Under a section called “mandatory budget options,” the co-chairs propose to “expand cost-sharing in Medicare to promote informed consumer health choices and spending.” What that means is that seniors will pay more out-of-pocket for their medical care. Simpson and Bowles want to reduce the benefits on the Medigap plans that most seniors buy to help fill the holes in their Medicare benefits. The Medigap plans will cover less, and seniors will have to pay more. As Campaign Desk has pointed out, health reform will already raise the cost of certain Medigap plans. Florida seniors need to read about this stuff from their local papers.
Simpson and Bowles also propose to limit the amount of catastrophic expenses Medicare will pay for. But didn’t the health reform law just eliminate caps for catastrophic expenses? No annual or lifetime limits on coverage, remember? Apparently what’s good for the goose is not good for the gander.
There was something for everyone in the proposals to like or not like—even the idea of resurrecting the public plan option, which was killed off during health reform. Now you know how far that’s going to get. But many of Simpson and Bowles’s ideas will gain traction on the Hill.
If this story stays in Washington, the public loses. These are not issues for the political elites or the K Street gang to decide. The media must make the connection between what’s being discussed in Washington and what that means for the rest of the country. What will these proposed changes do for the family struggling to make a mortgage payment that finds their mortgage interest deduction trimmed back? Or the unemployed man in his fifties with bleak employment prospects now realizing that he must come up with more money for his later years, since he won’t be able to collect Social Security benefits as early as he thought? Or the widow living on a $13,000 average annual Social Security benefit who won’t get a cost-of-living increase to pay for the higher out-of-pocket medical costs Simpson and Bowles have in mind?
Answering these questions calls for some serious dot-connecting—a journalistic tool underused in the Medicare/Social Security conversation.
You say that Bowles Simpson propose instituting a means tax on Social Security benefits. Guess what? There already is one as benefits are taxed for those earning above a threshold and not for those earning below the threshold. Despite your blinders on Social Security, it remains a fact that the increasing numbers of people collecting Social Security (baby boomers plus improved longevity) will be putting a substantial strain on the system which can only be solved by higher taxes, lower benefits, a later retirement age or some combination of those. One can have differing views regarding the right way to solve the problem but one can't pretend the problem doesn't exist or that it shouldn't be dealt with now because the decisions we make today will be dealing with a problem that won't have explosive financial consequences for decades.
#1 Posted by Jerry, CJR on Mon 15 Nov 2010 at 03:37 PM
"You say that Bowles Simpson propose instituting a means tax on Social Security benefits"
Where did she say that?
And the people who are pretending the problem doesn't exist are the people trying to extend the Bush tax cuts
http://voices.washingtonpost.com/ezra-klein/2010/08/how_to_fix_social_security_in.html
while cutting even more upper bracket and corporate taxes like is suggested in the Simpson/Bowles power point policy presentation.
This is by design. It has been since Reagan and Greenspan reformed social security taxes in a way that shifted half of government revenue comes from FICA.
http://www.csmonitor.com/2005/0127/p09s01-coop.html
This is about the rich not wanting to pay their own damned way.
PS. The single biggest driver of future deficits, health care, got a couple of lines of meaningless proposals. "Keep costs down" statements without a description of mechanism or rationale. Simpson and Bowles should be embarrassed that they took months to work on this, with months of secret consultations with supposed experts, and they submitted this ragged doc like it was grade school homework.
Important matters like this shouldn't be framed by people this stupid and unprofessional.
#2 Posted by Thimbles, CJR on Mon 15 Nov 2010 at 07:02 PM
Here is the reality of social security:
http://www.washingtonpost.com/wp-dyn/content/article/2007/10/28/AR2007102801150.html
"Social Security has never been more important to more Americans than it is now. Private pension plans continue to dwindle -- currently covering only about 20 percent of private-sector employees -- and the national rate of savings hovers around zero. We just can't afford to cut Social Security benefits further. There's no way to make up for the loss.
Social Security benefits are vital to nearly all recipients. About a third of the elderly rely on Social Security for 90 percent or more of their income; two-thirds count on it to supply at least half of their income. The program lifts 13 million elderly beneficiaries above poverty.
Without Social Security, 55 percent of the disabled -- and a million children -- would live in poverty. The program is particularly important to women and minorities. It provides 90 percent or more of the incomes of almost half of all unmarried women age 65 and older (including those who are widowed, are divorced or never married), and it is the sole source of income for 40 percent of elderly African Americans and Hispanic Americans.
Social Security is the nation's most effective anti-poverty program. But it's much more than that. For every worker it provides a solid base on which to try to build an adequate level of retirement income. To weaken that foundation would be grossly irresponsible.
The good news is that there's no need to weaken it. We can shore up Social Security for the future without cutting benefits -- or raising contribution rates. The program can be brought into close actuarial balance over the long run with just three revenue-enhancing changes that are desirable in any case:
¿ Gradually increase the maximum amount of earnings covered by Social Security so that the traditional goal -- covering 90 percent of all earnings -- is once again achieved. This change would affect only the 6 percent of earners who make more than the maximum covered amount (now just under $100,000), and implementing the change gradually over the next 20 to 30 years would have only a minimal impact on them.
¿ Allow Social Security to improve earnings by investing some of its assets -- up to 20 percent, say -- in equities, as just about all other public and private pension plans do.
¿ Provide a new source of income by retaining a residual estate tax and dedicating it to Social Security. By 2010, the estate tax will affect only individuals with estates worth more than $3.5 million ($7 million for couples). Dedicating the income from the tax to Social Security would considerably improve the progressivity of Social Security financing as well as increasing revenue."
Medicare, medicaid need reform because the entire health care economy is broken. Social security is not the problem.
#3 Posted by Thimbles, CJR on Mon 15 Nov 2010 at 07:11 PM