With every passing Democratic presidential debate, the odds that any of the moderators will ever ask a question about Social Security seem to be growing longer. Last night was the sixth debate of 2019, and the record remains unbroken: not a single question about Social Security for seven contenders for the nomination of the party of Franklin Roosevelt. However, two of the candidates – Bernie Sanders and Elizabeth Warren – did mention Social Security on their own, without being asked.
Early in the debate, Senator Sanders brought up Social Security as part of an attack on President Trump’s betraying his promise “not to touch” Americans’ earned benefits.
“I will personally be… making the case that we have a president who has sold out the working families of this country, who wants to cut Social Security, Medicare and Medicaid after he promised he would not do that…” – Bernie Sanders, Democratic presidential debate, 12/19/19
Both Sanders and Senator Warren have offered proposals to fortify Social Security’s finances and expand benefits – mainly by asking the wealthy to pay their fair share of FICA payroll contributions. During an exchange about candidate Andrew Yang’s universal basic income proposal (to give every American $1,000 per month), Warren defended the modest benefit bump in her Social Security plan:
“America is ready to expand Social Security payments and disability payments by $200 a month. You just give somebody $200 a month, they asked me this in a town hall. And a lady who wanted it said, you know what it will mean to me? It will mean I can get a prescription filled and I can still buy toilet paper the same week.” – Elizabeth Warren, Democratic presidential debate, 12/19/19
Social Security touches the lives of 69 million Americans, many of them seniors living on fixed incomes who rely on the average $1,400 monthly retirement benefit to stay out of poverty. Conservatives claim that Social Security is “going broke” and that it won’t be there for future generations. However, Social Security champions, including not only Warren and Sanders, but Rep. John Larson (D-CT) have lit up a pathway to long-term financial solvency AND expanded benefits, which voters deserve to know about.
We have pointed out many times in this space – and in other publications – that the mainstream media have failed to adequately cover these common sense, equitable solutions, relying on the false narrative that “neither party wants to take concrete action on Social Security.” To counter this narrative, the Democratic debates should include a robust discussion about seniors’ retirement benefits. A Democratic president created Social Security and it will be up to Democrats to protect the program – and allow it to grow with the needs of an ever-changing population.
While it’s laudable that Congress reached a 2020 spending deal in time to avert a government shutdown, the news wasn’t great for those who rely on the Social Security Administration (SSA), which basically means almost every American senior. Monday’s $1.4 trillion agreement – which does increase spending on other programs for older Americans – gives SSA only a small bump in its operating budget. The $99 million increase (less than 1%) over 2019 funding levels does not even keep pace with inflation, and perpetuates the decade-long divestment in crucial customer service functions for Social Security’s 69 million beneficiaries. The agency has been chronically underfunded at a time when 10,000 Americans turn 65 every day.
The divestment began at the start of this decade, coinciding with the Republican take-over of the House and the ascendancy of the Tea Party. Congress slashed SSA’s operating budget 11% (adjusted for inflation) between fiscal years 2010 and 2019. Left to fend for itself with a growing customer base and reduced resources, the SSA began closing field offices and furloughing employees. Customer service suffered and seniors – especially those of modest means – paid the price in the form of increased wait times to talk to an SSA representative and long delays in disability hearings during which thousands of claimants died before their appeals could be adjudicated.
As Mark Miller reported for Reuters last June:
“[Nearly one million] people were waiting for appeals hearings before administrative law judges on disability benefit applications in fiscal 2018. In the same year, the average wait time for callers to the Social Security toll-free number was 24 minutes, up from 13.6 minutes in fiscal 2016 – and 15% of callers received a busy signal. Social Security’s processing centers, which handle claims after beneficiaries are determined to be eligible, faced an enormous backlog of 2.9 million cases this year.” – Mark Miller, Reuters, 6/5/19
After years of cuts, Congress increased SSA’s operating budget by 2% for FY 2018. But the agency’s FY 2019 budget was cut by 2%, leaving SSA financially treading water. SSA’s former acting director, Nancy Berryhill, had requested a healthy $500 million increase for 2020. The Democratic-controlled House was poised to offer a $300 million (or roughly 3%) bump. Unfortunately, the Senate and President Trump sought a zero increase for SSA, producing a House-Senate compromise of only $99 million.
