Friday, June 29, 2007

Remember Pensions?...Far Too Few Do

by Maria Freese, NCPSSM Government Relations
& Policy Director

Senator Tom Harkin has introduced Pension legislation, the Restoring Pension Promises to All Workers Act, which we hope will ultimately become law.

Social Security was never designed to be the only source of a person’s income in retirement – it was always intended to be one income stream out of 3 in retirement – the other two being income from traditional pensions and income from individual savings. This so-called 3-legged retirement stool is coming under increasing pressure.

Unfortunately, we all know that coverage in traditional pension plans is dropping as only about 20% of today’s workers in the private sector are covered by defined benefit plans. And although coverage in 401k plans is growing, the average balance in the 401k plans of workers in the last decade prior to retirement is only about $60,000. If it weren’t for the run-up in housing values – many workers would be facing retirement with few assets available to finance it.

Senator Harkin’s legislation addresses a number of inequities in our pension system. The provisions he includes won’t help everyone but for the people they do affect, his bill could represent the only thing standing between them and living a life of poverty in retirement.

For workers caught in the globalization wars who are pawns in the game of mergers and acquisitions, the Harkin bill could keep them from losing half their pensions as workers caught up in a recent Halliburton re-shuffling did. For widows and divorced spouses of federal workers, the Harkin bill would help take the gamble out of survivor and retirement annuities, closing several longstanding loopholes that wipe out the pension benefits of some spouses of federal employees.

While it seems as though these glitches in the pension system should be easy to fix because they are so egregious, in fact they are not. Getting them passed will take the commitment of someone like Senator Harkin who believes now is the time to finally right these wrongs.

The National Committee commends Senator Harkin for taking on this challenge. And we look forward to working with him to get the Restoring Pension Promises to All Workers Act signed into law.

Did You See?

There's been some some good coverage of Chairman Stark's introduction yesterday of important Medicare Advantage legislation. We're regular readers of the "Medicare Monitor " blog and Larry Lipman describes this legislation, designed to prevent these private Medicare Advantage plans from charging more than traditional Medicare. You can also see coverage from Stark's home district in the Inside Bay Area blog called "Political Blotter".

Also, here's another Medicare privatization primer if you're interested in more details about Medicare Advantage plans and the privatization of Medicare.

Thursday, June 28, 2007

It's Broke...So Stark Says Let's Fix It

House Ways and Means Health subcommittee Chairman, Rep. Pete Stark (D-CA) has introduced an important piece of legislation to prevent Medicare Advantage (MA) plans from charging seniors and people with disabilities more than traditional Medicare.

The Medicare Advantage Truth in Advertising Act would prohibit MA plans from charging higher cost-sharing. Stark says:

“Medicare Advantage plans don’t live up to their name. Though seniors and people with disabilities wouldn’t know it from the never-ending stream of insurance propaganda, Medicare Advantage plans charge more than traditionalMedicare for a large number of services – everything from home health care to hospital stays and chemotherapy drugs to durable medical equipment. The Medicare Advantage Truth in Advertising Act protects beneficiaries by ensuring they won’t face higher out of pocket costs in private plans than they do in Medicare.”

The Chairman's News Release also says:

"The bill would continue to permit flat co-payments – which private plans charge for certain benefits or services in lieu of deductibles or co-insurance in traditional Medicare – but those charges could never exceed Medicare’s charges.”

The National Committee supports this legislation because; as our President/CEO, Barbara Kennelly says, beneficiaries aren't getting what they pay for with this privatized plan:

"Despite receiving substantial overpayments, private MA plans can provide inferior health coverage compared to traditional Medicare. While MA plans are required to cover everything that Medicare covers, they do not have to cover every benefit in the same way. For example, private plans may create financial
barriers to care by imposing higher cost-sharing requirements for benefits that protest the sickest and most vulnerable beneficiaries. Preventing private plans from imposing greater cost-sharing requirements than traditional Medicare would better protect beneficiaries from higher and unexpected out-of-pocket costs."

Here's another link to a Committe Chart detailing sample higher out of pocket costs in Medicare Advantage.

Will the Facts Finally Trump Fiction?


by Barbara B. Kennelly, President/CEO

How wonderful it is to finally hear the truth about what’s really happening with the privatization of Medicare expressed so clearly and persuasively in the halls of Congress. Specifically I’m talking about the House Budget Committee hearing on Medicare Advantage plans held this morning. As I testified to Chairman John Spratt and the rest of the Budget committee members today, our 4 million members and supporters are committed to the preservation of Social Security and Medicare.


At a time when Americans are being told we “can’t afford” Medicare and Social Security it’s ridiculous to continue paying private insurers billions of dollars in subsidies equaling approximately $1,000 more a year for each beneficiary than traditional Medicare currently pays. These insurance industry subsidies will cost taxpayers $149 billion dollars over the next decade and cut two years from Medicare’s solvency. These subsidies must go.

