Healthcare Reform and Closing The Medicare Doughnut Hole
Capitol Hill News Conference on HealthCare Reform and Medicare September 30, 2009
Nancy Pelosi: Medicare is our solemn pledge, a pledge of stability for our seniors. They paid into the system and we want them to get everything they deserve out of it. What we are promising with our new legislation is the following: better benefits, closing the doughnut hole and lowering drug costs, ensuring free preventive care and better primary care. Number 1 is better benefits. Number 2 is guaranteed access to your doctors for our seniors. Eliminating the 21% pay cut your doctor was facing for Medicare reimbursements, ensuring that these doctors will be able to care for our seniors, especially in rural areas. And third, extended financial stability of Medicare.
Extending the solvency of Medicare trust fund for 5 years. Cutting waste, fraud and abuse in Medicare, and re-investing those savings in benefit improvements. And focusing healthcare dollars on care and benefits, instead of overpayments to private insurance companies.
John Dingell: This is the gavel I used when I presided over the House when we passed Medicare in 1965. I want to reintroduce some of the comments that my Republican colleagues were making when I was sitting up in the chair using this gavel. Here is what Carl Curtis, senator from Nebraska, said about Medicare: “It is not needed, it is socialism. It moves the country in a direction which is not good for anyone, whether they’re young or old. It charts a course from which there will be no turning back. It is not only socialism, it is brazen socialism.” Sounds a little like what they’re saying about the health bill that we’re pushing.
Barbara B. Kennelly: I stand here as a senior, absolutely appalled at what I’ve heard all summer. Absolutely appalled. Max Richmond, my vice-president is somewhere here. We have gone around the country and done townhall meetings with members of Congress. And I hear things that are absolutely wrong, and all that din and all that noise doesn’t tell what Speaker Pelosi’s bill does. And so that’s why I am here today, to make sure that seniors understand what is going on right now. And you know, here is the big problem. Seniors think, and they’ve been told, if we don’t have healthcare reform that they can have the status quo. Well, they can’t. Because healthcare costs are increasing. We all know about how much all healthcare costs are increasing.
Martin Heinrich: We know, as you’ve heard before today, that the status quo is unsustainable. American seniors included simply can’t afford to keep paying the rising costs of health insurance, and our seniors shouldn’t have to choose between necessary prescription drugs and paying their utility bills. The house bill does a great deal for seniors. It weighs deductibles and co-pays for preventative care. It improves quality and lowers costs, extending the solvency of the Medicare program, and cracks down on unscrupulous companies who would take advantage of our seniors. Significantly, the bill will reduce and eventually eliminate the prescription drug doughnut hole. There is no issue that I hear more about from my seniors than closing the doughnut hole in Medicare Part D.
Gerry Johnston: I’m Gerry Johnston, and I’m a causality of a medicare doughnut hole. Last year, as I was refilling a prescription, I was told that I owed a hundred dollars. I thought, “They must be mistaken”, since I had been asked to pay that much before. But no, I was told I was in the doughnut hole and if I wanted to get my pain relief for my back, I would have to pay the $100. It was a terrible surprise because I didn’t have room in my budget to pay for the medicine that allows me to manage my chronic back pain. I was torn between going without the prescription and coping with the pain of putting the charge on my credit card, and hoping I could work out something later. I’m glad to be here today to speak for the millions of seniors who understand that we can’t reform Medicare and solve the doughnut hole problem unless we address the healthcare reform bill overall. Most seniors are on fixed incomes, as myself, and don’t have a lot of options when it comes to paying their rising health costs bills. We need reform now. Thank you so much.
SSI or SSDI?
Hi, this is Don Jorgensen again with MySocialSecurityAttorney.com and this… today’s topic is going to be Social Security Disability Benefits, SSDI vs. SSI, what’s best for me?
Now, in order to understand Social Security, or SSI vs. SSDI, let me take a step back. Social Security, everyone knows or most people know about Social Security retirement. What most people don’t know is that there’s a whole other area of Social Security which is for disability. It’s a safety net for society and that safety net is broken up into two different parts. One is SSI Disability and one is Social Security Disability Insurance benefits.
