President Trump will be in Florida Thursday, touting a new executive order entitled, “Protecting Medicare from Socialist Destruction.” Though the president enjoys some support among the residents of the Villages retirement community where he will unveil the order, most seniors will wisely say, “Thanks, but no thanks.”
We’ll deal with the ‘Socialist Destruction’ canard a little later. But first… why would America’s seniors entrust their Medicare coverage to a president whose administration has worked so hard to undermine it since the day he took office? Expecting Trump to protect Medicare is like trusting former House Speaker Paul Ryan to protect Medicaid.
Despite candidate Trump’s promising older people “not to touch” their earned benefits, the president has proposed to slash Medicare by $846 billion over ten years, which would accelerate the insolvency of the Medicare trust fund. So far, Congress has rejected these cuts, but if the President wins re-election, all bets are off.
“Republicans want Trump to deal with the exploding deficit by gutting the social safety net, and the president is reportedly receptive to the idea… President Trump has told friends that gutting Medicare could be a fun ‘second-term project.’” – Vanity Fair, 8/22/19
And that’s only the beginning.
Medicare Advantage Bias
Bloomberg reports that the President will use his Florida appearance to promote private Medicare Advantage (MA) plans. This would be consistent with the administration’s unabashed advocacy for Medicare Advantage over traditional Medicare.
“From day one, President Trump and his administration have worked to provide seniors with high-quality, affordable care in the Medicare program and improved options through Medicare Advantage.” – White House spokesperson Judd Deere
But it isn’t the President’s job to shill for private plans while ignoring publicly-run traditional Medicare, which has provided seniors with quality health coverage for more than 50 years. Medicare remains one of the most efficient health insurers in the nation, consistently spending less per patient than private insurance providers.
While Medicare Advantage may be a viable option for healthier seniors, it constricts patients’ choices of doctors and may not cover medical expenses incurred while traveling. A healthy senior might not worry about the limited network of medical providers in Medicare Advantage, but a patient diagnosed with a chronic or serious condition like diabetes, heart disease, or cancer may find that her preferred specialists are not part of her private MA insurer’s system. If that patient switches to traditional Medicare, she may not be able to acquire a supplemental Medigap policy to cover copays and deductibles.
Meanwhile, Medicare Advantage plans are currently under fire from watchdog groups for overcharging for health care services, to the tune of billions of dollars.
“Officials have known for years that some Medicare Advantage plans overbill the government by exaggerating how sick their patients are or by charging Medicare for treating serious medical conditions they cannot prove their patients have… Officials with the Centers for Medicare & Medicaid Services repeatedly have postponed or backed off efforts to crack down on billing abuses and mistakes.” – National Public Radio, 7/16/19
As we begin another open enrollment season, the Centers for Medicare and Medicaid Services’ (CMS) online tools once again may be skewed toward Medicare Advantage. That flies in the face of CMS claims that its goal is to be “a trusted and neutral resource for Medicare beneficiaries.” As David Lipschutz of the Center for Medicare Advocacy noted:
“Unfortunately, CMS materials since the Fall of 2017 have not maintained such neutrality. Rather than presenting differences between traditional Medicare and private MA plans in an unbiased manner, CMS material has overplayed the pluses of MA and downplayed minuses in a manner that is highly misleading, at best.” – Center for Medicare Advocacy, 8/8/19
Debunking “Socialist Destruction”
Through word and deed, President Trump has betrayed his campaign promise to protect Medicare. But in Florida it appears that the president, with his talk of “Socialist Destruction,” will take this effort to undermine the program to new Orwellian lows. In fact, Medicare has deep roots in American social policy dating to the early 20th century, an evolving belief that workers needed insurance against inevitable economic hardships – including sickness, disability, retirement, and loss of employment.
Before Medicare was enacted in 1965, conservatives including Ronald Reagan predicted that if the seniors’ health care program became law, Americans would one day find themselves “telling our children and our children’s children what it once was like in America when men were free.”
