Wednesday, December 19, 2007

Medicare's Night Before Christmas

by Alison Bonebrake, NCPSSM Policy Analyst


'Twas the night before Christmas, yet the Senate and the House
Have yet to fix Medicare due to a political louse.

Seniors were hoping that government would care,
That insurance industry subsidies made their premiums flare.

Those in traditional Medicare couldn’t get it through their head,
why they had to pay subsidies that were so widespread;

Those in private plans felt completely entrapped,
with high out of pocket costs and benefits severely capped,

Seniors wanted Congress to resolve this matter,
and prevent insurance company profits from getting even fatter.

But insurance industry lobbyists began doling out cash,
to preserve the subsidies they’ve collected en masse.

Negotiations received a deadly blow,
When Bush said MA savings are a no-no.

He threatened to veto legislation this year,
that reduced subsides the insurance industry held dear.

Without MA savings, the bill was pared down quick,
And Medicare improvements were no longer a policy pick.

All-in-all the Medicare bill looked pretty lame;
In fact, it was really more of the same.

No preventive, no mental health, no low-income protections!
Only future growth in insurer subsidy projections!

Seniors were astounded, they couldn’t believe the gall,
Bush’s allies in Congress didn’t eliminate subsidies, or reduce them at all!

They passed a short-term doc fix that was incredibly shy
of achieving the priorities the House laid out in July.

The one thing that seniors know is true
is their monthly premiums will increase in dollars of two.

They are charged more to fund MA plans, and if you need proof
The Medicare Modernization Act engorged this illogical goof.


MA subsidies give all taxpayers a reason to frown,
and the 150 billion dollar price tag is sure to confound.

The Medicare HI trust fund is also asked to foot,
the bill for these subsidies which are so hard put.

Subsidies place the trust fund further under attack,
It loses two years of solvency unless they are rolled back.

The unfairness of the situation made seniors anything but merry!
How could Congress pass a bill with public opinion so contrary?

Despite receiving subsidies, didn’t Congress know,
MA plans offered inferior coverage for services seniors couldn’t forgo?

Sure they might give you glasses or even some new teeth,
But hospital stays are costly and other tricks lurk underneath.

Their marketing handbooks must have been written by Machiavelli,
Because sales tactics can be unethical, illegal and just plain smelly.

Unfortunately for seniors, this year no Angel or Christmas elf,
will correct the situation since the issue has been shelved.

As they pay rising premiums with a bit of dread,
they look forward to 2008 and the election ahead.

Politicians who do not address this overpayment quirk,
may very well find themselves in 2009 out of work.

Perhaps the holiday season can convince our foes,
that traditional Medicare is not something they should oppose.

We should preserve social insurance, not arrange for its dismissal,
as we’ve discovered private plans are as thorny as a thistle.

As we approach the holiday, Medicare beneficiaries unite to say
"Happy Christmas to all, and next year we’ll win the fight."

Social Security COLA’S Can’t Keep Up

Seniors nationwide are watching their Social Security checks shrink before their eyes ...

as rising premiums for healthcare and drug coverage eat away more and more of their limited monthly income. And each year it’s getting worse.

Skyrocketing healthcare costs are triggering rising Medicare premiums that reduce the amount of money left in seniors’ Social Security checks each month. In fact, the average retiree will lose 25% of their Social Security COLA in 2008 due to higher Medicare premiums. Many seniors enrolled in more expensive prescription drug plans will see even larger reductions in their COLA. Those with lower incomes (and smaller Social Security benefits) can lose their entire COLA due to the rising health care costs reflected in the Medicare premiums.

It’s easy to see why seniors’ Social Security cost of living adjustments (COLAs) are shrinking away at such a fast pace. That’s why we’re especially pleased to see new legislation introduced this week to limit the bite premiums can take from retirees’ monthly Social Security check. The “Social Security COLA Protection Act of 2007” would guarantee that no more than 25% of a retiree’s annual COLA could be taken by the combined increases in Part B and Part D Medicare premiums. Senator Tim Johnson (D-SD) and Rep. Stephanie Herseth Sandlin (D-SD) are the bill’s sponsors.

Tuesday, December 18, 2007

Medicare Bill is a Disappointment

by Barbara B. Kennelly, President/CEO

"The debate over Medicare legislation has been a true disappointment to millions of seniors tired of paying more in premiums so that insurers offering private Medicare Advantage plans can keep their billions in government subsidies. While everyone in Washington talks about fiscal discipline, the President’s veto threat with support from his allies in Congress, shows the influence of the insurance lobby once again ruled the day.

This legislation offers only a band-aid fix to the doctor’s fee cut and clearly puts insurers’ profits ahead of Medicare’s solvency and seniors’ needs. The National Committee will continue to work with House and Senate members next year on legislation to eliminate these outrageous and wasteful subsidies to Medicare Advantage insurers, strengthen aid for low income beneficiaries and improve Medicare’s long-term solvency.”

Social Security and Medicare Did Not Cause The Deficit

The Treasury Department and the Office of Management and Budget have released their FY 2007 US Financial Report. This report shows that by using the same accounting methods as private companies, the federal budget deficit is actually 69% higher than the administration reported two months ago, putting the deficit at $275.5 billion for this fiscal year. The Bush administration will proudly tell you that this is 38% less than last year’s deficit. But who would’ve thought seven years ago we would be expected to celebrate a $275.5. billion dollar deficit?

Rather than focusing on the tax and spend policies which created this deficit, this report touts the “healthy economy” and continues to issue more dire warnings of an “oncoming fiscal train wreck” of entitlement spending.

Let’s be clear here, entitlement costs did not create our current budget deficit. The challenges facing each of these programs are different and they’ll require unique solutions, yet the Bush administration continues to lump Social Security, Medicare and Medicaid together in an attempt to persuade older Americans and their families to foot the bill for this administration’s irresponsible budget policies. The long-term challenges facing Social Security are modest and manageable and should be addressed -- but there is no need to buy into this “crisis” campaign designed to persuade Americans this program must be eviscerated in order to be fixed.

Medicare, on the other hand, faces a shortfall in 2019 in large part because it suffers from the same skyrocketing healthcare costs Americans are seeing nationwide. We can’t continue to ignore national health care reform if we want to control federal spending. Yet the administration’s supporters continue to ignore the real issues in favor of their rhetoric designed to erode Americans’ deep faith in social insurance programs.

Americans want fiscal discipline returned to Washington; however, the challenges facing Medicare and Social Security are different. A one-size-fits-all ‘let’s cut entitlements’ approach won’t work no matter how hard the Bush administration tries to sell it.

Friday, December 14, 2007

Forgotten in the Medicare Debate

More than 10 million Medicare beneficiaries live at or near the poverty line but it’s been hard to get much attention for reforms that could ease their burden.

House and Senate conferees appear bogged down in negotiations of a Medicare reform bill. Of course, the focus of Congressional wrangling so far has been on cuts to wasteful subsidies to private Medicare Advantage insurers and a fix to prevent a 10% pay cut to Medicare physicians, which is scheduled for the New Year.

