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No Spring Break Ceasefire in the War on the Working Class

Congress may be home for Easter break and President Trump is busy dropping bombs in Syria and Afghanistan, but the War on the Working Class continues unabated.  In fact, it was quite a busy week for floating dangerous ideas about our nation’s healthcare and retirement security. 

First, the Associated Press ran a story based on information from an unnamed “GOP lobbyist” saying that Republicans are considering repealing the Social Security payroll tax.  Under this alleged plan, Social Security would be funded from general revenue and therefore subject to competition with other domestic programs --- and the whims of Congressional budget cutters.  Never mind that the payroll tax is what makes Social Security an earned benefit.  President Franklin D. Roosevelt set it up that way on purpose to “give the contributors a legal, moral and political right to collect” their Social Security checks.  Plus, the current payroll tax deduction has been working pretty well for the past 80 years.

Since enough members of Congress realize this is an awful proposal that would never pass the House and Senate, clearly someone is out there floating crazy ideas in the press.  (In addition, the A.P. story itself lacked any real sense of balance or context.) While the source for the A.P. story was unnamed, a top Trump administration official very publicly floated notions that seem to undermine President Trump’s promise not to touch Social Security and Medicare.  In an interview with CNBC’s John Harwood on Tuesday, Budget Director Mick Mulvaney just couldn't say whether President Trump would veto legislation to privatize Medicare.  “Let [Congress] pass that and let’s talk about it,” he demurred. 

When Harwood asked if Social Security Disability Insurance (SSDI) was on the list of potential programs to be cut, Mulvaney offered this non-reassuring response:

“I continue to look forward to talking to the president about ways to fix that program. Because that is one of the fastest growing programs that we have. It's become effectively a long-term unemployment, permanent unemployment program.” – Mick Mulvaney

Of course, that response is riddled with inaccuracies.  SSDI is not growing, it’s leveling off at a lower rate that is likely to plateau for the next 20 years.  It most definitely is not an unemployment program of any kind – permanent or otherwise. SSDI is one of the strictest federal disability programs in the world in terms of qualifying for benefits.  Only those who are able to demonstrate that they are unable to work for medical reasons qualify.  Among all the people who apply, only 40% are accepted.  If accepted, the average beneficiary receives only $1,170 per month, less than one could earn in a full time job at the federal minimum wage.

That didn’t stop the Washington Post from echoing some of the same right-wing myths about SSDI in a recent feature story and an editorial entitled, “The Social Security Disability Program Needs Reform.”  The story wrongly intimates that rural, working-class Americans are using SSDI as a unemployment program.  On Monday, Media Matters for America attempted to correct the record:

“The Post’s mischaracterization of SSDI follows a long history of misinformation from mainstream outlets, which often publish error-riddled stories filled with anecdotal evidence portraying disability recipients as undeserving. These pieces sound as if they come from right-wing media, which have spent years attacking the program and its recipients.” – Media Matters, 4/10/17

While the press was replete with nutty notions about Social Security and Medicare, the President and Congressional Republicans were reviving the specter of the moribund GOP healthcare bill.  Just when you thought it was dead, Freedom Caucus members say they are close to a deal with the White House and Speaker Ryan to repeal and replace Obamacare within three weeks.  Meanwhile, Politico reports that President Trump is threatening to cut off cost-sharing subsidies that help pay for low income earners’ health coverage in order to force Democrats to the negotiating table on the GOP health plan.

Fortunately, protesters are out in full force this week at town halls pushing back against supporters of the Republican bill, including one of the National Committee’s own grassroots volunteers who organized a rally outside a Florida congressman’s office.  This proves that Spring break is a good time for grassroots action. Just because it’s holiday time doesn’t mean those waging war against the working class won’t put some rotten eggs in our Easter baskets.

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Ryan's Revised Healthcare Bill Even Worse Than the Original

 


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: 

 

MEDICAID

 

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.

 

AGE RATING

 

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.

 

 

PREMIUM SUPPORT         

 

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.

 

TAX CUTS

 

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.

 

 

MEDICARE

 

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.

 

 

 

 

 

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CBO Report on GOP Health Plan: More Bad News For Older Americans

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.

MEDICAID

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.

MEDICARE

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.”

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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.

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Mulvaney Actively Subverting Trump’s Promises on Social Security and Medicare

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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Trump Snubs Seniors in Speech to Congress

Millions of current and future retirees were no doubt hoping that President Trump would use last night’s speech to Congress to reaffirm his promises not to touch Social Security and Medicare.  Instead, the President ducked and covered.  He did not even utter the words “Social Security” or “Medicare” in his entire hour-long address.  As for Medicaid – which millions of American seniors rely upon for skilled nursing care – the President only touched on it once, with a veiled reference to converting guaranteed benefits into block grants, which would hurt beneficiaries.   

This begs the question – why the silence on Social Security and Medicare?  After all, during the campaign the President broke with Republican orthodoxy and repeatedly promised not to cut either earned benefit program. “I am going to protect and save your Social Security and your Medicare.  You made a deal a long time ago,” he told a crowd of supporters in November.  The most likely explanation for omitting America’s retirement security programs from last night’s speech is that the President knows his fellow Republicans on Capitol Hill vehemently disagree with him.  

There are proposals in both the House and Senate to cut and privatize Social Security and Medicare.  In fact, voucherizing Medicare is one of Speaker Paul Ryan’s highest priorities.  Perhaps the President did not want to unnecessarily ruffle feathers on the Hill last night.  If so, his refusal to recommit to protecting Social Security and Medicare is not an encouraging sign. If he’s afraid to even mention his position in a speech to Congress, he may roll over on campaign promises under pressure from the Congressional GOP.

President Trump may also be leaving himself wiggle room in negotiations with Congress over Social Security and Medicare.  The problem is, any compromise on his promise will hurt seniors and people with disabilities who depend on these programs, whether it’s cutting benefits, raising the retirement age, or trimming COLAs.  He may also be setting up a dodge, where the Congress agrees not to cut Social Security or Medicare for current retirees while leaving open the possibility of downsizing or privatizing both programs for younger Americans.  This approach is based on the falsehood that cutting benefits for future retirees doesn’t hurt current seniors, and cynically pits one generation against the others for political expediency. Mark Miller of Reuters has an excellent piece today explaining this ploy:

"The [Republicans’] political goal will be to defang public opposition, since younger workers tend not to focus much on retirement when it is several decades away. But that approach is not going to work. Retirees and their advocacy groups will fiercely resist cutting benefits down the road, because they understand the critical importance of Social Security and Medicare benefits. They also care about the future retirement of their own children.  - Mark Miller, Reuters

Social Security and Medicare are commitments that the government made to working class Americans who paid into the system most of their lives.  The President could have confirmed that commitment last night and comforted seniors who are worried about losing their retirement security and healthcare.  His silence on Capitol Hill was not reassuring.

 

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