Now, what’s the difference? From a disability standpoint, they’re exactly the same. In other words, the proof required for SSI is the same as SSDI, but the non-medical proof is what they’re different or where they differ.
Let’s start with SSDI or Social Security Disability Insurance benefits. Now, again, we’re not talking about the medical proof, we’ll talk about it in a minute. It’s the non-medical proof that we’re talking about. Read more
Obama’s Blueprint for Change on Social Security and Medicare
Barack Obama: “We can extend the promise of Social Security without shifting the burden on seniors. I think that’s why the best way forward is to first look to adjust the cap on the payroll tax, so that people like me, because I am earning more than $102,000, pay a little bit more and people in need are protected.
And by the way, I think that we should exempt anyone making under $250,000 from this increase. So it will not burden the middle class. 97% of Americans will see absolutely no change in their taxes under my proposal. 97%. What it does allow us to do is to extend the life of Social Security without cutting benefits or raising the retirement age.
Even if we keep Social Security strong for future generations, it’s not enough to help seniors who are struggling with the cost of everything from gas to groceries, because we know that rising costs are hardest for folks on fixed incomes. That’s why I want to make retirement more secure by eliminating the income tax for retirees who are making less than $50,000 a year. This would completely eliminate income taxes for 7 million seniors.
If a company goes bankrupt workers should be a top priority and not just an afterthought. So as President, I’ll limit the circumstances when retirement benefits can be cut and increase the wages and benefits that workers can claim in bankruptcy court. We’ll require companies to disclose their pension fund investments. We’ll put an end to the outrage of executives getting bonuses while workers watch pensions disappear, and we’ll make sure that no American goes bankrupt just because they get sick.
75 million working Americans today don’t have the employer-based retirement plans that the previous generation counted on. And that’s why I’ve proposed an automatic workplace pension. There’s going to be no red tape or complicated forms. Employers will provide a direct deposit of a small percentage of each paycheck into your account. You can add to it or you can opt out of it at any time.
Medicare is not allowed to negotiate. That makes no sense, that’s why some people are getting hit with this doughnut hole where after a certain amount of medication they suddenly have to pay out of their pocket. That’s not fair to seniors, it’s made a lot of profits for drug companies. We’re going to change it when I am President of the United States.”
Reform Medicare And Social Security To Keep Our Promise To Seniors – Senator John Cornyn
Senator John Cornyn: “While we know we’ve been spending in Congress at an unprecedented pace and have a deficit of $1.8 trillion, as bad as that is, that’s not the whole story. What we’ve heard from the trustees of Medicare and Social Security is that Medicare will basically be out of cash by year 2017 and we know that there are $67 trillion in unfunded liabilities. That’s why I believe we need to roll up our sleeves and get to work and reform Medicare and Social Security, so we can keep the promise we made to seniors that it would be there and be financially viable when they retire.”
Barbara Kennelly on Social Security and Medicare Trustees Report
News Anchor: Joining us now with her reaction is Barbara Kennelly, the President and CEO of the National Committee to Preserve Social Security and Medicare. She is a former Congresswoman from Connecticut who is a ranking member of the Social Security sub-committee and a former counselor to the Social Security Administration.
Miss Kennelly, welcome to Bloomberg news, and Lindsey’s report painting a very dire picture. The trustees saying that Social Security fund would be depleted by 2037.
Barbara Kennelly: Well Earl, first of all, all this reporting on Social Security is dire. The fact of the matter is that last year the trustees said that Social Security could pay full benefits to 2041. Now they’re saying 2037. Would you notice that that’s three decades away? The whole program has been planned for the long term to have these kind of economic cycles going up and down. In the 1990s Social Security could only pay up to 2000 say. But no, Social Security is not going bankrupt. Social Security has a surplus. It can pay full funding till 2037, that’s what the trustees are going to tell you. And then after that…
News Anchor: Where is the disconnect between what you’re saying and some of the things that Lindsey was telling us over in that report?