Congressional Budget Office Director Peter Orszag and Mark Miller, the Executive Director of Medicare’s Payment Advisory Commission, offered compelling and indisputable evidence that the insurance industry has reaped the benefits of these massive subsidies yet there’s little evidence of the promised efficiencies and savings for beneficiaries. In fact, Medicare beneficiaries are paying $24 a year in higher Part B premiums just to fund excess payments to private plans.

Since the passage of the Medicare Modernization Act (MMA) of 2003, Medicare has been undergoing a transformation into a privatized program. This legislation is a weapon aimed at the heart of traditional Medicare. It was designed to accomplish the goal expressed by former Speaker Newt Gingrich – to lure seniors voluntarily out of Medicare so that it would eventually wither on the vine. The overpayments to Medicare Advantage plans the committee explored today are just one of the tools in the MMA to achieve this end.

I cannot overstate the damage these Medicare Advantage overpayments will cause to the traditional Medicare program if they are not eliminated. Ultimately, overpaying MA plans will shatter the risk pool that makes Medicare work. Medicare Advantage plans tend to attract healthier seniors because of their benefits. As more of these seniors are lured out of traditional Medicare, they leave behind the frailest and most vulnerable to pay higher and higher premiums. Also, as MA enrollments grow, so do taxpayer subsidies. Over time, this cycle will cause Medicare to become unaffordable – for both taxpayers and beneficiaries.

At a time when our nation is struggling with how to create affordable health care coverage for all Americans, it is simply incomprehensible to me why we would destroy the one affordable, universal health care system that already exists in Medicare.

Tuesday, June 26, 2007

Medicare Privatization Finally Hits the Radar

When the Bush administration first tried to sell the privatization of Social Security, the American people ultimately saw through the political marketing blitz and put a stop to private account plans designed to turn Social Security over to Wall Street. Unfortunately, by the time the President's Social Security privatization road show stalled out two years ago, the privatization of Medicare had already begun quietly and beneath the radar thanks to passage of the 2003 Medicare Modernization Act. Now seniors and taxpayers are paying the price for that privatization legislation.

With billions in subsidies going to the insurance industry, a substantial portion of which comes from premium hikes, and two years lost from Medicare’s solvency; many in Congress, the press, and the public finally understand what the privatization of Medicare really means. The Los Angeles Times has a good overview:


“Healthcare providers contended that the private sector was more efficient, so they could provide more for less. But as it turns out, the private Medicare Advantage plans provide more for more, costing the Medicare system 12% to 15% more than traditional government-run Medicare costs, said Maria Freese, director of government relations at the Committee to Preserve Social Security and Medicare, a Washington advocacy group. Eliminating Medicare Advantage plans, in which about 20% of Medicare recipients have enrolled, would give the system about two additional years of solvency.”

The Senior-Spectrum also highlighted the issue and quoted NCPSSM President/CEO Barbara Kennelly:


“The Administration’s goal is clear … to stack the deck in favor of a Medicare program run by private insurance companies allowing the destruction of the traditional program seniors have depended on for decades,” said Kennelly. “Congress must level the playing field, and it can start by eliminating these corporate giveaways.”

Congressional hearings in the House and Senate continue and we expect there will be legislation on Medicare Advantage overpayments later this year.

Friday, June 22, 2007

The Spin Makes Our Heads Swim

The Washington Post continues its love fest for the so-called "Fiscal Wake-Up Tour", Comptroller General David Walker's traveling troupe of the "sky-is-falling-we-must-cut-entitlements" think tankers. Here's an excerpt from Thursday's article:

"The numbers make Joseph Farrell's head swim. Billions and trillions of dollars, numbers too immense to comprehend."
Of course they are. That's the whole point of lumping together Medicare, Medicaid and Social Security in these presentations, even though the challenges facing each program are as different as the solutions. Let's be honest, the numbers just wouldn't be as incomprehensible or scary if we talked about Social Security (a retirement program facing long term issues) and Medicare/Medicaid (healthcare programs facing a more immediate crisis in concert with a national healthcare crisis) on their own terms. This shock and awe approach is clearly not designed to provide solutions. In fact it appears the end result is just the opposite:

"I knew there was a problem, but I didn't realize it was this bad," Farrell,25, marveled after a recent presentation at the University of South Florida, from which he is to graduate in August. "I didn't realize there was no solution in sight. My taxes are going to be huge."

No solutions in sight? You've got to be kidding. Is that really the message being left by these Paul Reveres for reform? There are scores of Social Security reform options out there. Some more politically viable than others. Here's just one example from Robert Ball, Social Security Commissioner under Presidents Kennedy, Johnson and Nixon. A simple Google search will lead you to countless more.

As for Medicare, here's an obvious solution offered yet again by Congressional Budget Office Director Peter Orszag...nationwide health care reform. You can link to video of his testimony Thursday before the Senate Budget Committee and Congressional Quarterly's coverage. He said:

“The rate at which health care costs grow relative to income is the most important determinant of the long-term fiscal balance; it exerts a significantly larger influence on the budget over the long term than other commonly cited factors, such as the aging of the population.”

