NRLN President Discusses NRLN ‘Grand Bargain Proposal to Save Social Security and Medicare at Villages Chapter’s Aug. 23 Meeting

Members of the NRLN Villages Chapter were the first to hear NRLN President Bill Kadereit’s presentation on the NRLN’s “Grand Bargain” Proposal to Save Social Security and Medicare for the next 75 years. His presentation was on August 23 in the Lincoln Theater at The Villages Laurel Manor Recreation Center.

Congress blocked payroll tax hikes from 1983 to 2018 (35 years), strangling the life out of the Social Security and Medicare programs. Kicking the can down the road, avoiding new taxes, allowed many politicians to be reelected on a “no new taxes” platform.

By 2034, Social Security’s current $3 trillion in asset reserves will be completely depleted. The program will not go bankrupt because workers and employers continue to pay payroll tax on earned income. However, projections are that benefits would be cut between 17% - 21%.

By 2029, the Medicare trust fund for Medicare Part A Hospital Insurance (HI) will be exhausted. Payroll taxes will only cover about 88% of Medicare Part A (hospital) costs. Unlike Part A, beneficiaries pay premiums for Part B (doctors) coverage. But these premiums account for only 23% of the program’s costs. The rest comes out of the federal Treasury.

The goal of the NRLN’s proposal is to make pertinent financial information about Social Security and Medicare available to seniors and to propose and advocate to members of Congress a nonpartisan view to insure how both programs can remain viable for at least the next 75 years by acting to implement easily understood proposals.

The NRLN Grand Bargain proposal is to close the Social Security and Medicare HI 75-year combined deficit gaps of 3.66%, and help fund federal Medicare B and D, and possibly Medicaid and CHIP obligations by these actions:

• Apply 12.4% rate on earnings over $250,000 in 2019 and tax all earnings once current tax maximum reaches $250,000. Do not provide benefit credit for earnings taxed over $250,000. 2.19%
• Safely invest 40% of Old Age, Survivors and Disability Insurance (OASDI) reserves in equites (phased in 2018-2032) expecting 5.2% real-rate yield. .39%
• Reduce the 2018 $141 billion wrong and improper federal payments, cut pork barreling; stop appropriating funds to unauthorized programs; stop paying billions in subsidies to Medicare Advantage Plan health care insurers but protect Medicare C enrollees from higher open market pricing or loss of benefits if privatization takes effect. Apply the 1st $70 billion of savings to close Medicare HI and Social Security deficits. 1.08%

2.19% + .39% + 1.08% = 3.66%

Savings would be sequestered to protect them from being spent on other federal discretionary programs. Funds would be applied 1st to close the Medicare HI and Social Security combined deficit gaps totaling 3.66% and then be allocated to reduce the Medicare B and then the Medicare D, and then Medicaid and Children’s Health Insurance Program (CHIP) federal obligations.

CMS DESTROYING TRADITIONAL MEDICARE!

The NRLN has been watching with serious concern the actions of the Centers for Medicare and Medicaid Services. CMS is using its “innovation center” to undermine traditional Medicare. It is incentivizing insurance companies that receive billions a year in taxpayer subsidies for their Medicare Advantage plans to compete for beneficiaries in traditional Medicare Part A (hospitals) and Part B (doctors). Last year at least two insurers were sued for cheating to collect $400 million in incentive subsidies. Why do insurers deserve subsidies paid for with our payroll taxes?

The Medicare Modernization Act of 2003 gave birth to the Medicare Advantage program with the idea that privatization would cost less than traditional Medicare. However, the federal government pays more for a participant in an insurance company’s Medicare Advantage plan than it does to provide traditional Medicare for a beneficiary. About 21.4 million people are enrolled in Medicare Advantage plans, with 37.7 million in traditional Medicare.

In its announcement this month CMS is going even further to allow insurance companies to attract Americans turning 65 and lure individuals away from traditional Medicare. CMS expanded how it defines the “primarily health-related” benefits that insurers are allowed to include in their 2019 Medicare Advantage policies. Air conditioners for people with asthma, home modifications, rides to medical appointments, healthy groceries, home-delivered meals, etc. are expected be among the new benefits added only to Medicare Advantage coverage when new federal rules take effect next year. There are no similar new benefits and subsidies for Medicare Part A and B.

Also, CMS has announced that it will increase payments in 2019 to insurers offering Medicare Advantage plans by an average of 3.4% next year, allowing them to offer more benefits. That’s well above the 1.84% bump the CMS initially proposed and higher than the 2.95% increase for 2018.

CMS SUBSIDIES CREATING A “PREMIUM SUPPORT” PLAN

It is highly possible that the actions of the Centers for Medicare and Medicaid Services (CMS) described in the April 11 posting is a deliberate act to privatize Medicare! No action is expected in Congress this year to try to privatize Medicare, but neither has there been any opposition in Congress to CVS paying subsidies to Medicare Advantage insurers and allowing additional benefits to lure those age 65 and older into Medicare Advantage and away from traditional Medicare. However, the CMS subsidies of 2.95% in 2018 and 3.4% in 2019 are affectively creating a “premium support” plan and thus privatization.

A faction in Congress has been trying for years to privatize Medicare, first with a “voucher” plan, and recently with a “premium support” plan. The “premium support” plan is insurance companies’ scam to get federal subsidies that would privatize and completely destroy Medicare. The plan is to refund insurers who would lowball premiums but get to take in huge multi-billion subsidies. The result is that traditional Medicare Part A and Part B will appear less competitive when actually they are a better deal for taxpayers. ELIMINATING MEDICARE ADVANTAGE AND MEDICARE PART A AND PART B IS THE PLAN!

The NRLN believes that the faction who advocates the “premium support” plan and CMS’ subsidies undermining traditional Medicare is wrong. Respond to the NRLN Action Alert by emailing the NRLN’s sample letter, with your thoughts added, to tell your Representative, Senators and President Trump to place a priority on traditional Medicare beneficiaries, not insurance companies who use Medicare Advantage as a “cash cow” and want even larger subsidies offered by a “premium support” plan. Go to www.nrln.org and click on the red flashing icon “Respond to an Action Alert”.

DANGER LURKS: REAL FACTS SENIORS OF ALL AGES NEED TO BE AWARE OF!

Are seniors over age 65 aware that privatization of Medicare is underway now and will implode Medicare A & B plans, making them prohibitively expensive? No!