But President Lyndon B. Johnson, who signed Medicare into law, had it right when he said that Medicare “is the American way. It is practical. It is sensible. It is fair. It is just.”
Fifty-four years later, there’s no doubt that Medicare needs improvements. Democrats in Congress have proposed legislation to add dental, hearing, and vision coverage to traditional Medicare. Speaker Pelosi has championed a bill to allow Medicare to negotiate prescription drug prices with Big Pharma, which could save patients and taxpayers billions of dollars per year. The Affordable Care Act – which President Trump tried mightily to repeal and continues to undermine – extended Medicare’s solvency and provided beneficiaries with annual wellness screenings at no out-of-pocket cost to the patient.
The Trump administration and powerful special interests may want to see Medicare cut and privatized, but the public is solidly behind the program. Polling indicates that majorities of voters across party lines oppose Medicare benefit cuts – including raising the eligibility age to 67 – and do not want to see the program privatized. The president can go Florida, pose as a champion for seniors’ health care, and rant about “Socialist Destruction,” but seniors know that the Trump administration and its allies in Congress constitute the most fundamental threat to Medicare today.
National Committee president and CEO Max Richtman sent the following letter to the editor of the Wall Street Journal in response to an article, “Social Security Expansion Under Consideration Would Boost Payroll Taxes” (9/11/19):
The Journal article on Rep. John Larson’s legislation to strengthen Social Security benefits is lacking some crucial context.
Social Security payroll taxes have been raised multiple times since the program’s creation in 1935. Rep. Larson’s proposed 1.2% increase in employee contributions over 24 years would be one of the smallest payroll tax adjustments in Social Security’s history. And, as Rep. Larson reminds us, for what other “tax” do workers receive retirement, disability, spousal, and survivor insurance?
The alternative to Rep. Larson’s approach, espoused by many conservatives, is to cut benefits. But public opinion is squarely on Rep. Larson’s side. In a recent Pew Research poll, nearly 75% of adults oppose any reductions in benefits, including majorities of Republicans and Democrats.
American workers realize that with pensions vanishing, saving for retirement becoming increasingly difficult, and seniors’ living expenses soaring, they will depend on every penny of their Social Security benefits to stay financially afloat in old age.
No sooner had Nancy Pelosi unveiled legislation to lower prescription drug prices, than House Republicans rejected it on the usual grounds. According to GOP orthodoxy, any attempt by the government to rein-in runaway prescription prices amounts to “interfering” with the “free market.” To the extent that the pharmaceutical market honestly can be called “free” (given the industry’s patent monopolies and suppression of cheaper, generic medications), it has failed spectacularly to provide affordable prescription drugs to consumers, including seniors on fixed incomes.
Kaiser reports that Republicans object to three main provisions of the Democratic leadership’s bill, namely that it would:
* Allow Medicare to negotiate drug prices with pharmaceutical companies
* Link U.S. drug prices to the lower prices paid overseas.
* Limit how fast drug companies can raise their prices.
Though Pelosi’s bill incorporates parts of Republican proposals to lower drug cost – and adopts one of President Trump’s favorite fixes (pegging prices to what other countries pay) – ranking House Ways and Means Committee member Kevin Brady (R-TX) described it in sinister terms:
“(Speaker Pelosi’s bill is) more accurately a ‘dictate or destroy’ price control power that will halt valuable research into new lifesaving medicines and give foreign countries dangerous influence over America’s health care system.” – Rep. Kevin Brady (R-TX), ranking member of House Ways & Means Committee
Is Rep. Brady speaking of “dangerous” countries like Germany, which pays 33% less than Americans do for drugs… or the United Kingdom (50% less)… or Sweden, where prescriptions cost 65% less than in the U.S.A.?
