Trump Poverty Line Proposal Would Hurt Seniors, People With Disabilities

Image: Gary Knight (Flickr Creative Commons)

[Via Center on Budget and Policy Priorities] The Trump Administration is considering whether to use a lower inflation measure to calculate annual adjustments to the federal poverty line. This approach would ultimately hurt millions of seniors and people with disabilities who would lose their eligibility for, or receive less help from, programs to help them make ends meet. Many programs use the poverty line to determine eligibility and benefits and, if this proposal took effect, the cuts to these programs — and the numbers of people losing assistance or receiving less of it — would increase with each passing year.

Rather than continue to use the traditional consumer price index to calculate annual adjustments to the federal poverty line, the Administration is proposing to use a lower measure of inflation such as the “chained CPI.” That would lower the income thresholds to determine whether someone is eligible for a wide variety of federal programs, which in turn would cut or eliminate assistance to many individuals and families.

Take Medicare, which is critically important for seniors and people with disabilities. While Medicare eligibility itself doesn’t depend on income, lower-income Medicare enrollees qualify for federal help to pay their premiums, deductibles, and other cost sharing obligations through Medicaid or the Medicare Low-Income Subsidy (LIS) program. In many cases, eligibility for that assistance is based on the federal poverty line.

After ten years of updating the poverty line using the chained CPI, we estimate that:

  • More than 250,000 low-income seniors and people with disabilities would lose eligibility for, or get less help from, the LIS Program, substantially increasing their prescription drug costs. Most of them would no longer be eligible for the full LIS benefit. Others would lose eligibility for the partial LIS benefit.
  • More than 150,000 low-income seniors and people with disabilities would lose eligibility for a Medicaid program that covers their Medicare Part B premium. That means they’d have to pay premiums out of pocket to maintain Medicare coverage for physician and other outpatient care. The 2019 Part B premium is $1,626 per year ($135.50 per month).
  • Many other low-income seniors and people with disabilities would lose eligibility for a Medicaid program that helps them afford their Medicare deductibles and other cost sharing. Since Medicaid would no longer cover their Medicare hospital or physician cost sharing, they could face a hospital deductible of $1,364, a physician services deductible of $185, and additional co-insurance and copays (based on 2019 program parameters), compared to generally no cost sharing today.

While making it harder for seniors and disabilities to afford health care through Medicare, the proposal would also affect Medicaid eligibility in states that expanded the program under the Affordable Care Act.

Some seniors and people with disabilities would also lose eligibility for SNAP(food stamps), which provides important nutritional support for low-income seniors and people with disabilities living on fixed incomes. For seniors, SNAP participation is linked with reduced nursing home admissions and hospitalization and less frequent skipping of needed medicines. More than one-fourth of SNAP participants have an impairment or disability, so SNAP cuts would inevitably mean more hunger and hardship for people with disabilities.

A number of other programs that assist seniors and people with disabilities also have eligibility limits linked to the poverty level, meaning that some people would no longer be eligible for them (although these programs generally don’t serve all eligible people). These include, for example:

  • The Low Income Home Energy Assistance Program (LIHEAP), which helps low-income people pay their heating and cooling bills. Some 40 percent of LIHEP-eligible households include at least one person aged 60 or older. LIHEAP benefits can help aging seniors and people with disabilities stay in their homes.
  • Weatherization Assistance for Low-Income Persons, which helps low-income households by providing insulation, replacing broken windows, and fixing or replacing heaters and furnaces to make homes more energy efficient.
  • Community health centers, which provide low-cost health care for people who don’t qualify for Medicaid, including seniors and people with disabilities.
  • The Child and Adult Care Food Program, which helps pay for nutritious meals and snacks for seniors and people with disabilities served by adult day care centers.
  • The Senior Community Service Employment Program (SCSEP), the nation’s oldest program to help low-income, unemployed individuals aged 55 and over find work. SCSEP matches eligible older adults with part-time jobs for community service organizations, serving nearly every county in the nation.
  • The Foster Grandparent Program, which engages low-income seniors aged 60 and over in volunteer service to provide supportive, person-to-person service to children with exceptional or special needs.
  • The Senior Companion Program, which engages low-income seniors aged 60 and over in volunteer service to provide supportive, individualized services to help adults with special needs to maintain their independence.
  • Legal Services for the Poor, which provides legal aid to low-income Americans, including seniors and disabilities. For example, the program protects the elderly from being victimized by unscrupulous lenders, and it helps people get and retain disability benefits and Americans with Disability Act protections.

Why pessimism on Social Security could come back to bite Millennials

Why does the word “old” come to mind for so many of us when the topic of Social Security comes up?

Image: Jeff Djevdet via Flickr Creative Commons

Retirement benefits are the biggest component of Social Security. But the program also is very important for disabled people of all ages, as well as surviving children and spouses of deceased beneficiaries. And perhaps most important, today’s young people will need Social Security every bit as much as today’s retirees and near-retirees – and probably more so if current economic trends persist.