Now, Senators Jeff Bingaman (D-NM) and Olympia Snowe (R-ME) are sending a letter to Medicare negotiators, signed by more than 30 of their Senate colleagues, urging them to support reforms in three other areas:

· Increase the asset allowance for the Part D low income subsidy so that those with very limited incomes, but modest retirement savings, can obtain the assistance the Medicare Modernization Act was intended to deliver in paying premiums and coinsurance under the drug benefit

· Update the income and asset allowances for the Medicare Savings Programs, and provide continuing inflationary adjustment for those limits. Today many fail to receive needed assistance due to an asset test which has been unchanged for two decades

· Improve outreach and enrollment in both programs

Here’s more information on the Medicare Savings Program and the Low-Income Subsidy.

Thursday, December 13, 2007

Social Security Can Afford the Boomers

Yes, you read that correctly. Unfortunately, it’s a statement that is less likely to be included in any news coverage thanks to a 7-year propaganda campaign created to convince Americans that “Social Security won’t be there when today’s younger workers retire...baby boomers will bankrupt the system and you can make more money if you trade your Social Security for a Wall Street account.”

These myths are simplistic and wrong. The facts, unfortunately, are more complicated to understand. Maybe that’s why the mainstream media has bought the Social Security “crisis” claims so easily and completely? Until lately, that is.

The Dallas Morning News has among the most comprehensive articles we’ve seen in months describing the truth of Social Security. Bob Moos talked to a broad range of economists, actuaries, and advocates. He also summarizes the Presidential candidates’ positions. It’s definitely worth a read.






Tuesday, December 11, 2007

Thank You...Thank You Very Much

The Association of Marketing & Communications Professionals has honored the National Committee’s website and blog for outstanding achievement among public service and charitable organizations. “Entitled to Know” received MarCom’s Gold Award and the redesigned website received an Honorable Mention.

As baby-boomers age and an increasing number of older Americans turn to the internet for their news and information, the need for thorough and thoughtful analysis on issues affecting seniors is also growing.

That’s why, as the nation’s leading advocate for strengthening Social Security and Medicare for future generations, the National Committee launched it’s blog “Entitled to Know” earlier in 2007 to positive reviews from senior bloggers:

“I write about these issues frequently, but I can’t keep up as thoroughly and with as much detail as the people who write for this blog. I urge you to bookmark “entitled to know”. It’s important stuff you need to know”...Ronni Bennett, Time Goes By
The National Committee’s website also continues its tradition of providing detailed briefing papers, policy analysis, and advocacy tools to help seniors understand the issues and communicate their positions directly to their elected leaders on Capitol Hill. The Wall Street Journal has recognized the National Committee’s “Ask Mary Jane” advice column as “the best source of help for questions about Social Security”.

Thursday, December 6, 2007

“I Thought Medicare was For Seniors”

by Max Richtman, NCPSSM Executive Vice President

That simple sentiment sums up my trip to Iowa this week perfectly. I met with National Committee members and supporters who are organizing for the Iowa Presidential Caucuses,which are just a month away. We have more than 38-thousand supporters in Iowa and these seniors want to be sure that the Presidential candidates don’t ignore issues critical to retirees and their families.

We talked about so many different issues of concern to seniors including, the continuing preoccupation by some in Washington with privatizing Social Security and the inadequacy of the Medicare drug benefit. But nothing raised the hackles of this group of National Committee activists as much as our discussion about the Medicare Advantage Program or, as one participant characterized it, the Medicare Disadvantage Program.

They resent the fact that all Medicare beneficiaries, including the 81% of beneficiaries who have not signed up for Medicare Advantage, are paying more in premiums ($2 per month) to help finance this outrageous subsidy of the insurance companies selling Medicare Advantage Plans.

They were outraged that $149 billion dollars will be spent, or more accurately wasted, over the next 10 years on government subsidies to these plans while so many health care needs of seniors go unmet – supposedly due to lack of money in the Medicare budget.

The participant who said, “I thought Medicare was for seniors – not the insurance industry”, summed up the tone of our meeting perfectly. The Medicare law passed nearly 4 years ago had a different set of priorities and forgot that Medicare is for seniors. The National Committee is doing every thing we can to change this and is urging the Congress to eliminate this wasteful spending on subsides to the insurance companies.

It is time to get our priorities in order. It is time to devote theses precious resources to those in need -- not those motivated by greed.

Wednesday, December 5, 2007

So Much for Fighting Waste

The huge irony of watching President Bush accuse Congress of “wasteful Washington spending” while at the same time threatening to veto a Medicare bill which could trim billion dollar subsidies to the insurance industry might make us chuckle...if only it weren’t so harmful to seniors.

According to Congressional Quarterly today:

“One of the key demands (by the administration) is that the legislation use only cuts to Medicare providers,like hospitals or nursing homes, to pay for one of the bill’s most expensive provisions,instead of using money that currently goes to health insurance companies paid to run private Medicare plans, known as Medicare Advantage.”

In other words, this administration says it’s O.K. to cut providers directly serving vulnerable seniors but don’t even consider touching a penny of the estimated $149 billion in overpayments currently going to insurance companies. Overpayments that also cut two years from Medicare’s solvency, by the way.

Let’s be clear about this, these overpayments are subsidies above and beyond what is needed to provide coverage currently being offered in traditional Medicare. In fact, the government pays an average of 12 percent more to cover a beneficiary in a private Medicare Advantage plan than it would cost to cover that same beneficiary in traditional Medicare. All of this, while the insurance industry reaps record profits thanks to this new Medicare market created by the 2003 Medicare Modernization Act.

Once again, this administration’s priorities are clear. Protect insurers above all else. Clearly “wasteful government spending” doesn’t apply to government giveaways to political friends and allies in the insurance industry.

$2 Here, $2 There...Seniors Are Tired of Footing the Bill

Throughout the year, seniors nationwide have been urging Congress to reform the Medicare Advantage program. National Committee members have mailed about 73,000 letters to Capitol Hill on this issue and have now delivered 48,000 petitions to the Senate. It appears the Senate Finance committee is finally ready to consider its Medicare legislation, and a mark-up is scheduled for any day now.

Seniors from the National Committee and the Alliance for Retired Americans delivered the latest batch of Medicare reform petitions to the Senate on Tuesday. You can link to video of the event here. Beneficiaries also waved $2 bills symbolizing the extra money they pay each month in Medicare premiums, whether they’ve signed up for Medicare Advantage or not, to fund these industry subsidies.

Sadie Coleman is a Medicare beneficiary with 10 children, 46 grandchildren and 2 great-grandchildren. She told the Capitol Hill crowd she stayed with traditional Medicare because, like many other seniors, she’s found private insurers in Medicare Advantage “tell you one thing, then they do another”.

Seniors like Sadie want private plans to compete on a level playing field with Medicare. Private insurers have promised they can provide better Medicare coverage for less...reforms to Medicare Advantage let’s them prove it.

Thursday, November 29, 2007

New Report Finds Drug Plan Premiums Up Almost 25%

A new issue brief from the Center for Economic and Policy Research confirms the bad news that seniors who get their prescriptions under Part D already feared...their costs for drugs are skyrocketing.

According to "Changes in the Costs of Medicare Prescription Drug Plans, 2007-2008" , the average Part D premium will rise by 24.5 percent from 2007-08 meaning an average premium price of $293 per year, or $57.70 more than last year.

