Medicare

Slaming Gov Christie on Social Security Proposals

Before the words were out of his mouth the liberal left was geared up to spew out misinformation about his proposals for fixing Social Security and Medicare.  Facebook was inundated with those annoying “ads” supposedly containing the truth accompanied by mindless comments not based on any reality.

You may or may not agree with him, but at least do so based on the facts (and with a reasonable understanding of the status of Social Security and Medicare (visit those categories on this blog for more information). 

The fact is several of his proposals should delight the liberal left because they turn Social Security into a welfare program by charging the wealthy more and giving them less or nothing for their money. Old Bernie Sanders and Liz Warren will be ecstatic😎

None of these proposals are radical right-wing, none will destroy Social Security or Medicare. None will harm any senior, unless you are worried about those earning over $200,000 in retirement.

If you hate Christie because he is fat or because he tried to fix NJ’s public pension system (not very effectively), be my guest, but if you are going to skewer him on Social Security, at least make the effort to get the facts. Social Security and Medicare must be fixed for the sake of all Americans and it won’t be easy, but it will be a lot harder the longer we listen to politicians trying to mislead and do nothing meaningful.

Following are the main points from his speech and you can read it all here which I urge you to do because it provides good basic information on the topic.

Let me be clear. The changes I propose today would not affect seniors currently in these programs or seniors approaching retirement. Let me repeat that: these changes will not affect you, but will save these programs for your grandchildren. Anyone who tells you differently is simply not telling you the truth.

We should and we must ensure that Social Security and Medicare exist to prevent our seniors from falling into poverty. The truth is that the majority of our seniors who need these programs have spent their lives working hard, providing for their families and living within their means. They have earned the right to live out their later years without the fear of poverty. But I am also here to tell you that the fairness we seek must be broad and must be earned. This fairness must cover our hard working taxpayers footing the bills today and must include reforming these programs to ensure their existence today and for future generations.

I’m suggesting that Americans pay into this system throughout the course of their life knowing that it will be there if they need it to support them. So that seniors will not grow old in back breaking poverty. But if you are fortunate enough not to need it, you will have paid into a system that will continue to help Americans who need it most. That is what we have always done for each other through private charity and good government.

This is fair and it is what we must continue to do by changing Social Security.

Let’s ask ourselves an honest question: do we really believe that the wealthiest Americans need to take from younger, hard working Americans to receive what, for most of them, is a modest monthly Social Security check? I propose a modest means test that only affects those with non-Social Security income of over $80,000 per year, and phases out Social Security payments entirely for those that have $200,000 a year of other income.

This would affect less than 2 percent of all recipients, but would contribute to the overall health of the system and recognize that the wealthiest among us don’t need this benefit when it comes at such great cost to our fiscal health and the opportunity to future generations.

We should apply the same concept to Medicare.

Medicare is already means tested to a certain extent, with the 25% of the true premium cost that seniors pay for part B and part D rising on a sliding scale starting at incomes above $85,000 all the way up to 80% cost sharing for those with incomes above $214,000.

We should expand the sliding scale that already exists. Seniors with an $85,000 a year income will pay 40% of premium costs and increasing it to 90% above $196,000 a year.

This increased means testing should apply to Medicare Part D, the drug prescription program, as well. Over the last few years, the prescription drug program has become more expensive than it first was as Democrats in the Senate acted to “close the donut hole”. Higher cost shares for wealthier older Americans in part D can help address that growing cost.

Now, additionally, Americans are living longer and more productive lives today than at any point in our history. This development is an overwhelmingly positive one for our nation and our economy and the retirement system must be adjusted to reflect these new gains in longevity. When Medicare was enacted, a man’s life expectancy in the United States was about 67 years old, and that for a woman was 73. Today, life expectancy in this country is 79 for a man and 82 for a woman.

We need to raise the retirement age for Social Security. I’m proposing we raise the age to 69, gradually implementing this change starting in 2022 and increasing the retirement age by 2 months each year until it reaches 69. I also believe we need to raise the early retirement age at a similar pace — raising it by 2 months per year until it reaches 64 from the current level of 62.

Which means we should do the same for Medicare. We should raise eligibility age at a manageable pace of one month per year, so that by 2040 it would be 67 years old, and by 2064 would be 69 years old.

We should take an additional positive step to encourage remaining in the workforce.

Let’s encourage work by reducing taxes for working seniors through eliminating their payroll tax. Seniors who keep working past the age of 62 have paid their fair share to the government and shouldn’t have to keep paying payroll taxes for Social Security when it won’t really significantly increase the benefits they receive. 

Beyond these concepts, I also believe we must take these additional steps in Social Security, Medicare and Medicaid:

· We need to more accurately measure inflation, while giving seniors 85 or older added protection. Social Security growth should be based on the true growth in the cost of living (a concept economists call chained-consumer price index). To provide added protection for the elderly who are most impacted by fluctuations in consumer prices, a one-time 5 percent increase in monthly benefits will be provided to all beneficiaries when they reach the age of 85.

· For Medicare, the rules for cost sharing– deductibles, caps on coverage, and co-pays, are all over the map. There are different types of deductibles and cost-sharing depending on the type of service provided and where it is provided. We should do exactly what the bipartisan Simpson-Bowles report – a report which President Obama ignored -proposed. Simplify all this by having a uniform single annual deductible of $550, a uniform coinsurance rate of 20%, 5% cost-sharing above out of pocket expenses of $5,500 in a year, and a hard cap of $7,500 a year in cost-sharing. This makes sense to me. It is simpler. It will save money. We should do it.

· Over 65% of Medicaid spending goes to the elderly and disabled. One of the biggest cost drivers in the program is spending on those who are “dual eligible” – that is, eligible for both Medicaid and Medicare. Right now, Medicare provides the basic health care coverage for this population and Medicaid is used to fund co pays, contributions, and gaps in Medicare. I’m proposing if a recipient is going to receive Medicaid for this purpose, then they must receive Medicare coverage through a managed care organization. My state does this, and it saves money. And it is not a partisan issue. California requires the same thing. This should be our national policy.

· We should take the simple step of requiring a small co-pay for Medicaid recipients – something on the order of $10 for a doctor or clinic visit, and $20 for a hospital visit, at least for those Medicaid recipients with incomes above the poverty level. This will encourage better decisions by patients for both their health and the costs of their benefits. We must introduce some economics into the decision-making process. And it is only fair, as most Americans have a co-pay requirement in their private plans.

*** These proposals do not answer every question; they don’t represent everything we can do, but they are much more than anyone has been willing to do in Washington and they begin to tell our people the truth.

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4 replies »

  1. My wife & I contributed the max to 401k, 403b, IRA investments for over 20 years. So now that we have saved for a comfortable retirement, there is a proposal to limit SS benefits to anyone over $80,000 income? We saved while some friends spent on cruises and expensive (we camped) vacations so we would have something extra in retirement. I am very troubled by any plans for means testing which might penalize those of us who saved.

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    • Good point. While his idea would not affect anyone near retirement should it ever become law, think how people saving in the future would change their strategy.

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      • I doubt if the saving strategy would change significantly. The younger generation does not look into the future like most of us did. It is party and spend today, why wait for tomorrow is another day. For the most part, a great deal of these folks will never see what we call retirement. They will be working till their last breath, maybe not full time but some type of work to make ends meet.

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