The Democrats are on target here. The Speaker’s legislation does not aim to destroy the free market, but rather to curb its gross excesses. Big Pharma has been steadily raising drug prices during the past two decades, in the absence of any real price controls. Meanwhile, the industry’s profits have soared, as has CEO compensation. The industry spends billions on lobbying and marketing – more than $6 billion for ads alone in 2018. That’s great for Big Pharma and its shareholders, but bad for consumers, especially seniors who are forced to ration pills or choose between vital medications and other essentials like groceries and rent. It also adds to Medicare’s costs, which accrue to the taxpayers.
Republican objections to commonsense regulation of drug prices starts to break down where the wallet meets the cash register, so to speak. Prescription medications are not just another consumer good like watches and cars. They are essential to Americans’ health – and often make the difference between life and death. “Pharmaceutical companies are putting profits first, and the public good second,” says Dan Adcock, the National Committee’s director of Government Relations and Policy.
Adcock recalls that a pharmaceutical industry lobbyist at a health care reform gathering a few years ago was heard to say, “If people can’t afford prescription drugs, they should get loans.” That attitude may or may not be indicative of the industry’s as a whole, but if Big Pharma insists on raising prices well beyond what most Americans can afford, and if seniors are forgoing necessary medications because of increasing costs, it is time for the federal government to step in and restore some fairness to the prescription drug market.
By Max Richtman, President & CEO of the National Committee to Preserve Social Security and Medicare
Given Social Security’s importance to all Americans, you can imagine my surprise that none of the moderators in the first two rounds of Democratic debates asked a single question about it. Our nation faces a retirement crisis, with savings rates plummeting, pensions vanishing, and expenses in old-age soaring. 63 million Americans rely on Social Security today for basic financial stability, yet conservatives propose to cut future benefits. The father of Social Security is one of the most revered Democratic presidents. And yet not a single mention of the program during the first two sets of primary debates by the party of Franklin Roosevelt?
Many in the news media have bought into the narrative that “no one in Washington wants to talk about Social Security” because it is a politically sensitive issue. Maybe that’s one reason why they don’t ask the question during debates. This narrative holds that neither party is willing to address Social Security’s long-term future. Nothing could be farther from the truth. Democrats in Congress, including Representative John Larson (D-Conn.) and Senator Bernie Sanders (I-Vt.), have introduced legislation that maintains the program’s financial health for as long as most of us on earth today are likely to be alive. They achieve this mainly by insisting that the wealthy pay their fair share of Social Security payroll taxes. Congressman Larson’s bill, which has 210 cosponsors in the House, also expands benefits – and both bills provide for a more accurate and generous cost of living adjustment formula.
After the first round of debates on MSNBC in June, I sent a letter to the moderators of the next debates on CNN (held at the end of July), imploring them to raise the topic of Social Security. I even suggested a question they could ask:
“Social Security will experience a funding shortfall in 2035 when the Trust Funds are scheduled to run out, triggering an automatic 20% benefit cut for all recipients. As President, will you put forward a proposal to extend the program’s solvency and, if so, will you choose to do this using benefit cuts or revenue increases?”
But when I tuned into the CNN debates on July 30 and 31st, the issue of Social Security never came up during some 240 minutes of back-and-forth between the candidates. The moderators had clearly not heeded calls for a question on this vital program.
This is an ironic omission, since the Democratic candidates talk quite frequently about Social Security on the campaign trail. Joe Biden told a seniors’ forum in Iowa that “we should be increasing, not decreasing, Social Security.” Senator Elizabeth Warren has railed against Social Security cuts and privatization. Bernie Sanders introduced the aforementioned Social Security Expansion Act in the U.S. Senate. Beto O’Rourke, Kamala Harris, Pete Buttigieg and Corey Booker have all emphasized the need to boost and strengthen the program.
Voters shouldn’t have to do a Google search to see where the candidates stand on an issue that can make the difference between financial stability and outright poverty in old age. We deserve to hear the contenders’ positions on Social Security on the debate stage. After all, the eventual nominee will face a president in the general election who won in 2016 partly by promising to “protect your Social Security.”