The report also finds that an average of 20% of the private plans offering doughnut hole coverage last year are dropping that coverage in 2008...leaving more seniors vulnerable to huge out-of-pocket costs. Combine all of this with increases in co-pays, ever-changing formularies, and pricing tiers and it’s easy to understand why seniors find the Part D morass so hard to navigate.

And without fundamental reforms to the prescription drug program, these problems will only get worse over time.

Wow...

What a difference a week makes! There has been more discussion and debate about this administration’s phony Social Security crisis in the past 9 days than we’ve seen since 2005.

Thank goodness.

We’ve been talking about it for years (although it felt more like a monologue sometimes than a dialogue) including most recently here, here and here. Dean Baker at the Center for Economic and Policy Research has also written many good pieces on the administration’s phony “entitlement crisis” propaganda.

Even so, the Washington Post continues its Social Security obsession. As we sat down to write another composite of this week’s debate we found this wonderful post at The Economist’s View which sums it all up wonderfully.

Tuesday, November 20, 2007

More of the Same

And in the same vein, Presidential candidate Fred Thompson has been winning praise from the media for “doing something” on Social Security. Doesn’t anyone care about what his plan actually does?

Here are some of the basics of Thompson’s Social Security proposal:

· Divert money out of Social Security and into private accounts.
· Make huge cuts in Social Security benefits.
· Increase the public debt by billions of dollars.
· Shift risk to individual retirees.

Thompson’s plan would even go beyond the President’s failed Social Security proposal by:

· Making larger reductions in Social Security benefits by completely indexing benefits to prices rather than using a combination of wages and prices
· Raise the Social Security retirement age for those with private accounts, effectively reducing their Social Security benefits further.
· Require workers, through an automatic but reversible wage reduction, to contribute 2 percent of their wages to a private investment account.

We’ve posted a full analysis of the Thompson plan on the National Committee’s website.

A Counterfeit Crisis

Finally, we’re no longer feeling like a voice in the wilderness.

It’s certainly not popular in Washington to buck the administration’s well publicized and financed “entitlement crisis” propaganda campaign. Over the years, the Bush administration has created a mythology of impending doom for Social Security that just doesn’t exist. Their script casts anyone who doesn’t buy their bull as gutless or afraid to make “tough choices”. Anyone who doesn’t pledge allegiance to this doomsday scenario is deemed a political coward. In this world of black hat villains and white hat heroes, only politicians willing to slash entitlements are tough enough to be sheriff.

However, over the past few weeks there have been growing signs of independent analysis and critical thinking by some in the mainstream media (certainly NOT the Washington Post or Tim Russert) and even some presidential candidates.

Here are links to some of the best conversations on the counterfeit “entitlement” crisis:















Thursday, November 15, 2007

Higher premiums, Growing Out of Pocket Costs & Doughnut Holes

It’s Medicare Open enrollment time again. A painful annual ritual for American seniors who, in order to receive prescription drug coverage under Medicare’s privatized Part D program, must wade through pounds of statistics, charts and cost analyses just to determine if their current plan will even serve their needs next year.

Why, is this so complicated? Welcome to the world of privatized Medicare where each year most of these private insurers switch their formularies (in other words, drop drugs), require generics and increase premiums and co-payments. 75% of seniors will face a premium increase this year if they don’t switch plans.

However, it truly could be hazardous to beneficiaries’ fiscal and physical health if they don't shop around rather than stick with their current plan out of loyalty, confusion or fear of the unknown.

According to the National Seniors Law Center, the premium for the least expensive plan in New York will go up 167%, 90% in Florida and 44% in Pennsylvania. More than 2.5 million low-income seniors must switch plans this year to avoid having to pay out-of-pocket costs for the first time.

A survey by the consulting firm, Avalere Health, reports that in many states Part D premiums are doubling for the second year in a row. The popular Humana PDP Standard Plan charged $6.44 a month in Maryland when it first marketed its plan to seniors, two years ago. Last year’s premium doubled to $13 and now the premium will more than double again to $27.20. More than 80% of Part D enrollees are in the top ten drug plans and all but two have raised their premiums. AARP’s Medicare RX Plan-Saver is the most popular plan and, according to Avalere’s research, will increase its premium an average of 65% in 2008.

But as the insurance industry knows very well, it’s human nature is to stick with what you know. So far, that has been true for Medicare beneficiaries even to their detriment. The increasingly daunting task of analyzing a myriad of private drug plans’ (52 drug-only plans nationwide in 2008) formularies, co-payment, and premium schedules each and every year is an absurd burden which benefits insurers not seniors.

It didn’t have to be this way. Seniors want and need a prescription drug benefit under Medicare which would provide stable and consistent coverage which manages costs with no gaps in coverage like the so-called “doughnut hole”. What they’ve gotten with this privatized program is an overly complicated process that puts insurers’ bottom lines ahead of seniors’ needs.

For more information on how to navigate the Part D enrollment maze here is a link to our Frequently Asked Questions guide.

You can also find out more about the privatization of Medicare and Part D on our website.

Monday, November 12, 2007

Political Gamesmanship Threatens SSA

by Maria Freese, NCPSSM Government Relations& Policy Director

Congress and the President are beginning the final stages of a high-stakes political game of poker as the year winds down. With no compromise in sight on funding levels for any of our government agencies, this is the first time in recent memory that a President has categorically refused to negotiate on the total amount of spending by the federal government. His Administration picked a top-line number and he’s sticking to it no matter what – a tactic the American public has become all too familiar with during the past 7 years.

Included in this game of chicken is funding essential to operate the Social Security Administration. SSA is one of the few agencies that raises money for its own operations. A small portion of every dollar of payroll taxes covers administrative costs.

But because SSA funding is mixed together with funds for other agencies such as National Institutes of Health, SSA must compete for a limited pot of money. The result is that since 2001, SSA has suffered a $1 billion cut from its budget requests, leaving it without enough money to replace employees as they leave. This despite the new responsibilities Congress and the President have placed on the Agency, including verifying eligibility for the low-income subsidies in the Medicare Part D prescription drug program – and at a time when the agency is facing the beginning of benefit claims by the baby boom generation.

The result? Offices around the country are closing, and Americans are facing increasingly long waiting times for everything from getting a question answered to having an application for disability payments reviewed. The disability issue is especially critical, as the average wait for a hearing now stretches 18 months.

Congress added $275 million to the President’s request for the Agency’s funding in the 2008 Labor-HHS Appropriations bill, for a total of $9.9 billion. This amount would help SSA tread water – it’s by no means enough to reverse the shortfalls of the past. But the President has threatened to veto this bill, and it’s not clear Congress will have the votes to override the veto. If Congress is forced to start cutting programs in order to meet the President’s demands, SSA funds are at risk just like any other agency’s – despite the program’s $190 billion surplus.

As the President pushes Congress into this game of political brinksmanship, we hope he will consider that more is at stake here than an arbitrary set of budget numbers. For seniors and the disabled who count on Social Security, their very survival may be at risk.

