AARP: Hello and welcome to today's You've Earned a Say live chat! Thank you, everyone, for joining us today!
And thank you all for all the questions that are coming in. We'll try to get to as many as we can.
We're so happy to have David Certner, AARP's legislative policy director, with us today to answer your questions. In March, AARP launched You've Earned a Say, a national conversation about the future of Medicare and Social Security. W're giving people information about the major options on the table in Washington, both the pros and cons, without the political jargon and spin.
If you go to www.earnedasay.org, you'll find an analysis of the major options by experts who represent both sides of the political spectrum. We invite you to read that information and ask us a question about the options today.
Let's get started!
Comment From Michael McCranie: Americans pay the most for drugs of any country in the world. Why is Medicare not allowed to negotiate drug prices?
David Certner, AARP: Thanks for your question, Michael. You are correct that Medicare, by law, is currently prohibited from negotiating drug prices.
AARP has consistently supported legislation that would enable the secretary of the Department of Health and Human Services to use the bargaining power of Medicare’s 48 million beneficiaries to negotiate for lower prices.
AARP believes that leveraging Medicare’s significant buying power can achieve additional savings for beneficiaries, and help save taxpayers money.
Right now, Americans pay among the highest drug prices in the world.
Comment From Wes Thomspon: Would we still have a problem with Social Security if the government would keep their hands out of the till and pay back the money they have taken from the SS trust fund?
David Certner, AARP: Wes, this is a great question that we get a lot.
Social Security can pay full benefits until the trust funds are exhausted in 2033. Even after that time, Social Security can pay about 75 percent of promised benefits for the rest of the century. This assumes that the government pays back all the money it has borrowed from Social Security.
The Social Security trust funds hold about $2.7 trillion dollars of Treasury bonds — some call them IOUs, but most consider them the safest investment in the world. The bonds pay about 4.5 percent interest to Social Security, and similar to any Treasury bondholder, we expect that the government will continue to honor all the bonds and interest income owed to Social Security.
The problem is that the rest of the government has run up large debt, making it more difficult to repay all bondholders, including Social Security. However, we agree Social Security must be paid back and that Social Security should not be cut in order to address the deficit in the rest of the federal budget. It is worth noting that for over 75 years, in good times and bad, Social Security has never missed one benefit payment.
Comment From Guest: Seniors need help now in closing the prescription doughnut hole, not in 2020. Seniors who fall into the doughnut hole have chronic illnesses and do not need to be paying thousands of dollars for their medications a year. The pharmicutical companies are becoming richer and the middle class seniors are being drained of any savings for retirement with the doughnut hole. The seniors in the doughnut holes are the ones saying they can afford either food or their medicine but are struggling with paying for both. For a drug company to charge approximately $3,500 to $4,000 a month for a single medication is unbelievable. Seniors need help by closing the doughnut hole now.
David Certner, AARP: Thanks for the question. We have heard for years from those struggling to pay their drug costs — and several million seniors with Medicare Part D fall into the doughnut hole each year.
But the new law has helped — already in 2012, 1 million people have saved an average of over $600 in drug discounts. And the new law is now gradually closing the coverage gap entirely. Both brand-name and generic drugs are discounted in the doughnut hole.
Also, please ask your doctor and pharmacist about lower-cost drugs that might work for you. With different prescriptions, maybe you can delay reaching the doughnut hole, or avoid reaching it entirely. Use AARP’s “Doughnut Hole Calculator” to help you learn more.
Also, the new health law includes provisions that will help lead to the approval of less expensive generic versions of biologic drugs — such as many cancer treatments — which represent many of the most expensive drugs on the market. You can be sure that AARP will continue to actively work to help lower prescription drug costs.
Comment From Pat Sherr: Is it true Medicare insurance premiums will be $120.20 in 2013 and $247 in 2014?
David Certner, AARP: Thanks, Pat. We've been hearing this one a lot. Reports that current Medicare premiums will double or triple in 2014 are simply not true. Rumors such as these may have been started to scare people.
In 2012, as you may know, the monthly premium for Medicare Part B is $99.90. According to the latest projections from the Medicare Trustees, Medicare Part B premiums are projected to increase by about $15 per month to $115.00 by 2014.
Higher income beneficiaries — those whose incomes exceed $85,000 — do pay higher Medicare premiums.
Comment From Vernon Clark: My question is, I am 50 years old now; why haven't we gone to a system where we could put our Social Security in our own account or saving plan, which would double by the time I'm 65? If I did, then my age group would not rise to 69 or 70, so I could retire at a better healthier age?
David Certner, AARP: Thanks, Vernon. Putting Social Security into private accounts is a risky proposition. As we’ve seen recently, years of savings can vanish quickly and there is no guarantee those savings can be recovered by the time we need them. That is why AARP — and the American public — opposed the effort a few years ago to change Social Security to private accounts.
Social Security is the basis for a secure retirement — it provides a guaranteed stream of income for life, protected from inflation. However, Social Security was not meant to be the only source of income, and we all need to save in addition to Social Security.
Comment From John Sarafian: With a reduced population providing less monies into the Social Security system, it would be essential that we raise the portion of monies that are taxed by Social Security from $96,000 to $250,000 a year. That would extend the coverage period for more than 40 years. Why doesn't AARP take a position on this issue? Also, this week's Sunday Times pointed out the difficulty most people would have trying to manage their own monies over a lifetime for retirement.
David Certner, AARP: Thanks for the question, John. The article you mention raises a great point — accumulating and managing savings in retirement is very difficult to do, and most have not saved nearly enough. This is why Social Security is so important. For most retirees, Social Security is the only income they will receive that is guaranteed for life and protected from inflation. This is likely to become more true as employers shift away from guaranteed pensions.