Yet many young people have been conditioned to think they should not count on Social Security to be there when their time to retire rolls around. That is not surprising, considering the negative, often false propaganda uttered by politicians hostile to Social Security and the financial services industry, and misleading media coverage.

The danger here is that the current high level of worry over Social Security’s viability could become self-fulfilling if it erodes political support. That would be especially damaging for young people when they retire, argues Peter Arno, an economist at the University of Massachusetts-Amherst, and a scholar of both Social Security and health policy.

Arno points to four trends that suggest millennials will need to rely to a much greater extent on Social Security than current retirees and those approaching retirement now. Millennials will be far less likely to receive retirement income from defined benefit pensions, and they have lower rates of home ownership than earlier generations. And, wage stagnation and crippling levels of student debt make it impossible for many to save for retirement.

“If you add up all these factors, you have a constellation of things that will make it very difficult for young people down the road,” he said. “That’s why Social Security is crucially important for both this generation and younger people. Joining forces between older folks in the boomer generation and the millennial generation offers a tremendous strategic opportunity to bolster the long-term stability of Social Security.”

There’s more! Read the full story on Reuters »

Lawmakers Aim to Keep Social Security Field Offices Open

Congresswomen Gwen Moore (D-WI) and Senator Tammy Baldwin (D-WI). Image courtesy of National Committee to Preserve Social Security & Medicare.

Congresswoman Gwen Moore (D-WI) and Senator Tammy Baldwin (D-WI) are taking concrete action to reduce the number of Social Security field office closures around the country.  They have introduced legislation to make it harder for the Social Security Administration (SSA) to summarily shutter these crucial customer service centers without Congressional oversight and input from local communities.

SSA has closed more than 60 field offices since 2011, inflicting hardship on lower income claimants who can’t easily access the nearest alternate locations. These closings have taken place largely – but not exclusively – in urban areas with minority populations. When an office in Congresswoman Moore’s Milwaukee district serving poor and mostly Hispanic residents was summarily shut down in 2017, she and Senator Baldwin said enough is enough.

“Social Security Administration (SSA) office closures do nothing but create hardship for seniors and other beneficiaries who may struggle to travel long distances or have medical, work, and childcare obligations that make long wait times and overcrowding prohibitive.” – Rep. Gwen Moore (D-WI)

The “Maintain Access to Vital Social Security Services Act,” which Moore originally introduced in the previous Congress and is now paired with Baldwin’s Senate bill, calls for stricter oversight of SSA in the realm of field office closures.

Full story: National Committee to Preserve Social Security and Medicare »

Beware Trump’s Sneak Attack on Social Security

“Chained CPI” might sound technical and boring, but anyone who has closely followed the Social Security debate knows better. It has long been proposed as a deceptive, hard-to-understand way to cut our earned Social Security benefits.

Donald Trump’s recent budget proposal included billions of dollars in Social Security cuts. The proposed cuts were a huge betrayal of his campaign promise to protect our Social Security system. Fortunately for Social Security’s current and future beneficiaries, he has little chance of getting these cuts past the House of Representatives, which is controlled by Democrats.

So Trump and his budget director/chief of staff Mick Mulvaney, who has long been hostile to Social Security, are trying another tactic to cut our earned benefits. They are pursuing a long game to reach their goal. In a divide-and-conquer move, the focus is not Social Security. At least, not yet.

Last week, the Trump administration revealed that it is planning to employ the so-called chained Consumer Price Index (CPI) in a way that does not need congressional approval. “Chained CPI” might sound technical and boring, but anyone who has closely followed the Social Security debate knows better. It has long been proposed as a deceptive, hard-to-understand way to cut our earned Social Security benefits.

Trump plans to switch to the chained CPI to index the federal definition of poverty. If he succeeds, the impact will be that over time, fewer people will meet the government’s definition of poverty—even though in reality, they will not be any less poor. The definition is crucial to qualify for a variety of federal benefits, including Medicaid, as well as food and housing assistance. The announcement was written blandly about considering a variety of different measures, but anyone who knows the issue well can easily read the writing on the wall.

So, what does this have to do with Social Security? Like the poverty level, Social Security’s modest benefits are automatically adjusted to keep pace with inflation. If not adjusted, those benefits will erode, slowly but inexorably losing their purchasing power over time. These annual adjustments are already too low, but they are better than no adjustment at all. The chained CPI would make these adjustments even less adequate.

Read more: Common Dreams

Stop Freaking Out About Social Security

Got any relatives or friends who are freaking out about Social Security? Send them this short and informative video titled…you guessed it: “Stop Freaking Out About Social Security” from At What Cost, Bloomberg’s Facebook Live Show.

Will Medicare Premiums Eat Up Seniors’ 2020 COLAs?

