Improving Our Nation’s Retirement Security
In 2007, I led a successful bipartisan effort to improve our nation’s retirement security. Many Americans lack protection from catastrophic long-term care expenses related to chronic illnesses and disabilities. Worse yet, most of these families assume Medicare will pay for long-term care services, while it generally does not. This widespread misunderstanding puts the retirement savings of millions of family caregivers at risk. I’m pleased that the House of Representatives recognized this problem by unanimously passing my bipartisan resolution (H. Con. Res. 133) urging the Bush Administration to be more forthright about costs and coverage limits. This resolution also gained the support of AARP, Families USA, Alzheimer’s Association, National Council on Aging, American Council of Life Insurers, Association of Health Insurance Advisors, and America’s Health Insurance Plans.
South Dakota Congresswoman Stephanie Herseth Sandlin and I were also successful pressuring the Department of Health and Human Services and the Social Security Administration to improve flaws in their public education campaigns. As a result, more than 143 million Americans will receive new information about long-term care coverage and costs through the annual Social Security statements the agency sends each year.
I also joined a bipartisan group of lawmakers and introduced the Long-Term Care Affordability and Security Act. This legislation would expand private LTC coverage by letting workers use cafeteria plans and flexible spending account funds to pay for long-term care insurance.
Challenges Ahead
Social Security has helped to lift millions of seniors out of poverty, while Medicare has improved their access to life-saving treatments. Congress has a duty to protect and preserve these programs for workers and retirees who have paid into them throughout their careers.
The Social Security and Medicare Trustees explain that: “Though highly challenging, the financial difficulties facing Social Security and Medicare are not insurmountable. We must, however, take action to address them in a timely manner. The sooner these challenges are addressed, the more varied and less disruptive their solutions can be.”
The Trustees note that the Medicare program faces a shortfall of $32.4 trillion during the next 75 years, and Social Security faces a shortfall of $6.8 trillion during that same period. The American Academy of Actuaries reports that, without congressional action, the two programs will consume up to 80 percent of the Federal budget by 2040. For more information on this warning, visit http://www.actuary.org/pdf/medicare/trustees_07.pdf.
The Comptroller General David Walker of the Government Accountability Office (GAO) recently launched a “Fiscal Wake Up Tour” in an effort to stimulate grassroots demand for federal action on this issue. For more information visit the GAO’s website at http://www.gao.gov/special.pubs/longterm/wakeuptour.html.
I’m hopeful that both parties in Congress will find the courage to address this issue.
Social Security
While the Social Security benefits of today’s retirees are safe, the Trustees warn that benefits for younger generations will inevitably be cut if Congress does not act. Social Security will begin spending more than it takes in by 2017 and will go broke by 2041, just as workers in their mid-20s begin to retire.
Ignoring this problem only makes the solution more painful for future generations of taxpayers and retirees. We must explore ways to avoid massive tax increases and benefit cuts, provide permanent solvency for the program, stop raiding the Social Security trust fund for spending on other government programs, maintain the program’s important safety net, and improve the current return on Social Security investments.
I also believe Congress should reverse the 1993 Clinton tax on seniors’ Social Security benefits. I was pleased to see the Senate unanimously approved an amendment to the budget resolution that would help to repeal this tax increase on seniors.
Social Security reform should also address the problems caused by the government pension offset and the windfall elimination provision. I’m a cosponsor of H.R. 82, which would amend title II of the Social Security Act to repeal the government pension offset and windfall elimination provisions.
In 2006, Ways and Means Committee Chairman Charles Rangel (NY-15) signed a discharge petition to move the legislation to the House floor. In June of 2007, he expressed new concerns about the bill. I recently wrote Chairman Rangel urging him to maintain his support. I’m pleased that 41 cosponsors of the Social Security Fairness Act signed my letter to the Committee chairman in support of timely help for retired teachers and public employees. A copy of my letter can be found on the Internet at:
http://www.boustany.house.gov/SupportingFiles/documents/RangelSocialSecurityLetter-FINAL.pdf.
I’m pleased that the Ways and Means Committee held hearings on this proposal on January 16, 2008.
Medicare
Evidence indicates that some Medicare beneficiaries already find it hard to find a physician to care for them. A July 2006 report by the Government Accountability Office notes that Medicare “beneficiaries with certain characteristics, such as those in poor health, were more likely, relative to other beneficiaries, to respond that they experienced major difficulty accessing physician services.” MEDPAC, the independent federal body created to advise Congress on Medicare reimbursement, indicates one in four seniors who faced access problems in 2005 said that “their problem finding a doctor was because they were covered by Medicare.”
Medicare law relies on a formula, called the Sustainable Growth Rate, to set annual reimbursements for physicians who treat Medicare patients. The formula required an automatic cut in 2002, which Congress permitted to take effect. In its March 2006 report, MEDPAC called the physician payment formula a “flawed, inequitable mechanism for volume control” and warned it “could threaten beneficiaries’ access to care.” Likewise, in 2003, the Senate unanimously agreed to an amendment calling the formula “fundamentally flawed” and warning of delays in medically necessary care because of its yearly automatic Medicare cuts.
Congress has had to pass legislation to prevent annual automatic cuts from occurring in 2003, 2004, 2005 and 2006. At the end of 2006 and 2007, I worked hard to convince House and Senate negotiators to pass legislation to prevent the cuts. I’m glad that Congress delayed the 2008 cut. That said, I’m troubled that the formula was not changed and concerned about future automatic cuts. Experts at the Congressional Budget Office told my office that unless Congress changes the Medicare physician reimbursement formula, it will require a cumulative Medicare cut of up to $40 billion in seniors’ physician services before 2015. CBO also expects physicians’ practice costs to increase by $218 billion during that period.
I’ll continue working to prevent the cuts and replace the formula with a realistic system that preserves seniors’ access to lifesaving care.
I am always eager to hear from my constituents. If you would like to speak with my staff about Medicare or Social Security legislation, please contact my Washington, D.C. office at 202-225-2031.
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