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Senior Citizen Politics

Budget Axe Ready to Strike Social Security, Medicare as President Makes Appeal to GOP

Reports say Obama in agreement on plan reducing Social Security COLA for seniors, cutting $400 billion from Medicare over 10 years

By Tucker Sutherland, Editor

April 5, 2013 – For more than a week there has been a steady stream of rumors, speculation and news leaks indicating White House and Republican negotiators are near agreement on significant changes to Medicare and Social Security aimed at reducing the government’s cost. Reports from major newspapers this morning say the Obama budget will be out next week and it will have cuts to Social Security and Medicare in hopes of winning Republican support.

The lead paragraph by reporter Jackie Calmes in the The New York Times this morning says, “President Obama next week will take the political risk of formally proposing cuts to Social Security and Medicare in his annual budget in an effort to demonstrate his willingness to compromise with Republicans and revive prospects for a long-term deficit-reduction deal, administration officials say.

Big Social Security Cut will be in COLA

CNN says, “For Social Security, Obama plans to propose a switch to a key Republican request called ‘chained CPI,’ which is an inflation formula.”

Using this chained CPI to measure inflation and calculate cost-of-living increases for senior citizens will lower the COLA increases and save the government money over time. Many complain, however, it will sink many seniors further into poverty.


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The chained CPI has been rejected in the Senate and strongly opposed by AARP and other advocates for older Americans.

AARP Senior Vice President of Government Affairs Joyce A. Rogers said, "Reducing the cost-of-living adjustment in this manner would harm seniors, the majority of whom rely on their Social Security benefit as the foundation of their retirement income, and whose health care expenses already outpace inflation. It would hurt veterans who have already sacrificed so much for this country.

“It would hit women especially hard because they typically live longer and rely more heavily on Social Security. And because the chained CPI would cut benefits more with every passing year, people with disabilities – who often rely on Social Security starting at a younger age and therefore for many more years – would suffer from especially deep cuts in benefits over time.”

Medicare Deductibles for A & B to be Merged

Another possible change in Medicare is reported today in The Wall Street Journal by Louise Radnofsky and Janet Hook.

“The concept of merging the deductibles for Medicare Part A insurance, which covers hospital stays, and Part B, which covers doctors' services, is one of the few ideas that appeals to both parties. Seniors who have a serious illness could pay less, but for most seniors, the net effect would be an increase in their out-of-pocket expenses,” they report.

“Senior House GOP aides said it was among the deficit-reduction options the White House and Republicans have discussed in the past. They also said President Barack Obama indicated he was open to the idea when he met recently with House Republicans on Capitol Hill.”

Seniors to Pay Share of Home Care

The New York Times also reported last week that President Obama “proposed that beneficiaries pay something for home health care, which is among Medicare’s fastest-growing and most fraud-prone expenses; people just released from the hospital would be exempted.”

The Times says, “Glenn M. Hackbarth, chairman of the Medicare Payment Advisory Commission, a group of nonpartisan experts that advises Congress, said a combined deductible could increase costs for those who use only doctor and outpatient services — a majority of beneficiaries in any year. It could reduce costs, he said, for the roughly 20 percent who require hospitalization.”

CNN says the President’s plan will cut Medicare spending by $400 billion over 10 years.

Medicaid Appears Safe

President Barack Obama's budget next week will steer clear of major cuts to Medicaid, including tens of billions in reductions to the health care plan for the poor that the administration had proposed only last year, according to The Associated Press/Washington Post

Big cuts in the federal-state program wouldn’t go over too well at a time that Health and Human Services Secretary Kathleen Sebelius is wooing financially skittish Republican governors to expand Medicaid coverage to millions who now are uninsured, reports AP.


Some of this information is reprinted from with permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery. © Henry J. Kaiser Family Foundation. All rights reserved.


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