Friday, November 2, 2007

"Entitlement " Commission Hearing in Senate

Entitlement hysteria is in full view on Capitol Hill this week as the Senate Budget committee held its first hearing on legislation proposed to create yet another bipartisan commission. We’ve already expressed our position on this commission, see here and here . Unfortunately, this first hearing proceeded down exactly the path we’ve expressed concern about before.

During this hearing there was virtually no acknowledgement that the challenges facing Social Security and Medicare are very different. A one-size-fits-all discussion of "entitlements" ignores the unique challenges facing Medicare (a healthcare program) and Social Security (a retirement and social insurance program). Lumping these programs together in search of policy solutions makes no sense. There was also little discussion of national healthcare reform and its role in this debate, even though skyrocketing healthcare costs are what is jeopardizing Medicare’s solvency.
Curiously missing from the Budget Committee’s table of experts was CBO Director Peter Orszag who has said,

“We do a disservice by uniting the health care issue with the aging issue"

He has testified many times to other Congressional committees that the rising cost of healthcare represents a far more serious fiscal danger than aging baby boomers. Medicare, not Social Security, is what is driving up the costs of entitlements. Medicare costs are increasing so dramatically because of overall increases in the cost of health care, not because of our aging population.

Coincidentally two new studies also came out this week detailing just how critical the healthcare debate is for seniors and Americans of all ages. The Kaiser Family Foundation reports that between 1997 and 2003, median out-of-pocket health spending increased by 50% while individual income rose by just 15%. Insurance premiums where the largest chunk of that increase. The Commonwealth Fund surveyed patients in seven industrialized nations and found Americans spend double what people in the other countries do on health care, but have more trouble seeing doctors, are the victims of more errors and go without treatment more often.


Focusing so much attention on "entitlements" while glossing over underlying issues such as healthcare reform is a fatal flaw in this commission approach.

Thursday, October 25, 2007

Fires, Floods and the “Vicissitudes of Life”

''We can never insure 100 percent of the population against 100 percent of the hazards and vicissitudes of life''...Franklin Delano Roosevelt

It was true 73 years ago and as this week’s devastating fires in Southern California remind us, it’s still true today. But whether it’s destructive flames on the West coast or devastating floods in the Gulf coast, we’ve seen just how quickly life’s circumstances can take a turn. One of the great untold stories during these times of national crisis is the Social Security success story.

8,700 Social Security checks have already been sent to residents in Southern California. Unfortunately, some of those checks will arrive even though residents have evacuated and their homes have been destroyed. But staff at the local Social Security offices will coordinate efforts to get those checks to California seniors, the disabled and their families who will need them. In its seven-decade history, Social Security has never missed a payment and it won’t this month either.

National tragedies like the California fires also remind us what a critical link SSA offices provide to a vulnerable population. But these offices have faced limited budgets forcing closures, low staffing and huge disability hearing backlogs. We’ve written to Congress urging support of increased funding for SSA administration.

In the wake of this disaster, the Social Security Administration is reminding beneficiaries to use direct deposit. It’s a simple process to enroll either directly with SSA or through the Treasury Department’s GoDirect campaign. As disaster victims in the Gulf coast and now those in Southern California have found, direct deposit allows Social Security beneficiaries access to their funds immediately without worrying if they even have a mailbox left or not.

Friday, October 19, 2007

COLA Can't Keep Up

The Social Security Administration has announced a 2.3% cost of living adjustment for the more than 50 million Americans receiving Social Security in 2008. This adds about $24.00 to the average monthly Social Security check of $1,055 and is the lowest increase in four years.

“Rising healthcare costs, including Medicare Part B premiums and prescription drug costs, have outpaced Social Security cost-of-living increases for years. Part B premiums alone have more than doubled since 2000. Combine that with high energy and food costs and you can see why seniors are feeling the pinch.

COLA’s are critically important to help seniors maintain a basic standard of living. However, as long as we continue to ignore the need for system-wide healthcare reform, Social Security COLA increases will continue to fall short for America’s seniors, disabled and their families”. Barbara B. Kennelly, President/CEO

We’re thankful to have a Social Security system that has any cost of living increases at all – most private pensions don’t, and buying inflation adjusted annuities with your savings is one of the most expensive retirement products around.

But the reality of this cost-of-living increase is that come January, beneficiaries will likely see it all spent and then some. The Arizona Republic summarized the dollars and cents realities of living on a fixed income. Our fall Newsletter also looks at how rising healthcare costs are eating away at the COLA.

Tuesday, October 16, 2007

Falling Down the Rabbit Hole...

We have to admit to being more than just a little confused when we read press coverage of yesterday’s baby boomer event at the National Press Club. Just in case you missed it, the nation’s first baby boomer, Kathleen Casey-Kirschling, filed online for Social Security benefits yesterday to much hoopla.

But what was truly unexpected about this event was the lack of the administration’s usual gloom and doom propaganda. In fact, Social Security Commissioner Michael Astrue was incredibly reasonable and definitely not singing from the same “sky-is-falling-the-baby-boomers-will-suck-us-dry” hymnal preferred by the Bush administration.

Here is what Commission Astrue said about Social Security’s financial outlook:

“There’s no reason for any immediate panic”
“It’s not catastrophic”
“There’s no factual basis for these ‘nuclear winter’ scenarios
many have described”


Wow. You have to wonder if the White House knows he’s sticking so closely to the facts.

But here’s where we find ourselves down the rabbit hole. While the Bush administration’s Social Security head is telling the straight story on the program’s long-term fiscal picture (unlike what we generally hear elsewhere from this administration), multiple news organizations virtually ignored it in favor of the White House’s crisis propaganda. Almost all of the coverage today parrots the administration’s “we can’t afford the Baby Boomers ” line even though that is not what the SSA Commissioner actually said at this event.

The Washington Post even went so far as to belittle the Commissioner and Casey-Kirschling for having the nerve to express their confidence in Social Security’s future. The media loves a crisis...this isn’t new. However, Social Security is too important to millions of American seniors and their families to play so fast and loose with the facts in the name of headlines.

The first boomer said it best yesterday when she said,

"I think the baby boomers will want to get this fixed...they're going to want to take care of their children and their grandchildren."

We agree. If only we could set aside the phony crisis calls to do it.

Building the Case for Privatization

By Barbara B. Kennelly, President/CEO
The National Committee to Preserve Social Security & Medicare

The Bush administration continues its ongoing campaign to build a case for the same discredited Social Security “reforms” already rejected by Congress and the American people.

This second Treasury Department report on Social Security continues the administration’s intergenerational warfare propaganda by attempting to pitt baby-boomers against future generations by describing today’s retirees as receiving “excess benefits”.

These so-called “excess benefits” are actually about $1,000 a month for the average Social Security beneficiary. Two out of every three Social Security beneficiaries receive over half of their income from Social Security, and it's the only source of income for nearly one-in-five seniors. These are the realities beneficiaries’ face which receive little to no attention in this report.

While not offering proposals, this report does suggest private accounts as one of only two ways to pre-fund Social Security. Social Security is social insurance and should not be twisted to meet the Wall Street notion of what Social Security should be, a pre-funded system measured by investment rates of return. However, it is clear that this is exactly the case currently being built in these Treasury department reports

Tuesday, October 2, 2007

Seniors or Insurers?

