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AARP to Super Committee: Don’t Cut Medicare, Social Security Benefits

AARP CEO A. Barry Rand sent a letter today to the members of the Joint Select Committee on Deficit Reduction

FOR IMMEDIATE RELEASE:
October 19, 2011

CONTACT:
AARP Media Relations, 202-434-2560, media@aarp.org

AARP to Super Committee: Don’t Cut Medicare, Social Security Benefits

WASHINGTON – AARP Chief Executive Officer A. Barry Rand sent a letter today to the members of the Joint Select Committee on Deficit Reduction, calling on them not to include any cuts to Social Security or Medicare benefits in their proposal. The letter emphasized the critical importance of these programs to older Americans, and outlined how cuts to Medicare and Social Security could dramatically increase health care costs for seniors and reduce the benefit checks they rely on to pay their bills. The letter also outlined proposals to find savings in health care without harming beneficiaries. Excerpts from Rand’s letter follow:

On behalf of millions of members nationwide and all Americans age 50 and older, AARP writes to express opposition to cuts in Social Security, Medicare, or Medicaid benefits – including increased cost-sharing – currently under discussion. Older Americans recognize the urgent need to address the nation’s fiscal deficit and acknowledge the daunting task you face to help put our nation’s finances on a more secure path. But older Americans, across party and regional lines, strongly oppose fast-track cuts to the health care and retirement benefits they have paid into and depend upon.

Social Security

Social Security is currently the principal source of income for nearly two-thirds of older American households receiving benefits, and roughly one third of those households depend on Social Security for nearly all of their income. Today, every dollar of the average benefit of about $14,000 is absolutely critical to the typical beneficiary. Moreover, the Social Security Trust Funds have run a surplus for decades, and as such, Social Security has reduced the past need for additional government borrowing from the public and resulted in a public debt that is less today than what it otherwise would have been. In short, Social Security has not contributed to the deficit, and Social Security benefits should not be reduced for the purpose of reducing the deficit. In particular, while some have discussed reducing Social Security benefits by moving to a chained consumer price index (CCPI), AARP is opposed to adopting the CCPI to reduce the deficit. This is not a small change. The CCPI – which will take over $100 billion dollars out of the pockets of older Americans in the next 10 years alone – will compound dramatically over time, resulting in an annual benefit that is nearly $1,000 lower by the time a beneficiary reaches age 85. As a result, the older and poorer a beneficiary becomes, the larger the benefit cut. In addition, the current index that is used to calculate the cost of living increase already likely under-reports the increased costs experienced by seniors – particularly health care cost increases.

Medicare

Over 47 million older Americans and Americans with disabilities depend on Medicare today. Medicare is the bedrock of health security for these individuals and their families. As legislation is developed to address our nation’s deficit, AARP strongly urges Congress to reject any proposals that would impose arbitrary, harmful cuts to the Medicare program or shift additional costs onto Medicare beneficiaries. The typical beneficiary today, living on an income of roughly $20,000, already struggles to pay for their ever-rising health and prescription drug costs – and nearly 20 percent of their income currently goes to health care costs.

We are concerned about proposals put forth by some policymakers that would shift additional costs onto Medicare beneficiaries. Such cost shifting undermines current and future beneficiaries’ access to quality care; it does not rein in overall health care costs; and it fails to improve health care quality in the Medicare program for current and future beneficiaries. For example, the addition of a home health copay or a copay in the first 20 days of skilled nursing facility (SNF) coverage simply shifts costs onto Medicare beneficiaries and Medicaid, which pays cost-sharing in many cases for dual eligibles…

Similarly, AARP strongly opposes proposals that would increase the age of eligibility for Medicare from 65 to 67. Enacting this policy will increase cost-sharing by individuals who are not yet eligible for Medicare by an estimated over $2,000 per year (many of whom currently lack access to affordable, comprehensive health insurance coverage); will increase Medicare premiums for everyone enrolled in the program; and will increase costs for employers who offer health insurance coverage. In short, coverage will likely decrease, and overall health care costs will likely increase.

Finally, we remain concerned that unless Congress acts by the end of the year, physicians and other clinicians (such as nurse practitioners) who treat Medicare beneficiaries will see their payment rates reduced by nearly 30 percent. Facing this constant uncertainty and dramatic cuts to their payments, there is growing concern that more and more physicians will choose to no longer take Medicare patients, which impacts beneficiaries’ access to care. AARP believes the currently flawed payment system must be reformed, and we urge Congress to enact the longest possible resolution to the SGR problem.

Medicaid/Long-Term Services and Supports

AARP also urges you to avoid arbitrary caps or limits or other harmful cuts to Medicaid that could reduce vital access to care, including essential home and community-based services (HCBS) and nursing home care. Such cuts could put the health and safety of seniors and people with disabilities at great risk, and ultimately cost federal and state governments more. For example, Medicaid cuts could reduce access to much needed, preferred, and cost effective HCBS. Cutting HCBS could result in more people having to go to nursing homes – with average costs of $75,000 per year – leading to a quicker spend down of assets and thus dependence on Medicaid for their long-term care needs.

The letter concludes by highlighting several proposals that would address the root problem of high health care costs, improving the Medicare and Medicaid programs while saving taxpayer dollars. For the complete text of the letter, please contact AARP Media Relations at (202) 434-2560.


AARP is a nonprofit, nonpartisan organization with a membership that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with nearly 35 million readers; AARP Bulletin, the go-to news source for AARP's millions of members and Americans 50+; AARP VIVA, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP.org. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

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PRESS CONTACTS

If you are an AARP member and not with the press, call 1-888-OUR-AARP or email member@aarp.org.

 

If you are a reporter with a media inquiry please contact the AARP Media Relations office: 202-434-2560 or media@aarp.org.

 

Or Follow us on Twitter @aarpmedia.

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