In other words, the President's claim that aging baby-boomers are sucking the nation dry through sky-rocketing entitlements does not tell the whole tale. But it certainly makes great headlines.

Tuesday, June 19, 2007

Are We Supposed to Say Thank You?

Friday the Centers for Medicare and Medicaid Services and Insurance industry lobbyists had their News Releases written, statements prepared and happy faces ready to announce their great news...7 insurance copanies which sell private Medicare "Advantage" plans have voluntarily agreed to stop marketing them. This is "spin" for we got caught with our hands in the cookie jar so we better propose a fix more to our liking than the one Congress will impose on us.

These insurers, many specifically accused of defrauding and manipulating seniors nationwide into private Medicare plans they can't use or afford, or worse illegally signing seniors up without their knowledge, say they'll now be take a voluntary marketing break until CMS is sure these plans are actually following the law. Shouldn't CMS have been doing this from the beginning? Shouldn't these "controls" have been in place and enforced before coast to coast headlines and Congressional hearings detailing thousands of cases of marketing fraud made this nationwide scandal too much even for the insurance industry to ignore? For seniors who were unwillingly shifted out of Medicare and into these private plans, those controls might have saved them untold grief and expense.

Is this voluntary (and temporary) marketing ban the only price these private companies will pay for this widespread con of American seniors? Here's what CMS said in it's release:


“While we note that most health insurance agents are helpful and responsible in describing and explaining choices to beneficiareis, there are a few bad actors that need to be removed from the system for good," said Leslie V. Norwalk, Esq., Acting Administrator of CMS. "This voluntary agreement demonstrates that CMS and the plans are stepping up to ensure that deceptive marketing practices end immediately, and that beneficiaries understand what they are purchasing."


Not surprisingly, this late awakening to the need for oversight isn't impressing everyone on Capitol Hill. Including Ways & Means Health Subcommitte Chairman Pete Stark who is quoted as saying:


"The administration's response is to allow private companies to determine which crimes they'll plead to and which sentences they'll serve. This will do virtually nothing to protect Medicare beneficiaries and is a pathetic attempt to pre-empt congressional action."

And so, seniors probably won't be sending out any "Thank You" cards to CMS and the insurance industry just yet.

Thursday, June 7, 2007

Medicare "Advantage" only an Advantage for Insurers

As we've predicted, seniors enrolled in Medicare are feeling the affects of privatization legislation, called the Medicare Modernization Act, passed four years ago. We've released a new analysis today of how private Medicare Advantage plans are eroding traditional Medicare in favor of a privatized system subsidized by billions of federal dollars which go straight to insurers. Entitled: “Attack on Medicare: Private Health Plan Subsidies Windfall for Corporate America” this report finds:

· Even though they promised better benefits at lower costs than traditional Medicare; private insurers are actually being paid about $1,000 more for each beneficiary covered by private plans.

· These government subsidies will cost the federal government $149 billion dollars over the next decade. These overpayments will also cut two years from Medicare’s solvency.

· Not all of these subsidy dollars are being used to improve benefits. A significant portion goes straight to insurers rather than seniors. Meanwhile, every Medicare beneficiary (even those not in private plans) is paying $24 a year in higher premiums to pay for these industry subsidies, and that number will continue to rise.

Our President/CEO, Barbara Kennelly, joined other senior's groups and Medicare advocates on Capitol Hill today urging Congress to repeal these unfair corporate overpayments and rollback the privatization of Medicare before it’s too late. She says:

“Rome is already burning. Our members nationwide are paying higher premiums, facing larger out-of-pocket costs and being aggressively sold private plans which often do not even provide the coverage they need. The administration’s goal is clear…to stack the deck in favor of a Medicare program run by private insurance companies allowing the destruction of the traditional program seniors have depended on for decades. Congress must level the playing field and can start by eliminating these corporate giveaways.”


This methodical destruction of traditional Medicare is happening with so little attention on Capitol Hill it's frightening. For groups like ours the challenge now is to wake up Washington to what seniors all over this country are painfully discovering...the privatization of Medicare is certainly good for business but not for seniors who need inexpensive and dependable healthcare.

Friday, June 1, 2007

700 Thousand Waiting...and Still Counting


The dismal state of affairs for the 733,000 Americans currently waiting for a Social Security disability hearing has garnered alot of news coverage in recent months, including this recent editorial in the Buffalo News, and debate on Capitol Hill. But headlines and debate don't always bring solutions and that seems to be the case here.

The new Social Security Commissioner, Michael Astrue, has testified before the Senate Finance Committee about the disability backlog nightmare. He told Senators he wants to fix the disability backlog on "his watch" and outlined his plan to do it. Social Security News blogged in detail about Astrue's testimony and it's well worth a read.

The average wait for a disability hearing is more than a year, 483 days. That's a disgrace. But while everyone can agree something needs to be done the real question is...is this administration willing to pay for it? There are fewer administrative law judges hearing cases now than in 1997. Is it really a surprise that cutting SSA's budget and staffing has brought us here?