibility criteria for home and community-based services, resulting in more individuals moving into nursing homes.
  • Limiting the number of people served.

Discretionary Programs Affecting Older Americans

The President’s budget includes reductions in funding, and in some cases complete elimination of funding, for programs of great importance to older Americans.  The National Committee is opposed to provisions affecting programs administered by the Department of Health and Human Services’ Administration for Community Living that:

  • Reverse increases in the final Fiscal Year 2017 budget for Older Americans Act Supportive Services and Senior Centers, Congregate and Home-Delivered Nutrition Programs, and Elder Rights Support Activities;

  • Reduce funding for the National Family Caregiver Support Program and Chronic Disease Self-Management Education; and

  • Eliminate funding for the State Health Insurance Assistance Program (SHIP), which provides Medicare beneficiaries with access to the only program that provides free, personalized, unbiased counseling on the growing complexities of Medicare coverage.

The National Committee also opposes budget proposals that:

  • Eliminate the Older Americans Act Title V Senior Community Service Employment Program (SCSEP).  SCSEP funding for FY 2017 is $400 million.  Last year, the program provided job training to 70,000 low-income older adults.

  • Eliminate the Community Services Block Grant ($715 million), the Community Development Block Grant ($3 billion) and the Social Services Block Grant ($1.7 billion). Some Meals on Wheels programs rely on funding from these programs, in addition to OAA funding, to deliver nutritious meals to at-risk seniors. 

  • Eliminate funding for the Low-Income Home Energy Assistance Program (LIHEAP).  LIHEAP funding for FY 2017 is $3.39 billion.  Of the 6.8 million households that receive assistance with heating and cooling costs through LIHEAP each year, 2.26 million or one-third are age 60 or older.

  • Reduce funding for the National Institutes of Health (NIH) by $5.67 billion (including nearly $300 million for the National Institute on Aging), which will negatively impact research into cancer, Alzheimer’s, Parkinson’s and other diseases affecting older Americans.

  • Eliminate funding for the Senior Corps programs, including the Retired and Senior Volunteer Program, Foster Grandparents and Senior Companions.  Senior Corps funding for FY 2017 is $202.1 million.  These programs enable seniors to remain active and engaged in their communities, serving neighbors across the lifespan, and benefitting their own health in the process.  In 2016, 245,000 Senior Corps volunteers provided 74.6 million hours of service.

Government Relations and Policy, May 2017


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