Barbara Kennelly: Well, Lindsey is reporting as people report and say, “Hey, the number went from 2041 down to 2037″. And yeah, that is a drop and are we surprised? No, we have a recession. Are we surprised that tens of thousands people have been laid off and are not paying into the payroll tax. But the Social Security program has been designed specifically to have these economic going up and going down. I was on the committee in 1983 the last time we reformed it. We raised the payroll tax, we raised the age because we knew the baby boomers were coming.
So no, Social Security is not going bankrupt. Do we have a problem right now? We have a fiscal problem. We’ve got a deficit problem. We don’t have a Social Security problem because we have that surplus. Think of the good years we had in 2005, 2006, 2007, 2008. So much more money was coming in to Social Security from payroll taxes than was going out. That built up the surplus. So that’s the base we have right now. That’s why we can go up to 2037 and say Social Security can still pay its benefits. Read more
Do you worry about your Social Security and Medicare?
TV Interviewer: Are you worried about your Social Security and Medicare?
Man1: Not particularly, because the risk of insolvency may seem a bit closer today than yesterday, but I have faith that the government can enact reforms to force through all that.
Woman 1: Absolutely.
TV Interviewer: How so?
Lady1: I don’t think it’s going to be there by the time I retire.
Man 2: A little, I won’t say a lot because I am sure that there will be some resolution to it.
Man 3: I wouldn’t say worried, I’m just not confident I am going to receive it. I am making other plans, that’s why I am not worried.
TV Interviewer: Would you prefer to see an increase in taxes or reduction in benefits to help solve this problem?
Man 4: Realistically I think it is going to have to be a combination of both. That the Americans that can most afford it need to have their benefits reduced, and perhaps the tax rates and some of the income levels that… like hedge fund managers that get theirs at a reduced rate of taxation… maybe should pay the full rate of taxation and Social Security.
Man 5: The reduction in benefits is probably going to be more feasible. I don’t know which, they’re both not a very good solution but, you know, of those two that’s the one I would prefer.
Woman 2: I think unfortunately an increase in taxes is the only answer.
Man 6: Probably a combination of both. Some decrease in benefits and some increase in taxes to pay for it. That’s seems to me like a reasonable solution.
TV Interviewer: Do you think we should revisit the idea of privatizing Social Security?
Lady 3: Ha, ha, ha. I don’t think we should revisit the idea of privatizing anything. The era of privatizing, of taking the responsibilities of government and farming them out to the lowest bidder who winds then jacking up the prices on the private citizen is just outrageous.
Man 7: Yes, I do think that despite the fact that the Bush plan was based on the assumption that stock markets would always rise, which turns out not to be the case, a system more based on individuals makes more sense.
Lady 4: Look what we’ve done on Wall Street and look at the mess we are in now. I don’t think giving it to individuals will help the situation any better.
Man 8: It hasn’t worked so well with the government so maybe we should give privatization a try.
What about our readers? Do YOU worry about your Social Security and Medicare? Post your comments below.
Geithner Reacts to Social Security and Medicare Crisis
Timothy Geithner: “The Social Security and Medicare Boards of Trustees met this afternoon to complete their annual financial review of the programs and to transmit their Reports to Congress. I welcome my fellow Trustees. I also want to acknowledge the hard work and dedication of the chief actuaries, Stephen Goss and Richard Foster.
For generations, tens and tens of millions of Americans have been able to count on Social Security and Medicare as guarantees that they will be able to live out their senior years in economic dignity and with health security.
This year’s Trustees Reports once again reminds us that the longer we wait to address the long-term solvency of Medicare and Social Security the sooner those challenges will be upon us and the harder the options will be. The earlier we as a nation commit to working together to make the difficult but achievable changes needed to strengthen the solvency of Medicare and Social Security, the more we give the American people time to plan and adjust and the sooner we will be able to ensure that these vital programs will be as important for generations to come as they are now.