The Senate is currently searching for money from the Medicare program to prevent next year’s cut in doctors’ reimbursements. If you needed to cut billions of dollars from Medicare which of these options would you choose? Eliminate all or part of the $54 billion in government subsidies going to private insurers in the Medicare Advantage program (as proposed by the independent Medicare Payment Advisory Commission-MedPAC ) or cut healthcare benefits going to seniors making higher than average incomes?

Seniors or Insurers? A seemingly easy choice.

For the Bush Administration and their allies in Congress the choice, of course, is to cut benefits for seniors. According to Jonathan Weisman and Christopher Lee writing in the Washington Post today, Nevada Senator John Ensign is once again pushing his plan to expand Medicare means testing.

This is a perpetual favorite for those who believe the way to erode public support for Medicare is to turn it into a welfare program serving only the poor by driving wealthier seniors into private insurance. As we’ve seen with the SCHIP debate, the concept of providing healthcare for all drives some in Washington crazy.

The Post says:

Already, the section of Medicare that pays for outpatient care, including doctors' fees, imposes some means testing. Single seniors with incomes exceeding $82,000 and couples with incomes about $164,000 pay higher premiums on a sliding scale as their wealth rises. Those thresholds rise each year with inflation. The original Bush proposal would have frozen those thresholds at $82,000 and $164,000, so more seniors would have been affected by means testing over time. The same thresholds would have applied to the new prescription drug benefit. According to the White House budget office, the proposal would have saved more than $10 billion over five years.

But wait. Cutting government overpayments to private insurers in Medicare would save more than 5 times that amount! Even if you trimmed just half of these outrageous overpayments to insurers you would still save more than this means testing proposal.

Seniors who aren’t living paycheck to paycheck are an easy target. But means testing Medicare will not improve its long-term solvency. Driving healthier, younger and higher-income seniors away from Medicare will change the program from one providing universal coverage to all beneficiaries to a welfare program with increasingly unsustainable costs.

Maybe that’s their ultimate goal after all.

It’s More Than Just Nickels and Dimes

So you probably saw the headline this morning... “Medicare Premiums Up 3.1%” ...and thought ‘hey that’s not so bad’. At least that what CMS hopes you think.

But Medicare premiums are just one part of the picture. Seniors are also facing higher co-payments, out of pocket costs, rising prescription drug fees and doughnut holes. In 2000, the Medicare Part B premium was $45.50. Next year it will be $96.40. This 112% increase is certainly not good news for seniors living on a fixed income. Social Security cost of living increases just can’t keep up with rising healthcare costs, which continue to grow unchecked. These programs aren’t flawed, healthcare costs are running amok.

The Center for Retirement Research at Boston College has issued a new report describing the real challenges facing seniors...

The long-run solution is to control the costs not just of Medicare, but of the entire health care system. The United States spends a much higher share of GDP on health care services than other countries, yet in many instances produces less favorable outcomes.

Here is coverage of yesterday’s Medicare premium announcement. We also shouldn’t forget that this 2008 premium is artificially low. It assumes that Congress will cut payments to doctors, which is unlikely, meaning there's a possibility those costs will be passed on to beneficiaries in later years.

Tuesday, September 25, 2007

Bet He Won’t Be Invited Back...

CBO Director Peter Orszag offered insurers some advice yesterday they probably didn’t want to hear. He told attendees at the American Health Insurance Plans conference on Medicare that insurers should present data showing what is working in Medicare’s overpaid and highly subsidized private Advantage plans.

Private insurers have been promising for decades they could provide cheaper and more efficient coverage for seniors than Medicare. But they’re currently charging Medicare $1,000 more a year to cover a beneficiary in a private plan than it would cost to provide care to that same beneficiary under traditional Medicare. So far, private insurers can’t (or won’t) show us what we’re actually getting for that subsidy. Here’s Congress Daily’s coverage:

CBO has determined through a review that disease management programs mightreduce some healthcare costs, but the savings are offset by the costs of preventative measures, such as screening. "I know a lot of private practitioners have a different view, and I would say, show us the data," Orszag said at an American Health Insurance Plans conference on Medicare...Because the
interventions are not backed up by evidence,they drive up cost without improving health or outcomes," Orszag said.

MedPac’s estimates, that in the case of Private Fee-For-Service plans, only about half of these excess payments are used to deliver extra benefits for enrollees. The rest finances administrative costs, marketing, and profits. This is the elephant in the AHIP conference room Orszag had the courage to acknowledge.

Don’t forget that CBO has also said we could save $54 billion over the next five years and $149 billion over the next ten years if we just paid private plans the same rate as Medicare. Not only would eliminating these large overpayments save billions of dollars, it would also add two years of solvency to Medicare’s trust fund.

What Part of “No” Don’t they Understand?

Make no mistake about it...the Bush administration clearly understands the value of a well structured and financed public relations campaign. Yesterday’s release of the first in a series of Treasury department “issue briefs”, signals the start of another run at defining Social Security reform in a way that best suits this administration’s ultimate goals...the creation of private accounts and massive benefit cuts. What the White House doesn’t seem to get is that sometimes even the best PR and Marketing strategy can’t sell misguided policy goals.

Here’s our analysis of this first Treasury brief entitled "Social Security Reform: The Nature of the Problem".

The Brief overstates the problem repeatedly by using the discredited “infinite horizon” calculation. The American Academy of Actuaries, the leading professional organization of actuaries, has warned that infinite-horizon projections “provide little if any useful information about the program's long-term finances and indeed are likely to mislead anyone lacking technical expertise in the demographic, economic, and actuarial aspects of the program's finances into believing that the program is in far worse financial shape than is actually indicated”.

Focuses on Benefit Cuts. Treasury Secretary Paulson says that Social Security can only be fixed by raising taxes or cutting benefits, yet he is focusing on benefit cuts.

Issue Brief Introduction: “Social Security can be made permanently solvent only by reducing the present value of scheduled benefits and/or increasing the present value of scheduled tax revenues.”

Secretary Paulson’s Statement : “While differences over personal accounts and taxes dominate the public debate over this issue, in my conversations I found that there are many other things on which people agree.”

Statement from the White House: The Associated Press reports, “But White House officials stressed that President Bush remains opposed to raising taxes."

So, while the Administration says tax increases and/or benefit cuts are the only solutions, they again propose only benefit cuts as the solution. To suggest that there are only “differences over personal accounts and taxes” (implying people agree on the need for benefit cuts) does not reflect the political reality.

Resurrects Privatization. The report makes it clear the Administration is interested in resurrecting privatization. However, rather than addressing it directly, the report uses “prefunding” as the code-word for privatization.

Issue Brief Statement: “Fairness to Future Generations Requires True Pre-Funding” and “Only if pre-funding is ‘real’ can this goal of fairness be achieved.

This is the setup to Social Security privatization. Remember when the White House renamed private accounts as “personal” accounts? The American people still understood this was the privatization of Social Security and they rejected it. The new buzz-word (for the same thing) appears to be “pre-funding”. Changing the terminology doesn’t change the fact that the political goals remain the same.

