Woonsocket Call

A bi­par­ti­san re­tread needed to en­sure sol­vency of So­cial Se­cu­rity, Medi­care

- Herb Weiss, LRI’12, is a Paw­tucket writer cov­er­ing ag­ing, health­care and med­i­cal is­sues. To pur­chase Tak­ing Charge: Col­lected Sto­ries on Ag­ing Boldly, a col­lec­tion of 79 of his weekly com­men­taries, go to herb­weiss. com.

On June 5, 2018, the So­cial Se­cu­rity and Medi­care trus­tees re­leased their an­nual re­port to Congress pro­vid­ing a snap­shot of the long-term fi­nan­cial se­cu­rity of Medi­care and So­cial Se­cu­rity – two of the na­tion’s large en­ti­tle­ment pro­grams. It was not good news for law­mak­ers, nor for the 67 mil­lion peo­ple who re­ceive re­tire­ment, or dis­abil­ity ben­e­fits from So­cial Se­cu­rity and for 58.4 mil­lion on Medi­care.

The 2018 So­cial Se­cu­rity Trustee’s Re­port to Congress, pre­pared by non-po­lit­i­cal ac­tu­ar­ies and econ­o­mists, warned that the com­bined as­set re­serves of the Old-Age and Sur­vivors In­surance and Dis­abil­ity In­surance (OASDI) Trust Funds are pro­jected to be­come de­pleted in late 2034, as com­pared to last year’s es­ti­mate of early 2035, with 77 per­cent of ben­e­fits payable at that time. The DI Trust Fund will be­come de­pleted in 2032, ex­tended from last year’s es­ti­mate of 2028, with 96 per­cent of ben­e­fits still payable.

As to Medi­care, the Medi­care Trustee’s Re­port pre­dicted that the Medi­care hospi­tal pro­gram will not be able to pay full ben­e­fits in 2026. The Trus­tees, for a se­cond year in a row, is­sued a Medi­care fund­ing warn­ing due to gen­eral rev­enue fund­ing ex­pected to ex­ceed 45 per­cent of to­tal Medi­care out­lays within seven years, trig­ger­ing a re­quire­ment for the Pres­i­dent to sub­mit to Congress in 2019 leg­is­la­tion to ad­dress warn­ing to be con­sid­ered on an ex­pe­dited ba­sis.

Re­leased re­port trig­gers dis­cus­sion on So­cial Se­cu­rity, Medi­care sol­vency

Me­dia across the coun­try re­ported the So­cial Se­cu­rity and Medi­care trus­tees warn­ing about long-term fi­nan­cial is­sues fac­ing So­cial Se­cu­rity and Medi­care. Just read the New York Time’s head­line: “Medi­care’s Trust Fund is Set to Run Out in 8 Years. So­cial Se­cu­rity.” Here’s CNN’s take: “So­cial Se­cu­rity Must Re­duce Ben­e­fits in 2034 if Re­forms Aren’t Made.” Or take a look at the New York Daily News’ at­ten­tion-grab­bing head­line, “So­cial Se­cu­rity and Medi­care Head To­ward the Skids.”

With the re­lease of the 2018 An­nual Re­port, the pow­er­ful House Ways and Means Com­mit­tee Chair­man Kevin Brady (R-Texas), called for en­sur­ing the fi­nan­cial sol­vency of So­cial Se­cu­rity and Medi­care. “The time is now to come to­gether in a bi­par­ti­san man­ner to ad­dress these real chal­lenges,” he said.

Health Sub­com­mit­tee Chair­man Peter Roskam (R-Illi­nois) also gave his two cents.

“The Medi­care Trus­tees paint an even bleaker pic­ture than last year, point­ing to the need for com­mon­sense re­forms to en­sure this crit­i­cal safety net pro­gram con­tin­ues to de­liver health care to our na­tion’s se­niors and in­di­vid­u­als with dis­abil­i­ties,” said Roskam. “The so­lu­tions are not elu­sive as was demon­strated in part ear­lier this year when Congress acted on key Medi­care re­forms con­tained in the Bi­par­ti­san Bud­get Act of 2018 to im­prove ac­cess and qual­ity in the Medi­care pro­gram, but more work re­mains to be done. This warn­ing from the Trus­tees is a sober­ing marker of the work ahead to en­sure this pro­gram is around for our chil­dren and grand­chil­dren,” he said.

Look­ing at the glass half full, not half empty

Even with the bleak find­ings, the Na­tional Com­mit­tee to Pre­serve So­cial Se­cu­rity and Medi­care and other ag­ing ad­vo­cacy groups have their take.

Max Richt­man, pres­i­dent and CEO of the Na­tional Com­mit­tee to Pre­serve So­cial Se­cu­rity and Medi­care (NCPSSM), notes the re­leased An­nual Re­port con­firms that the So­cial Se­cu­rity’s trust fund is “still very much in­tact, with $2.89 tril­lion in as­sets – or $44 bil­lion more than last year.”

There is still time for So­cial Se­cu­rity fixes, says Richt­man. “The Trus­tees have con­firmed that Congress has am­ple time (16 years) to en­act mod­est and man­age­able changes to So­cial Se­cu­rity to ad­dress the fis­cal short­fall. Most Amer­i­cans agree that rais­ing the pay­roll wage cap is the eas­i­est and most ef­fec­tive way to strengthen So­cial Se­cu­rity’s fi­nances, negat­ing the need for harm­ful ben­e­fit cuts like means test­ing or rais­ing the re­tire­ment age,” he said.