That is why even as this President has focused on pulling our nation out of economic recession, he has made clear his commitment to working in a bipartisan way to address the long-term health of Medicare and Social Security. The President deeply understands that re-establishing fiscal responsibility as well as the strength of these two vital programs is essential to the economic and health security in our nation and to our generational responsibility to invest in our children and not simply pass on our debts.
The Medicare Trustees Report makes clear today there is no more important long-term fiscal policy measure than gaining control of the growth of Medicare costs by delivering health care services more efficiently. These savings can only be achieved in the context of a larger effort to control health care costs and improve quality more generally. The most effective entitlement reform measure will be a major health reform that helps bring down the growth rate of national health care spending. The Administration is committed to working with Congress to find ways to control runaway growth in both public and private health care expenditures while helping to ensure that all Americans receive the high quality, affordable health care they deserve. The recent commitment of major health stakeholders to help lower the annual growth rate in costs by 1.5% represents a crucial step in that direction.
The Trustees Reports come to the following conclusions.
- The Medicare program’s financial challenges are larger and more imminent than those of Social Security. Medicare faces demographic challenges, rapidly growing health care costs and the short-term outlook has been hurt by the recession. Medicare’s annual costs were 3.2 percent of GDP in 2008, or nearly three-quarters of Social Security’s, but are projected to surpass Social Security expenditures in 2028 and to reach 11.4 percent of GDP in 2083, compared with 5.9 percent for Social Security.
- Medicare’s Hospital Insurance Trust Fund is projected to become insolvent in 2017, two years earlier than projected in last year’s Report.
- The cost of Medicare’s Supplementary Medical Insurance (SMI) to the federal government is projected to increase rapidly. General revenue financing for SMI is expected to increase from about 1.3 percent of GDP in 2008 to over 4.7 percent in 2083, with continued increases beyond 75 years.
- This year’s Social Security Report projects that the Trust Fund will be exhausted in 2037, four years earlier than the Trustees projected last year. This change is primarily due to the economic recession, recent data that prompted a small downward adjustment to the projected level of real GDP after the economy recovers and the fact that our citizens are on average projected to live longer lives. Nevertheless, Social Security can continue to pay full benefits for nearly 30 years, and cover approximately 75 percent of scheduled benefits thereafter.
Despite projections that Social Security can continue to pay full benefits for nearly 30 years, the sooner action is taken the more options for reform will be available and the fairer reforms will be to our children and grandchildren.
To ensure that these critical programs are there for future generations, the President and his Administration are taking the following steps.
First, we are intently focused on bringing the current economic and financial crisis to an end and getting on with recovery. The return of robust growth will help solve some–but by no means all–of the financial problems of Social Security and Medicare.
Second, we are reforming the health care system to get costs under control and improve quality, which will strengthen the Medicare program and improve the long-term fiscal position of the U.S. government. Just yesterday, the President worked with major health care providers to secure a commitment to reduce costs of care by more than $2 trillion dollars. These voluntary efforts will complement the President’s efforts to enact comprehensive reform to assure quality and affordable health care for every American. The Administration is committed to working with Congress to find ways to control runaway growth in both public and private health care expenditures while ensuring that all Americans receive the high quality, affordable health care they deserve.
Finally, after we have passed health care reform that puts our nation on a path to lower growth in health care costs and expanded affordable coverage, this President will work to build a bipartisan consensus to ensure the long-term solvency of Social Security. The President explicitly rejects the notion that Social Security is an untouchable politically and instead believes there is opportunity for a new consensus on Social Security reform.
The steps that the Administration is taking towards comprehensive health care reform, toward economy recovery and toward deficit reduction will all help preserve Social Security and Medicare for future generations. And they will help produce a more balanced and sustainable growth that improves the lives of all Americans, both working and retired.”
Real Estate Investors Pay No Social Security and Medicare Taxes?
“Now, what about Social Security and Medicare taxes? Well, my friends, we don’t pay those either, ever. Why? Because those are ignorance taxes. You see, what do I mean by ignorance taxes? You have to pay to be ignorant enough to have a job to pay earned or to pay ignorance taxes. Social Security and Medicare are taxes that were derived by the US government because it realizes the people were ignorant enough to believe that if they can work for the rest of their lives and ignorant enough to believe that they are going to have health insurance the rest of their lives, not realizing that someday along the way, like with everybody as you get older, there are people out there that are younger, they are better educated, they are more motivated, they work for less money, and they are going to take your job.