Photo courtesy of AFP

According to a new estimate based on the recent Social Security Trustees report, the Cost of Living Adjustment (COLA) for 2020 will be a scant 1.2%. That’s an increase of about $17.50 in monthly benefits for the average claimant. The same projection says that the Medicare Part B premium will likely rise by $8.80 per month next year. If both estimates prove accurate, the average beneficiary will only receive a net increase of $8.70 per month, which doesn’t buy much these days. As Bernice Napach reports in ThinkAdvisor:

“For recipients collecting $735 or less in benefits, the Medicare Part B premium increase would wipe out their entire COLA. They would have no additional funds to pay for rising costs for health care, housing or other necessities, which is an issue for a growing number of retirees.” – ThinkAdvisor, 5/1/19

If the 2020 COLA is, in fact, 1.2%, it would be the smallest benefit increase since 2017. (At 2.8%, the 2019 COLA was one of the highest of the past ten years.) For three of those years, the COLA was zero.

Of course, the COLA is supposed to cover the cost of inflation from year to year. But under the current formula, the CPI-W (or Consumer Price Index for Wage earners), it usually doesn’t. That’s because the CPI-W does not accurately reflect the inflation rate for the goods and services that seniors spend money on. For example, seniors spend roughly twice as much on medical care as younger adults, but the CPI-W does not take that into consideration. On the other hand, retirees don’t drive as much as working-age people, but the CPI-W fluctuates with the cost of gasoline. If the price at the pump falls, so do seniors’ COLAs.

The National Committee believes it’s time to adopt a better formula for calculating cost-of-living adjustments for retirees: the CPI-E, or Consumer Price Index for the Elderly. The CPI-E is based on retirees’ actual spending habits rather than those of the general population. Costs like food and transportation are de-emphasized, while inflation in housing and medical costs is given greater weight.

Three pieces of legislation have been introduced in the 116th Congress that would implement the CPI-E for calculating Social Security COLAs:

Social Security 2100 Act (Rep. John Larson)
Social Security Expansion Act (Sen. Bernie Sanders)
CPI-E Act (Rep. John Garamendi)

A 2019 study released by the federal General Accounting Office (GAO) found that if COLAs had been based on the CPI-E during the years 2003–2033, by the end of that 30-year period a beneficiary who earned the average national wage would receive $100 (or more) in additional monthly benefits. An extra $100 doesn’t sound like a lot, but think of the expenses it could help cover for seniors living on fixed incomes, including:

  • Utility bills
  • Insurance premiums
  • Medical co-pays
  • Health aides
  • Telephone and internet service
  • Groceries

A more accurate COLA formula would increasingly benefit retirees over time: the larger the benefit this year, the higher it will be the next year when the percentage increase in the COLA is applied. (This is known as a ‘compounding effect.’) Conversely, inadequate cost-of-living adjustments – especially when offset by increases in Medicare premiums – erode seniors’ buying power over time. There is no question: the CPI-E represents a superior alternative for seniors, especially the 50% of retirees who depend on Social Security for all or most of their income.

Cross-posted from: National Committee to Preserve Social Security and Medicare

The Remarkable Mothers of Social Security

Former Secretary of Labor Frances Perkins, left, with Eleanor Roosevelt. (Kheel Center / Flickr)

This Mother’s Day, let’s celebrate the remarkable Mothers of Social Security. Without them, this essential program may never have been born. It certainly would be much less successful and effective.

The Mothers of Social Security pushed for an expansive, ambitious program. When necessary, they fiercely resisted men too cautious to embrace their bold vision. All of us benefit immensely from their work—particularly women, for whom Social Security’s modest benefits are especially important.

Best known of Social Security’s many mothers is Frances Perkins, the first female member of a presidential Cabinet in the history of the country. When President Franklin D. Roosevelt first asked Perkins to become Secretary of Labor, she told him that she would only accept his history-making offer if he agreed to fully support her fight for Social Security, as well as other significant measures to increase all of our economic security. He did. True to her principles and values, she was a driving force behind the healthy start of Social Security, from the system’s conception to its birth and its early growth.

A less-known pathbreaker was Dr. Barbara Nachtrieb Armstrong, the first tenured female law professor in the country. A Ph.D. economist, she taught both law and economics at Berkeley and authored a landmark treatise, Insuring the Essentials, an exhaustive study of social insurance and minimum wage programs around the world.

Armstrong chaired the Roosevelt administration working group that invented Social Security. Other policymakers, concerned about the constitutionality of Social Security, argued that it should be a state-based program. Armstrong successfully convinced them that only a federal program was workable. When those who oversaw her work contemplated dropping Social Security because they feared it was too big a lift, she leaked their plan to friendly journalists whose exposés got Social Security back on track.

Without Armstrong’s bold leadership and keen intellect, Social Security might not even exist at all today. If that sounds hyperbolic, those same policymakers whom Armstrong outwitted later decided to not propose national, guaranteed health insurance. Cautiously, they decided it was better left for the future. Today, we are still fighting for improved and expanded Medicare for All.

There’s more! Read the rest at Common Dreams »