The Administration is merely resurrecting its arguments for privatization and laying the groundwork for President Bush’s plan for so-called progressive price-indexing of Social Security benefits, a plan which would cut benefits drastically affecting 70 percent of future retirees.

Friday, September 21, 2007

A "Must-Watch" Debate for Seniors & Their Families

For 90 minutes last night 5 Democratic Presidential candidates focused on the issues nearest and dearest to our hearts...financial and retirement security and healthcare.

If you missed this debate last night (and we understand some may already be suffering from presidential campaign fatigue...just 15 months out no less) this is one worth watching even after the fact.

Kaiser has a very good coverage roundup here and Iowa Public Television has the video.

Bookmark it and make this one a must-watch. These issues will affect all of our lives for decades to come.

Wednesday, September 19, 2007

We Don't Need an Entitlement Task Force

by Barbara B. Kennelly, President/CEO


Here’s a letter I sent to Congress today urging members to reject efforts to turn over their legislative responsibilities regarding entitlement spending and tax reform to a new Budget Task Force. As a former Congresswoman, I understand how tough these issues can be for our elected leaders. But I just don’t believe our process is so broken that Congressional committees should be sidelined in a debate on issues which touch virtually every American family in such critical ways. Here is the full text of my letter:

This week the Chairman and Ranking Member of the Senate Budget Committee renewed their plan to create a task force to write comprehensive entitlement and federal tax legislation.Under the plan, jurisdiction for long-term changes to Social Security, Medicare, Medicaid, and federal taxes would be handed over to a 16-member task force, divided equally between the majority and minority party. We understand Rep. Jim Cooper and Rep. Frank Wolf will introduce companion legislation in the House.

We appreciate the effort that both Senator Conrad and Senator Gregg have invested in their proposal. Despite their good intentions, however, we believe this plan contains many of the fatal flaws that have tainted similar bills over the years.

Social Security and Medicare are critical lifelines for America’s seniors.
Seniors deserve to have changes to these programs receive substantive consideration by Members of the Committees who best understand their intricacies. Major changes to these programs also deserve to be considered by Congress under a normal, open legislative process. The Conrad/Gregg plan would bypass these important protections. If it is adopted, America’s seniors will be the big losers.

For these reasons, the National Committee to Preserve Social Security and Medicare strongly opposes this measure.

Social Security Privatization Will Again Threaten America’s seniors.
The President and many of his supporters in Congress have made it clear that they favor privatizing Social Security. Despite strong public opposition, they continue to press for diverting money out of the Social Security Trust Fund and into private investment accounts.

Despite the expressed opposition to private accounts by the current majority Congressional leadership, establishment of this task force would give supporters of privatization a new forum in which to resurrect privatization. In addition, it offers privatizers a voice and a vote significantly disproportionate to their representation in Congress.

In effect, while the Task Force appears to be structured in a neutral manner, in fact it will create a platform for those who support the privatization of Social Security which might not be available to them through an open legislative process.

Legislative Jurisdiction over Social Security, Medicare, Medicaid and Federal Taxes Will Be Handed to the Task Force. Major restructuring of Social Security, Medicare and Medicaid has never been attempted in a single piece of legislation, and for good reason: these programs encompass significantly different economic issues and touch virtually every facet of American life. Under the Conrad/Gregg proposal, their future, as well as the construction of our entire system of federal taxation,would be placed in the hands of a group of only 16 people who may or may not have significant experience in the breadth of issues they encompass. Congressional Committees of jurisdiction, which have cultivated detailed knowledge of the programs and the needs of their beneficiaries over decades of hearings and education, would be relegated to being bystanders in the process.

We recognize the perspective of those who believe Social Security, Medicare and Medicaid should all be treated as one, with a focus on their long-term budgetary impact. However, we strongly believe this approach is both inappropriate and counterproductive. While these programs are entitlement programs, they have little else in common, yet they would be treated under a single legislative umbrella.

Social Security and Medicare are distinct programs and need to be addressed separately.
Contrary to popular rhetoric, Social Security’s funding gap is both modest and manageable. This gap is caused by a combination of demographics and the changing nature of income in our economy. Achieving Social Security solvency requires neither privatization nor deep cuts in benefits. If privatization were permanently and affirmatively rejected as part of the discussion, there is no reason to believe the Committees of jurisdiction could not devise a suitable plan to strengthen both the program and its long-term finances.

Medicare, on the other hand, is a health care program and most of its cost increase is being driven by the cost of overall health care, not demographics. As you know, solutions for our nation’s health care problems are elusive because they are extremely complex, and can hardly be expected to be resolved by a budget-oriented Task Force. In the absence of this type of comprehensive health care reform, any changes to Medicare standing in isolation are likely to simply shift costs onto the elderly.

The American People Will Be Left Out of the Discussion.Under the Conrad/Gregg proposal,a working group of current members of Congress and representatives of the current Administration would meet during 2008 and design the legislation that would address all of the long-term funding issues affecting Social Security, Medicare and Medicaid. The Task Force’s recommendations would be issued on December 9, 2008. The legislation would then be forced through Congress under extremely short timelines with no opportunity for amendments.

This would result in legislation written by a group which is not representative of the composition of the current Congress and may be even less representative of the Congress elected in 2008. More importantly, the American people will elect a new President in the fall of 2008. The legislation written by the working group would be forced upon a President who may have been elected by the American people on a platform at odds with the legislation offered by the working group. As a result, the voice of the American electorate would be diluted.

The Conrad/Gregg proposal runs counter to the intent of our Founding Fathers that actions by Congress reflect the will of the people they represent. Creating restrictive timelines and prohibiting amendments to push through changes of this importance to millions of Americans, especially senior Americans, ultimately disenfranchises voters and hurts the political process. While we agree with the goal of strengthening Social Security and Medicare, we strongly disagree with the process created by the Conrad/Gregg bill.

Cordially,

Barbara B. Kennelly, President/CEO

Tuesday, September 18, 2007

SCHIP UPDATE

Not surprisingly, the insurance industry’s million dollar ad and lobbying campaign is paying off on Capitol Hill and it appears a Congressional compromise to re-authorize SCHIP won’t include needed reforms to Medicare.

Congress Daily summarizes the closed-door negotiations and Speaker Pelosi’s comments afterwards:

House Speaker Pelosi said “We are working on agreements between [the] House and Senate to take two proposals to our respective caucuses in order to see where we go from here." House leadership sources speculated she was referring to breaking the House measure into separate Medicare and SCHIP bills to avoid confronting the Senate with the House Medicare funding language, which Senate negotiators have called a poison pill.

Of course, the President promises a veto of anything other than his proposal anyway so that’s no small part of the political calculations here.

Both the Medicare overpayments to private plans and the doctor’s fix appear destined for “to be determined later” status. The Health Care Policy and Marketplace Review’s latest posts on this can be found here and here.

Monday, September 10, 2007

Even 2.8 Million Dollars Can’t Sell a Bad Idea

According to a new GAO report, that’s the estimated price tag for the President’s failed Social Security Privatization Road Show two years ago. Most of those taxpayer dollars... $437,887...were spent for Air Force One and Air Force Two to shuttle the promoters in chief to 40 cities nationwide with another $370,000 in travel costs for Executive Office staffers. The kicker here is the GAO acknowledges these numbers probably aren’t complete...


