Send tips to Curtis Black, Newstips Editor
curtis@newstips.org
NEWSTIPS HOME | About | Follow on Twitter @ChicagoNewstips


Concern over Medicare, Social Security

Advocates for retirees are “keeping a watchful eye” on tomorrow’s White House summit on fiscal responsibility, said Steve Pittman of the Illinois Alliance of Retired Americans.

Concern has been heightened by mixed messages from the Obama administration and especially by a major effort to reduce retirement and medical benefits by groups warning of an impending “entitlement crisis.”

“It’s a good idea to start looking at a long term plan,” Pittman said. “But if it’s to answer the call of people saying we have to cut back programs like Social Security and Medicare because that’s the only way we will have a sound economy, that’s just flat wrong.”

While President Obama has said Social Security’s long-term shortfalls can be addressed by raising the cap on income subject to payroll taxes, his budget director, Peter Orszag, authored a 2005 plan to raise Social Security taxes and reduce benefits.

And while Orszag emphasizes that Socal Security’s problems are decades away and rising health costs are the immediate issue, many of Monday’s participants have worked to conflate the issues and push Social Security cuts.

Most prominent among them is former Commerce Secretary Peter Peterson, who is spending $1 billion of his Wall Street fortune to convince the public there’s an “entitlement crisis.” He’s been joined by a range of think tanks, including the Heritage Foundation and the Brookings Institute, and backed by a Congressional coalition.

With recent losses of stock market and home values by retirees and people nearing retirement, “there’s no way the solution is to cut health care benefits or the one retirement benefit that people can count on, which is Social Security,” said Pittman.

 It’s the recent experiment in financing employee retirement accounts via the stock market that’s collapsed, he said. “When the individual savings and employee pension legs of the [retirement] stool begin to wobble, you don’t start sawing on the third leg.”

Last week, Roger Hickey of the Campaign for America’s Future told The Hill he’s worried that “in an effort to get bipartisan consensus, the White House could get locked into a path of austerity” and end up cutting benefits.

Orszag told Politico that the next phase of health care reform would involve finding efficiencies in Medicare and Medicaid, in order to encourage broader health cost containment. Politico reported: “Critics see the call for efficiency as easier said than done, and largely a smokescreen for simply saving money for cutting federal payments to doctors and hospitals.”

Sid Bild of the health care task force of Metro Seniors in Action is concerned about “changes that would result in Medicare providing fewer and fewer payments and fewer and fewer services,” ultimately undermining support for the program.

He adds: “The insurance companies and the private health care industry are always looking for the privatization of Medicare.”

Notes Pittman: “If anything, Medicare shows a path forward as we talk about health care reform. You won’t find any plan in the private sector where 98 cents out of a dollar goes to care.”

Indeed, one recent study showed that Medicare has controlled costs much better than private insurers over the past 25 years, and the public Medicare plan is much better than containing costs than privately-operated, publicly-subsidized Medicare Advantage plans.

Bild advocates “Medicare For All,” under which “all the costs would be put under analysis.” Currently Medicare bases payments for services on what’s “usual and customary” in a region; pharmaceutical companies refuse to allow examination of costs, claiming it’s proprietary information, while making “exorbitant claims” about the cost of research, he said.

One huge, immediate saving could be accomplished by eliminating the Medicare Part D drug benefit, which subsidizes private companies, and placing the benefit under Medicare administration, he said. According to economist Paul Krugman, “the unfunded liabilities of Medicare Part D alone are twice those of Social Security.”

Last month Rep. Jan Schakowski introduced a bill that would establish a Medicare-administered drug plan alongside private Part D plans. The bill would also permit Medicare to bargain with drug companies over bulk purchases, which the legislation establishing Part D prohibited.

That would provide a cheaper alternative — many seniors can’t afford Part D, according to Sen. Richard Durbin, who plans companion legislation. And if half of all Medicare beneficiaries signed up, it would save the federal government an estimated $20 billion a year.

Print this Post Print this Post

Category: economy, health, seniors

Tagged: , , , ,

Comments are closed.


Get Newstips in Your Inbox!

Enter your email address:


Subscribe in a reader

Archives

*

*

*



*










CAN TV is a network that belongs to the people of Chicago.  For updates on local programs, and live, timely coverage of community events, sign up at http://www.cantv.org