The main culprits are automatic caps that were imposed on discretionary federal spending beginning in 2011. Recent Congresses have adjusted those caps to allow more spending, but SSA’s budgets have continued to languish. This is especially egregious because SSA operations are funded by workers’ Social Security payroll contributions, and should not be lumped in with discretionary spending and subject to arbitrary caps and cuts. Seniors have earned their benefits and expect them to be administered with minimal time, trouble, and pain.
Earlier this year, a bipartisan three-person commission recommended exempting SSA’s operating budget from automatic spending caps. Meanwhile, Rep. John Larson’s Social Security 2100 Act would require that SSA’s administrative budget be fixed at 1.5% of total benefits paid. For 2020, that would translate to a $15 billion budget compared to the actual $11 billion just approved by Congress – or 36% more under Larson’s formula. That would go a long way toward restoring the level of customer service that beneficiaries truly need and expect.
Thursday was a historic day in the movement to lift the burden of crushing prescription drug prices. The U.S. House passed H.R. 3 – The Lower Drug Costs Now Act – which, among other things, empowers Medicare to negotiate prices directly with drug makers. H.R. 3 also delivers a sorely-needed, $2,000 annual cap on out-of-pocket drug costs for Medicare Part D beneficiaries. The bill then leverages the projected $456 billion in savings from lower drug prices to expand Medicare to include dental, vision, and hearing coverage – a long-sought goal of the National Committee and other seniors’ advocates. Lowering prescription prices is the objective of the National Committee’s Don’t Cut Pills, Cut Profits campaign.
“The U.S. House of Representatives resoundingly defied Big Pharma on Thursday by passing historic legislation to lower prescription drug prices for America’s seniors and their families. The Lower Drug Costs Now Act relieves two sources of financial pain inflicted on older Americans – soaring drug prices and unaffordable out-of-pocket expenses for the care of their eyes, ears, and teeth.” – Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare, 12/12/19
Under H.R. 3, the Department of Health and Human Services would be authorized to negotiate the prices of up to 50 prescription drugs every year, using the prices that other Western countries pay as a benchmark. Drug makers who refuse to negotiate within the bounds of the legislation would face significant financial penalties. The National Committee has fought for Medicare cost negotiation since the creation of the Part D drug benefit in 2003, believing that the government should harness the bargaining power of millions of Medicare beneficiaries to beat prices down.
The bill’s $2,000 out-of-pocket cap on Medicare Part D beneficiaries’ prescription drug costs represents a significant improvement over current law. Today, some one million Part D enrollees pay more than $3,200 in annual out-of-pocket costs. Roughly one quarter of American adults say they have had to leave prescriptions unfilled, ration pills, or forgo other necessities because of soaring out-of-pocket drug costs. At town halls held this fall, the National Committee has heard harrowing stories of seniors who couldn’t afford crucial medications for conditions including diabetes, heart disease, and cancer.
H.R. 3’s addition of dental, hearing, and vision coverage to traditional Medicare is excellent news for seniors who have had to foot the full cost of care for their eyes, ears, and teeth. Under the new legislation, Medicare would cover:
*50% of eligible dental care costs
*Hearing aids and care for severe hearing loss
*80% of eligible vision care costs (including eyeglasses and contact lenses)
While the passage of H.R. 3 demonstrates the Democrats’ commitment to lowering drug prices and expanding Medicare, its chances of being signed into law – in current form, at least – are slim. Republicans in the House and Senate have slammed the bill, calling it a “government takeover” of the prescription drug market, even though H.R. 3 would work within the existing market to bring prices into line with what other countries pay. And, as Democrats have pointed out, price negotiation is fundamental to a functional free market.
The Senate Finance Committee has approved a drug price reduction bill introduced by Senators Charles Grassley (R-IA) and Ron Wyden (D-OR), but majority leader Mitch McConnell has not indicated he will bring it to the Senate floor for a vote.
The Trump administration has signaled its support for the Grassley-Wyden bill, but President Trump has yet to make an outright endorsement – the kind which might compel the full Senate to vote on it. If Grassley-Wyden were to pass the Senate, a House-Senate conference would have to reconcile the differences between each chamber’s prescription drug pricing legislation.
Democrats will incorporate the passage of H.R. 3 into their 2020 campaign messaging, validating their promises to voters to cut skyrocketing drug costs and improve Americans’ health coverage. Meanwhile, seniors and their families can celebrate the House majority’s affirmation that they badly need relief from high drug prices – and look forward to a time when the provisions in H.R. 3 can finally become law.