“We could not test the validity of some of those costs because (the Executive Office of the President) withheld certain key information and Treasurydid not have supporting documentation for amounts it reimbursed EOP,’’ Comptroller David Walker wrote in the letter summarizing the review. “ We are, therefore, unable to provide reasonable assurance that the costs reported to us are complete and fully supported.’’

We can only imagine what the finally price tag would have been had the American people not made it abundantly clear that the more the President talked about his Social Security privatization scheme...the less they liked it. Too bad he didn’t figure that out a million dollars or so earlier.

The Swamp also has a good discussion of the GAO report.

Friday, September 7, 2007

The Senate Still Has a Hard Time Telling Insurers “No”

The differences between Senate and House members trying to negotiate a compromise in their legislation to reauthorize and improve access to healthcare for children, SCHIP, remain. That, in our opinion, is a good thing. Not because we like gridlock but because this legislation is too important to seniors and children alike to take the easy way...which is to ignore the difficult issues tackled in the House bill but absent in the Senate version.

The House bill, called CHAMP, includes desperately needed reforms to private Medicare Advantage plans and is by far the better piece of legislation. Money currently being used to overpay insurers would go to improve health insurance access to children. More than a fair trade. Thankfully, House leaders are sticking to their guns...so far. Congress Daily describes yesterday’s closed door meeting this way:

"Senate Majority Leader Reid, House Majority Leader Hoyer, Senate Finance Chairman Baucus, and House Energy and Commerce Chairman Dingell attended the meeting in House Speaker Pelosi's office to discuss how to approach a conference report that would merge the bills. They made no decisions. 'We've got to find out how close are we. We know how far apart we are just without talking,' Rangel said. 'They cannot make commitments on their side, and we damn sure can't on ours, to say that we're compromising when we don't even know where we are.' From Rangel's perspective, ripping apart the House package might threaten its majority support. 'We put the baby together, and we made the baby with [Energy and] Commerce Committee and the Ways and Means committee, our caucuses, liberals, Democrats, pro-tax, anti-tax, cigarette people. We put this child together. And to split the child in half is very, very difficult to sell it to the parents,' he said."

While every major seniors and health advocacy organization (including the AMA and AARP) supports cutting millions in outrageous overpayments to private MA insurance companies and using that savings to improve insurance access for children...you can see just how much influence the insurance lobby still has on Capitol Hill...

“Before the meeting, Baucus said it would be very difficult to get the needed 60 votes for a conference report in the Senate if any Medicare provisions are added. Several Republican supporters of the Senate bill say they will not tolerate cuts to private Medicare Advantage programs that are part of the House bill.” Congress Daily AM, Sept 7, 2007

So in short, some in the Senate just "won’t tolerate" cuts to private plans which pay private insurers about $1,000 more than Medicare receives for the same beneficiary. They "won’t tolerate" cutting industry subsidies which will cost taxpayers $149 billion dollars over the next decade and cuts two years from Medicare’s solvency. And let’s not forget the extra $24 a year every Medicare beneficiary is paying to cover these subsidies...whether they’re in a private plan or not.

Clearly, the insurance industry does not want to lose the MA gravy train and it's lobbying hard to protect the sweetheart deal it wrote and passed through Congress in the 2002 Medicare Privatization...oops, we mean Modernization...Act.

That’s why we say in this instance...differences are a good thing. And we urge Senate to find the same courage their colleagues showed in the House and support SCHIP legislation that considers what’s best for children and seniors alike.

Tuesday, September 4, 2007

The Insurance Industry Hits a New Low

No doubt, you’ve seen AHIP’s (America’s Health Insurance Plans) television ads designed to scare seniors into believing that cutting millions in industry subsidies is somehow the same as cutting Medicare. This weekend, their president penned a letter to the Washington Post continuing the intergenerational war refrain, which has become a popular marketing ploy used by the Bush administration whenever it wants to scare one age group or the other.

If you want to get beyond the rhetoric, check out Robert Laszewski’s post today at the Healthcare Policy and Marketplace Review blog. He contrasts AHIP’s main points with the truth, such as:

“The Congressional Budget Office predicts that 3 million seniors—mostly rural Americans—will lose their Medicare Advantage coverage altogether if the House bill becomes law.” I am sure that is right. But the CBO is right more because the plans that have been gaming the Private Fee For Service payment system won’t any longer be able to do it and will leave those markets.

And then the big one: “There’s no justification for pitting children against seniors.” Damn right. So, why are you making this into a kids versus seniors issue?

While we don’t agree with all of Laszewski’s conclusions, it is refreshing to see someone looking past the PR to the actual truth of the matter. The post's discussion also provides more thoughtful insight into this "seniors versus children" propaganda.

The real question is...Can those who actually care about sensible healthcare options for seniors and children cut through this million dollar industry marketing blitz to persuade the Senate to take the House’s lead on SCHIP and MA reform?

Here’s a letter we’ve sent to the Senate urging they consider legislation that improves children’s healthcare access through SCHIP while also making desperately needed reforms to private Medicare Advantage plans.

Wednesday, August 22, 2007

Let’s Set the Record Straight…One last time

Ask Mary Jane, NCPSSM Contributor: Mary Jane Yarrington, Senior Policy Analyst

“I’ve contributed 40 hours to Social Security but can’t collect my benefit”…Yes, you can.

Here’s a sampling of the different ways the myth surrounding the Windfall Elimination Provision comes to me from questioners:

“My wife heard that she won't be able to collect her own SS at retirement age because she will collect from a school retirement plan. Can that be true?”

or

“When I went to the Social Security office I was devastated to learn that I would never receive any social security benefits (even though I have a minimum of 40 credits). I never knew such a thing as the Windfall Elimination Provision existed”

In short, if you hear “you can’t collect any of your Social Security” because of the WEP then you have been misinformed. Any citizen or legal resident who earns 40 quarters of Social Security coverage is entitled to a retirement benefit at retirement age. There are no exceptions.

The Social Security Act’s Windfall Elimination Provision (WEP) requires the determination of a Social Security benefit by a separate, lower benefit calculation. This applies if the wage earner contributed to a pension rather than Social Security, for example, some state, local and federal pensions. The benefit is reduced, but never to zero.

If you were given misinformation by the Social Security Administration, go to your local Social Security office and insist on filing an application dated retroactive to the date you were told you were ineligible for a benefit. There is no time limit on correcting administrative errors.Do you have questions about Social Security? If so, feel free to drop me an email at Ask Mary Jane.

Friday, August 17, 2007

Let’s Set the Record Straight…Again

Ask Mary Jane, NCPSSM Contributor: Mary Jane Yarrington, Senior Policy Analyst

“Social Security is a Ponzi Scheme” …No it’s not.

Anyone who tells you Social Security is a Ponzi scheme either doesn't understand what a Ponzi scheme is or their mother’s didn’t teach them not to fib. This myth is a favorite of conservatives who just hate the idea of social insurance in general. The Social Security Administration has a good history describing why this is nonsense. But here’s my take on this myth.

