Tag Archives: health care costs

Senator Cantwell protesting U.S. Rep. Paul Ryan budget proposal

From Publicola:

Photo via Publicola

Sen. Maria Cantwell (D-WA) was at a retirement home in Seattle on Sunday to protest U.S. Rep. Paul Ryan’s (R-WI) budget proposal, which: A) scales back Medicare for seniors by giving seniors a fixed $8,000 voucher rather than guaranteed coverage (Cantwell was joined by American Association of Retired Persons Washington) and B) caps Medicaid for poor people.

Cantwell broke it down to the local level: Five hundred thousand soon-to-be seniors in Washington state would have to pay twice as much for health care (she cites the nonpartisan Congressional Budget Office for that stat) and more than 60,000 seniors  would to pay $38 million extra on medication.

In King County, Sen. Cantwell warns, nearly 20,000 seniors would face $9.5 million in higher prescription costs next year.

Both Cantwell and U.S. Sen. Murray (D-WA) and 48 other senators signed a letter to President Obama last week opposing the GOP house plan.

The letter says, in part:

Giving  seniors a voucher of approximately $8,000 … is a reckless and irresponsible way to address the health care needs of older Americans.  And it is an unacceptable means by which to finance tax cuts for those who are earning ten times or more than the retirement income of the average Medicare recipient.

Seniors, who have paid into the system their entire working lives, deserve affordable, secure health coverage upon retirement. According to the Congressional Budget Office (CBO), in the first year of the voucher program, out-of-pocket expenses for seniors would double under the Republican plan to more than $12,500 annually.  For seniors on a fixed income, a doubling of out-of-pocket expenses is simply unaffordable, particularly when the average Social Security benefit is only $14,000 per year.

The Republican budget proposal would not keep pace with the rate of inflation for health care, meaning seniors would pay ever higher out-of-pocket costs.

Social Security is not responsible for federal deficits

From Ten Reasons Not to Cut Social Security Benefits:

Federal budget deficits currently are unusually high, but Social Security bears no responsibility for today’s shortfalls. Keep in mind that the federal government was experiencing budget surpluses at the end of the 1990s, but those quickly were transformed into deficits early in the 2000s because of large tax cuts and increased governmental spending on the wars in Iraq and Afghanistan, as well as homeland security.

The nation’s fiscal situation worsened when the recent economic downturn caused federal revenues to collapse along with taxable incomes and profits, greatly widening budget deficits. Because Social Security continued to collect hundreds of billions of dollars more from payroll taxes than it spent on benefits throughout the decade, however, the program actually reduced overall federal budget deficits far below what they otherwise would have been.

As the graph above shows, the dominant cause of the projected long-term debt problem is not Social Security, nor short-term deficit spending to aid economic recovery, but rather the expectation that health care costs will continue to rise much more rapidly than overall inflation. Projections show that combined Medicare and Medicaid outlays for the federal government will double, from about 5 percent of gross domestic product (GDP) today to about 10 percent by 2030.

Social Security’s expected growth is expected to be far more modest, and much more manageable, gradually rising from the same 5 percent of GDP today to about 6 percent by 2030, as the Baby Boom generation retires.

Throughout that period, the revenues dedicated to the program from payroll taxes and commitments from its large and growing trust funds will be more than sufficient to pay benefits in full until around 2037. At that point, if nothing is done, benefits would have to decline by about a fifth. But even if the Trust Fund is exhausted in 2037, payroll taxes alone at the current level would cover benefits averaging $19,300 ‐‐ about $1,600 more than today’s typical retiree receives (after inflation).