Of course, since taking office, President Trump has done nothing to keep that promise. In fact, his last two budget blueprints have included billions of dollars in cuts to Social Security Disability Insurance, which his budget chief, Mick Mulvaney, insists is “not really part” of Social Security. Meanwhile, many so-called “entitlement reformers” in the president’s party have been insisting that Social Security “reforms” should cover the cost of the Trump/GOP tax cuts of 2017, which are swelling federal red ink (even though Social Security is self-funded and does not contribute to the federal debt). Senator Joni Ernst (R-IA) made headlines this month by proposing that the two parties get together “behind closed doors” to fix Social Security. We all know what that means.
Americans need precisely the opposite: for Social Security to be discussed in the sunlight – especially on the debate stage – so that the voters can assess the candidates’ proposals, and gauge their commitment to the cause. Are they just paying lip service to it, or are they serious about standing up to the “entitlement reformers” and boosting the program America’s for current and future seniors? I have just sent a letter to the moderators of tonight’s ABC News debate, urging them to ask at least one question about Social Security. Let’s hope the third time will be the charm.
When Congress returns from summer recess on Monday, lawmakers will have plenty on their plates, especially the vexing issue of high prescription drug prices. Hill-watchers expect action on legislation from both parties which aim to reduce prices at the pharmacy counter, though there is scant consensus on specific policies. Most Congressional Democrats believe (and the National Committee agrees) that the Department of Health and Human Services must be allowed to negotiate drug prices with pharmaceutical companies on behalf of Medicare.
As Politico reported this week, the Democratic caucus awaits the release of Speaker Nancy Pelosi’s prescription for lowering drug prices:
“[The Speaker’s proposal] has been wrung through multiple closed-door negotiations with progressives to work out how many drugs the government could negotiate prices on and what penalties would be in store for defiant manufacturers. But divisions remain.” – Politico
Those divisions center around the question of what happens if Big Pharma refuses to negotiate drug prices in good faith. Pelosi’s bill is expected to call for binding arbitration if HHS and drug-makers reach an impasse; Progressive Democrats want to empower HHS to allow the licensing of generic versions of medications for which Big Pharma won’t negotiate fair prices. In fact, that’s exactly what a bill introduced by Rep. Lloyd Doggett (D-TX) would achieve.
“The National Committee endorses Congressman Doggett’s bill,” says Dan Adcock, NCPSSM’s Director of Government Relations and Policy, “But we’d support a bill from Democratic leadership that allows Medicare to negotiate drug prices, even if it doesn’t go as far as Rep. Doggett’s.”
Soon we will see whether leadership and Progressive Democrats can bridge their differences:
“Progressives warned Pelosi in a letter that locking them out of plans could turn them against the bill. On their wish list: permitting direct negotiation for all drugs and setting harsh penalties for manufacturers that refuse to cooperate.” – Politico
On the Senate side, the bipartisan Prescription Drug Pricing Reduction Act (PDPRA), introduced by Sens. Charles Grassley (R-IA) and Ron Wyden (D-OR), faces an uncertain future. The bill would cap Medicare beneficiaries’ out of pocket prescription drug costs at $3,100 – and penalize pharmaceutical companies for raising drug prices beyond the rate of inflation. Under the PDPRA, Medicare beneficiaries would save $27 billion in out-of-pocket costs over ten years.
The National Committee has endorsed the Grassley-Wyden bill, but Majority Leader Mitch McConnell has already expressed his opposition to the legislation and is unlikely to allow a floor vote.
“The question is: Who’s side is [McConnell] on? The side of the pharmaceutical lobby or is he on the side of patients and taxpayers?” – Sen. Ron Wyden (D-OR)
Seniors, in particular, need relief from soaring prescription drug prices. A recent AARP study found that older Americans with cancer, diabetes, and heart disease have experienced 100-200% price increases for common medications.
“When senior citizens are living on an average benefit of $26,000 of income annually and (they’re) facing a 200 percent increase in the cost of… medication – it’s time for action.” – Elaine Ryan, AARP vice president for state advocacy