The 2020 Medicare open enrollment has ended — and it has not been the program’s finest hour. The Trump administration’s new online enrollment tools have been rightly criticized as inaccurate, misleading, and sometimes downright biased toward private plans.
A few days before open enrollment deadline of December 7th, the Centers for Medicare and Medicaid Services indicated that, because its online tools are riddled with errors, beneficiaries may be able to change their plans during a “special enrollment period” after the normal deadline.
“Saturday is the deadline for most people with Medicare coverage to sign up for private drug and medical plans for next year. But advocates worry that enrollment decisions based on bad information from the government’s revamped, error-prone Plan Finder website will bring unwelcome surprises.” – Kaiser Health News, 12/5/19
Advocates, including the National Committee, have criticized the administration’s newly revamped Plan Finder for misleading information about pricing and plans – and a continued “tilting of the playing field” toward private Medicare Advantage plans over traditional Medicare for ideological, rather than practical, reasons.
Last week, our president and CEO, Max Richtman, penned an opinion piece in Marketwatch calling the administration to account on this issue.
“Traditionally, Medicare enrollment materials have been neutral regarding the two basic types of coverage. But starting in 2018, advocates noticed that the public outreach seemed to steer enrollees toward Medicare Advantage by overemphasizing the positives of private plans while downplaying the negatives, and limiting — or outright omitting — references to traditional Medicare.” – Max Richtman, National Committee president and CEO, Marketwatch, 11/29/19
While enrollees await specifics as to what kind of changes they may be able to make to their chosen plans after open enrollment ends, the administration says it is continuing to “improve” the Plan Finder. But, as Kaiser Health News points out, many beneficiaries may not even realize that they signed up for the wrong plans until their coverage begins next year.
Read Max Richtman’s full Marketwatch article on bias in the Trump administration’s Medicare enrollment tools here.
Historic legislation to reduce prescription drug prices will come up for a vote in the U.S. House next week. Speaker Nancy Pelosi announced today that the Elijah E. Cummings Lower Drug Costs Now Act will reach the House floor as early as Tuesday. The bill, otherwise known as H.R. 3, would empower the Secretary of Health and Human Services to negotiate lower drug prices with Big Pharma on behalf of the millions of Americans in the Medicare program. The legislation represents the biggest change to Medicare since its inception in 1965.
“We are going to give Medicare the power to negotiate lower drug prices, and make those prices available to Americans with private insurance as well as Medicare beneficiaries. American seniors and families shouldn’t have to pay more for their medicines than what Big Pharma charges in other countries for the same drugs.” – Speaker Nancy Pelosi, 12/5/19
Through its “Don’t Cut Pills, Cut Profits” campaign, the National Committee has been fighting to lower drug prices, which have become a crushing financial burden for retirees living on fixed incomes – and working Americans at large. Soaring prescription prices contribute to Americans’ health insecurity, help drive the middle and working classes into medical bankruptcy, and compel them to forgo necessary medications.
An analysis by AARP last August revealed that nearly a third of pre-Medicare age adults are rationing pills, skipping doses, or simply not filling necessary prescriptions due to skyrocketing costs. Eight in ten Americans say drug prices are too high, with a majority blaming pharmaceutical company profits for unaffordable medications. A 2019 Kaiser Family Foundation study found that more than 80% of Americans (across party lines) favor aggressive government intervention to lower prices. Eight-six percent of those surveyed supported allowing Medicare to negotiate directly with drug makers – the very centerpiece of H.R. 3.
The bill includes:
A $2,000 cap on seniors’ Medicare out-of-pocket costs for prescription drug spending
A mechanism for the Medicare program to negotiate drug prices with manufacturers with a strong enforcement penalty to compel manufacturers to offer fair prices
An inflation cap on drug reimbursement to curb excessive and unwarranted drug price escalation
The House is expected to pass H.R. 3. On the Senate side, a bipartisan bill to reduce drug prices introduced by Senators Ron Wyden (D-OR) and Charles Grassley (R-IA) has been passed out of committee. The Grassley-Wyden bill – which is undergoing changes to win wider support in the Senate – contains provisions similar to those in H.R 3, but does not include Medicare price negotiation.
It’s uncertain whether Grassley-Wyden will reach the Senate floor. If the bill does pass by the Senate, a conference committee would have to reconcile the differences between Grassley-Wyden and the House legislation. One thing is certain: bipartisan majorities of Americans expect their elected leaders to take forceful action to relieve the pain of high drug prices, and will be rightfully angry if they don’t.
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