Thursday, December 06, 2012

The fight to save benefits on Social Security, Medicare and Medicaid from Obama's "Grand Bargain"

I'm to the point on the Grand Bargain/Fiscal Cliff show that I'm reluctant to take seriously anything anyone says on Social Security, Medicare and Medicaid unless I know that same person is saying that the benefits on those programs are good things and it would be a very, very bad idea to cut them.

So when I see Linda Bergthold write, "Whatever laws will expire December 31, there will be a solution and at some point we will need to restructure and reform some of our government programs. Which ones? Probably Medicare. Maybe Medicaid. And at some point, although certainly not urgent now -- Social Security," (Is Health Care Part of the "Fairy Dust" Talk About the Fiscal Cliff? Huffington Post 12/05.2012) I'm ready to assume that she's making propaganda for cutting benefits on those programs.

But she actually goes on to explain the problems in cutting benefits on Medicare and Medicaid in a pretty decent way:

We call Medicare, Medicaid and Social Security "entitlements" although this term does recall something akin to Romney's 47 percent idea. Perhaps we should rename these programs. Does everyone who depends on these programs think they are somehow "entitled" to something they don't deserve? We pay into Social Security. We pay for Medicare -- and don't you think we do not. (Medicare Part A may be without premium, but Medicare Parts B and D extract significant premiums from beneficiaries, and the more you make the more you pay for these "entitlements".) Don't even get me started on why we need to attack these programs and gut them. They protect some of the most vulnerable disabled and elderly among us. If you had to look these folks in the eye and tell them they were taking too much and not giving enough back -- good luck if they could reach out and punch you.

So what are the proposals for -- let's call it "saving money" in Medicare and Medicaid? I'm leaving out Social Security since it is not in urgent need of reform at this time. It is solvent until the late 2040s or early 2050s. There are a number of legitimate ways that we can modernize and improve the Medicare program. Many of these proposals are already being implemented as part of the Affordable Care Act.

Raising the eligibility age from 65 to 67 is not one of the best ideas for saving money in Medicare. Sounds like a reasonable idea, right? We are living longer, so why not work longer. Well, it's not quite that simple. Yes, there are savings to the government if people don't depend on Medicare until they are 67 or older. But who ends up paying for health care for people who do not get it from Medicare when they turn 65? It would be the private sector and other programs. If the age limit were to be raised, roughly half of potential beneficiaries would work longer, thus requiring their employers to continue covering them; about 5 percent would remain uninsured. Of the remainder, one-third would seek coverage and potentially subsidies through the state exchanges, which would raise the premium costs for everyone. A Kaiser Family Foundation study estimates that raising the Medicare eligibility age would increase overall premiums in the state exchanges by 3 percent and 8 percent for younger members. And while this increase in eligibility age would net the Federal Government $5.7 billion, it would cost 65- and 66-year-olds $3.7 billion in additional out of pocket costs. [my emphasis in italics]
It's getting increasingly frustrating to see President Obama out there like he was yesterday at the Business Roundtable talking to CEOs about the need for "entitlement reform" with word one about how necessary it is to preserve benefits on Social Security, Medicare and Medicaid. He wouldn't be presenting things that way if he were expecting to make deals that would cut those benefits. The Democratic President should be fighting to protect those benefits, not positioning to making deals to sell out the vast majority of the country that depend on them at some point in our lives.

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