A Ponzi scheme is that e-mail you receive inviting you to send a fancy guest towel to the top three names on a list and instructing you to cross off the first name, add your name and send the same e-mail to three others. Whoever starts the list likely will receive the towels, but ultimately, there is no one left to continue the chain. The final entrants won’t receive anything. The original Ponzi played the game with dollars but the principle is the same. He borrowed money from his first investors and paid them back with money obtained from subsequent investors. He quickly ran out of sufficient investors to keep his scheme going.

Social Security is not a Ponzi scheme. Social Security is a pay-as-you-go system with the contributions of today’s workers going to today’s retirees or into the reserve to pay benefits to future retirees. The ratio of workers to retirees has changed over time, but unless this nation allows the system to be abolished, there will never be a time of no workers paying into the system. The most recent report of the Social Security Board of Trustees forecasts that even with no changes in the system, reserves will last through 2041 and even after that, 75% of promised benefits could be paid with incoming payroll taxes.

And don’t give any credence to the nonsensical comparison that in 1940 there were 40 workers to each retiree and today it is only three to one. Of course, there were fewer beneficiaries. 1940 was the first year a benefit was paid so millions of then-retired workers didn’t have the opportunity to contribute payroll taxes and earn benefits. Many of those ineligible for benefits in 1940 then relied on public assistance or their children to survive their retirement years. Hardly the “good old days” those who hate Social Security should be so eager for us to return to.

Do you have questions about Social Security? If so, feel free to drop me an email at Ask Mary Jane.

Let’s Set the Record Straight

Ask Mary Jane, NCPSSM Contributor: Mary Jane Yarrington, Senior Policy Analyst

It’s been said a “lie told often enough becomes the truth”. How sadly true, especially for those determined to convince future generations that Social Security just won’t be there for them. Not a day goes by that I don’t see the same old myths about Social Security appear in news articles, speeches by elected leaders (who should know better) and seniors who’ve been scared by these malicious myths. For the next few days I’ll offer some Social Security Myth-busting…Mary Jane style.


“Members of Congress don’t contribute to Social Security”…Wrong

Congress got the message years ago and since 1983 all members of Congress, Executive Office appointees, the President, Vice President , the federal Judiciary and newly hired federal employees have been paying into Social Security. Unfortunately, here we are 24 years later and some just won’t let this one go (even though it’s just not true).

All Federal employees, including Members of Congress, pay the same FICA payroll tax as anyone else. Upon retirement, disability or death, Social Security benefits for a Member of Congress or his or her dependents is determined under the same rules and by the same calculations as any other worker who contributed to Social Security.

Do you have questions about Social Security? If so, feel free to drop me an email at Ask Mary Jane.

Thursday, August 16, 2007

Have YOU ever given away $34 million?

Apparently the Centers for Medicare and Medicaid Services has.
A new GAO report investigates CMS audits of private insurance providers offering Medicare Advantage plans. These private MA plans will collect billions in government subsidies while also charging $1000 more per beneficiary to provide the same coverage already provided by Medicare.

This latest GAO report finds:

“CMS has not met the statutory requirement to audit the financial records of at least one-third of the participating MA organizations for contract years 2001-2005, nor has it done so yet for the contract year 2006 bid submissions.”

Even worse, the audits that CMS has performed turned up $34 million dollars which Medicare beneficiaries should have received in additional benefits, lower co-payments or lower premiums. Good news for seniors, right? Think again.

“However, in late May 2007,CMS officials told us they were planning to close out the audits without pursuing financial recoveries because legal counsel had determined that the agency does not have the legal authority to recover funds from MA organizations based on ACR audit results.“

In other words, private MA insurers get to keep another $34 million of our taxpayer dollars, because CMS won’t enforce its own contracts with the insurance industry.

Welcome to the world of privatized Medicare.

Tuesday, August 14, 2007

Time to go Part D Shopping...Again

Only in Washington could a 14% increase in prescription drug premiums for seniors be "spun" to sound like good news. That’s CMS’s strategy in announcing next year’s Part D premium hike. The administration’s logic goes something like this: since Part D isn’t costing as much as we first predicted seniors shouldn’t really mind double-digit premium hikes.

Here are the basics on the 2008 Part D premium: starting January 1 seniors’ average Part D premium for basic coverage will increase from about $22 this year to $25 next year. What CMS doesn't tell you is that in addition to this premium hike, beneficiaries will also face higher deductibles and a growing “doughnut hole” which will remain unchecked as long as healthcare costs continue to skyrocket.

By 2014, the Medicare's Trustees expect monthly Part D premiums to increase to $64.26 , the deductible to rise 75% to $457, and the $2,850 “doughnut hole” to become a yawning gap of almost $4,983.75.

CMS is also quick to remind everyone that if seniors don’t want to pay more they can just go shopping for another plan. As if choosing a drug plan for each of the first two years hasn’t been confusing enough!

An Oldie but Goodie

72 years ago today President Franklin D. Roosevelt signed the Social Security Act. Today, nearly 50 million seniors, the disabled, and survivors receive Social Security benefits and for many it will make the difference between living independently or in poverty.

No other government program in American history can claim the successes achieved by Social Security. Period. Attacks and misleading predictions about sustainability have been leveled against the program since its creation and still, Social Security checks go out on time and as promised. Whether you’re 72 or 22, it appears Social Security is poised to play an even larger role in your life.

A new report by the Center for American Progress details the decline in pensions, personal savings and median incomes, which increase the importance of the only, guaranteed retirement income…Social Security. These are especially important facts for our younger workers who have been told repeatedly that “Social Security won’t be there for you”.

What nonsense.

Here’s a great source for some historical perspective. “The Battle for Social Security—From FDR’s Vision to Bush’s Gamble”. Author Nancy Altman says Social Security’s most important champion has always been the American people.

“Through its many challenges, Social Security has always emerged victorious,because Americans have remained committed to this essential program. The large majority of Americans have supported Social Security because it embodies the best of American values, including reward for work, compassion, fairness, foresight, and prudent, conservative management. This unflagging support has permitted Social Security to eradicate much of the economic insecurity of the past and to transform society.”

Ultimately, it will be the next generation of workers who will have to see through the political hype and the privatization schemes, and come to the same conclusion generations before them have...Social Security can and must be strengthened for generations to come.

Friday, August 10, 2007

Too Silent on Social Security

Kudos to Sen. Hillary Clinton for being the first presidential candidate to remind everyone about the continuing privatization threat to Social Security. Here is her answer to a pension question posed at the August 7th Democratic Candidates Forum in Chicago:


Clinton: “The pension system is broken. We’ve got to stop companies going into bankruptcy in order to get rid of theirpension responsibilities(Cheers, applause.) We have to have defined benefits pension plans again. We’ve got to make sure that nobody ever tries to privatize Social Security, something that
I’ve fought tooth and nail with many of you to prevent.”

While the Iraq war, healthcare and the economy have dominated presidential talking points so far, we certainly hope more candidates will remember that it wasn’t that long ago when Social Security was literally under attack by those who’ve never believed in the value of social insurance.

The privatization Social Security and Medicare is a core values debate which we hope more presidential candidates will take on in their campaigns.

MSNBC has video of the Chicago forum and the New York Times has the full transcript.