Ac­cord­ing to NCPSSM, since 2013 there has been a grow­ing num­ber of ag­ing groups (along with Demo­cratic law­mak­ers) call­ing to lift the wage cap and in­crease So­cial Se­cu­rity ben­e­fits. The Wash­ing­ton, D.C.-based NCPSSM’s Boost So­cial Se­cu­rity Now cam­paign en­dorses leg­is­la­tion in Congress in­tro­duced by Sen­a­tor Bernie San­ders (I-Ver­mont), Rep. John Lar­son (D-Conn.) and oth­ers, which keeps the So­cial Se­cu­rity Trust Fund sol­vent well into this cen­tury, while boost­ing ben­e­fits and cost-of-liv­ing ad­just­ments (COLAs).

On Medi­care, the Trus­tees Re­port shows that the Part A Trust Fund will be able to pay full ben­e­fits un­til 2026, at which point pay­roll taxes are es­ti­mated to be suf­fi­cient to cover 91 per­cent of ben­e­fits – if noth­ing is done to bol­ster the sys­tem’s fi­nances, says Richt­man, not­ing that NCPSSM sup­ports sev­eral mea­sures to keep Medi­care fi­nan­cially sound, in­clud­ing a gen­uine push to al­low the pro­gram to ne­go­ti­ate drug prices with phar­ma­ceu­ti­cal com­pa­nies.

NCPSSM calls for restor­ing re­bates the phar­ma­ceu­ti­cal com­pa­nies for­merly paid the fed­eral govern­ment for drugs pre­scribed to “dual-el­i­gi­bles” (those who qual­ify for both Medi­care and Med­i­caid), in ad­di­tion to in­no­va­tion in the de­liv­ery of care and in the way, care is paid for – to keep Medi­care fis­cally sound for fu­ture ben­e­fi­cia­ries.

AARP CEO Jo Ann Jenk­ins urges Congress to work “in a bi­par­ti­san man­ner to strengthen these vi­tal so­cial in­surance pro­grams to en­sure they can meet their ben­e­fit prom­ises for cur­rent and fu­ture gen­er­a­tions.” She agrees with Richt­man about the need to rein in ris­ing Medi­care phar­ma­ceu­ti­cal costs. “In par­tic­u­lar, we need to take fur­ther steps to lower the cost of health care, es­pe­cially the ever-ris­ing price of pre­scrip­tion drugs. No good rea­son ex­ists for Amer­i­cans to con­tinue pay­ing the high­est brand name drug prices in the world. High-priced drugs hurt Amer­i­cans of all ages, and se­niors, who on av­er­age take 4.5 med­i­ca­tions a month, are par­tic­u­larly vul­ner­a­ble,” she said.

Nancy Alt­man, pres­i­dent of So­cial Se­cu­rity Works and the chair of the Strengthen So­cial Se­cu­rity Coali­tion, calls for strength­en­ing and ex­pand­ing So­cial Se­cu­rity not cut­ting it.

The So­cial Se­cu­rity pro­gram is “fully af­ford­able,” says Alt­man, not­ing that “poll after poll shows that the Amer­i­can peo­ple over­whelm­ingly sup­port ex­pand­ing the pro­gram’s ben­e­fits.”

Politi­cians are lis­ten­ing, too, she said.

“So­cial Se­cu­rity is a so­lu­tion to our loom­ing re­tire­ment in­come cri­sis, the in­creas­ing eco­nomic squeeze on mid­dle-class fam­i­lies, and the per­ilous and grow­ing in­come and wealth in­equal­ity. In light of these chal­lenges and So­cial Se­cu­rity’s im­por­tant role in ad­dress­ing them, the right ques­tion is not how we can af­ford to ex­pand So­cial Se­cu­rity, but, rather, how can we af­ford not to ex­pand it,” says Alt­man.

It’s time for a bi­par­ti­san fix

As the mid-term elec­tion ap­proaches, it’s time for the Repub­li­can con­gres­sional lead­ers to work with their Demo­cratic col­leagues to craft bi­par­ti­san leg­is­la­tion to make per­ma­nent long-term fixes to So­cial Se­cu­rity and Medi­care to en­sure these pro­gram’s fis­cal sol­vency for fu­ture gen­er­a­tions.

It is pro­jected roughly 10,000 Baby Boomers will turn 65 to­day, and about 10,000 more will cross that thresh­old ev­ery day for the next 19 years. By the time the last of this gen­er­a­tion ap­proaches re­tire­ment age in 2029, 18 per­cent of the U.S. will be at least that age, re­ports the Pew Re­search Cen­ter.

With the gray­ing of Amer­i­can, the hand writ­ing is on the wall. With the re­lease of this year’s re­port by the So­cial Se­cu­rity and Medi­care trus­tees, Congress must de­ci­sively act now to en­sure that So­cial Se­cu­rity and Medi­care are strength­ened, ex­panded and ben­e­fits not cut. As Chair­man Brady, of the House Ways and Means Com­mit­tee, says, it is now time to ad­dress these real chal­lenges. Hope­fully, his House col­leagues and law­mak­ers in the up­per cham­ber will agree.

 ??  ?? HERB WEISS
SE­nior BEAt
HERB WEISS SE­nior BEAt

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