And when that happens, when you’re pushed out of your job at some elderly age, you’re going to realize for the first time that you have no passive strings of income and you’re going to be in trouble.
You’re also going to find out that your insurance policy is getting away and that’s going to be a problem because now, it’s hard for you to get insurance as an older person, especially unemployed, let alone the thought of paying for it.
So, my friends, they created something called ignorance taxes, which is this social safety net for people to fall on when they become old and unable to work and unable to obtain insurance. We call this Social Security and Medicare.
Now, why do they not tax real estate investors? Because they realized that if you’re smart enough to figure out how to make passive strings of income that you don’t have to work for, that you’ll never lose a job that you don’t have, and that the income you earn is going to continue to come whether or not you’re old or young and so you’re going to be able to afford to buy health insurance and not have to cancel your health insurance policy when you lose your job. Read more
Can you get help paying your Medicare premiums?
Interviewer: When to switch to Medicare? Is it true that if you have low income, you can get help paying your Medicare premiums?
Ken Hess: This one is more important to a broad range or larger numbers of clients than most people realize, because it’s not that you have to be eligible for SSI to just get some help. Even if your income and resources are higher than the limit for SSI, if you need help and you’re having trouble paying your medical bills, like that $96.40 per month that comes out for Medicare, talk to the people at Social Services. See if they might be able to get you on the medicare savings plan that would help to have the state pay that premium for you. And then your Social Security check would be higher.
Well, there are a lot of these programs out there and the only way to find out if you qualify is to check with agencies like Social Services, or tribal services. And also there is a national health program for individuals that might be eligible for the prescription drug help. All you do is go to our website and there we’ve got a prescription drug help section, and just go ahead and fill out the application. Nothing bad will happen if you don’t quality, but if you do quality then you could get some extra financial help.
Interviewer: They would pay anybody with low income than to really check into this Medicare thing. There could be help…
Ken Hess: Oh absolutely, and that’s a great one in that if you go right to that website you can do the application for the extra help yourself, or if you’re taking care of someone else… I was just at a senior fair and a lady was talking about help for her mother, who is in a nursing home. And we came upon the fact that the lady had not helped her mom fill out for the stimulus payment, and so right off the back that was $300 that she was able to go to www.irs.gov and print the forms to file a tax return for 2007 so as to get her mother qualified for that stimulus refund, and since the mom has limited income and resources, she will go to www.SocialSecurity.gov and apply to see if she is eligible for the extra help for paying prescription drug expenses. And for the extra help for medicare talk to somebody from Social Services.
Interviewer: Okay, thank you.
Signing Up For Medicare Drug Coverage
Interviewer: When can I sign up for my Medicare drug coverage?
Ken Hess: Well, for Medicare drug coverage, if you get to be age 65 or if you’re disabled and you’re offered Medicare after being on benefits for two years, you can apply for your prescription drug coverage also.
Now, we ask that people contact us two months ahead of time. So, if you’re turning 65 in January it would be good to contact us in November or as early as October, at the very earliest. Now, it’s not that we need that much time to get people signed up, but we need the time to get the information over to the Medicare agency for them to print the card and send you out the package of enrollment information. That takes a little while, so give us a little time.
Stop in and see us before age 65 to apply for your Medicare coverage, and then when you want a prescription drug coverage, you can then take your receipt to an insurance agent and deal with them about applying for the prescription drug coverage. And, if you need help from the government in paying your prescription drug premium and deductibles, you can work with us at Social Security about applying for the extra help in paying for premiums.
Now, the extra help program is for people who meet the income requirements, so you have to have limited income and resources, but it’s very simple process to go through the application and to apply for that. So, work with us as at Social Security on applying for the extra help program when you start the process of getting your Medicare started.
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