Raising the tax cap for Social Security (currently $110,100) is one option being discussed in Washington to strengthen Social Security. For example, the Social Security actuaries estimate that raising the tax cap to about $215,000 would close about a third of the long-term funding gap. For more information on this option — including the pros and cons — check out our website at www.earnedasay.org.
Comment From Lynn: The news is saying that Medicare will be busted in just a few years. How are we going to stop that so we can continue to receive our Medicare disability each month? We live on that money each month no matter how much that is ... And just how many benefits will it hurt in the coming years?
David Certner, AARP: Thanks, Lynn. Many people are concerned about the rising cost of health care, whether Medicare will be around for them and what can be done to strengthen the program. The first thing we need to realize is that the health care cost problem isn’t just for Medicare. We see it in the private sector as well for those who are still working.
There are steps we need to take to strengthen the program and hold down costs for health care in general. We can start by focusing on reducing wasteful or unnecessary spending. We need to improve how we manage care, how we share information among doctors and other providers, and what health care decisions we make. The new health law takes a number of steps to move us in that direction. We also need to attack fraud. Which leads to the next question …
Comment From Guest: What safeguards are in place to eliminate waste, fraud and graft in the Medicare system? What else needs to be done in this regard?
David Certner, AARP: The federal government is increasing its efforts to fight waste, fraud and abuse, which costs the Medicare program billions of dollars annually.
Medicare has teamed with the FBI and the Department of Justice to recover billions of dollars for Medicare by looking for suspicious billing patterns that lead to audits, investigations and prosecutions.
Fraud control efforts were enhanced by the new health care law, which added new data mining techniques to identify potential fraudulent activity together with greater authority to weed out and punish fraudulent providers from the Medicare program.
AARP also supports pending bipartisan legislation (Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers' Dollars Act, and the Medicare and Medicaid FAST Act) that would increase penalties for people who illegally distribute Medicare cards, prohibit the display of Social Security account numbers on Medicare cards to reduce the risk of identity theft, and help beneficiaries to detect and report Medicare waste, fraud and abuse.
Comment From Judy Harding: Why is the government allowed to use funds from Social Security for other things? Shouldn't it be protected and used only for SS?
David Certner, AARP: Social Security money can only be used for Social Security. However, since the rest of the budget has run up a large debt, it is harder to pay back all debt — including money owed to Social Security. Many propose to reduce Social Security to make it easier to pay back debt. We think it is wrong to reduce Social Security to address problems in the rest of the federal budget.
Comment From Nancy: Why is there no protection for retirees’ health care prior to Medicare? Companies can drop at will.
David Certner, AARP: Unfortunately, the law does not fully protect employer-provided retiree health care programs, and many employers have chosen to reduce or even drop their benefit promises.
The new health care law, in order to encourage employers to keep these benefits, created a temporary program to help employers with the costs of those benefit programs.
For early retirees not yet eligible for Medicare and without access to retiree health benefits, the new law will also help by preventing insurers from turning them down for coverage due to health problems. And, for the first time, those with modest incomes may be eligible for help with the cost of purchasing their health insurance.
Comment From Guest: I am concerned about the way the payroll tax cut is funded through a reduction in Social Security taxes. This makes the Social Security trust fund dependent on congressional appropriations. Will the AARP be opposing any further extension of this type of tax cut?
David Certner, AARP: We have always insisted that the current payroll tax cut — designed to help the economy — should be temporary and that the Social Security program be made whole so that it has no effect on benefits paid today or in the future. Today, Social Security is being fully reimbursed as the law requires — it is not dependent on congressional appropriations.
But we agree that it is not a good policy to further borrow from Social Security. We have made clear to Congress that we oppose extending this policy because it would begin to erode confidence in Social Security.
Comment From Carol Ann: How do I get started with the preventive care that is mandated in the new health care law? I'd like to be pro-active and work toward getting healthier.
David Certner, AARP: Great question, Carol Ann!
The new health reform law has plenty for people who want to take control of their health and stay healthy!
First, during the first year that you are newly enrolled in Medicare, you are eligible for a Welcome to Medicare wellness visit at no charge to you. During this visit, you will receive a physical examination that will give you and your doctor a sense of your current health status and what you need to work on to maintain your health.
After that, you will be entitled to a checkup every year where you and your doctor can work together to set personal health goals — again, at no cost to you.
Finally, the health reform law allows Medicare beneficiaries to receive many preventive services at no charge. This means that you will not have to meet a deductible or pay any cost sharing when you receive services such as flu shots, mammograms and certain cancer screenings.
We're going to take a question from Dusty on Twitter: How can we keep doctors from leaving Medicare?
One big problem is the Medicare payment rate for physicians. The formula for paying doctors is broken, and it has led to potential big cuts that Congress has had to override every year for the last decade. In fact, doctors are once again facing a big pay cut that Congress must stop by year end. We need to fix the payment formula to ensure a more stable payment rate — one that encourages quality care — and that will help keep doctors in Medicare.
Comment From Ken: The Social Security retirement age should be increased to 67 in two phases. Does AARP support this? If not, why not?
David Certner, AARP: Ken, thank you for your question.
The full retirement age for Social Security is already gradually increasing to age 67 on a schedule set by Congress in 1983. Today it is 66, but it will be 67 for people born in 1960 or later. Increasing the full retirement age further is an option that some have proposed.
Of course, this option raises difficult questions about what to do about people who can’t work longer either because of poor health or lack of employment opportunities. As part of You’ve Earned a Say, we are interested in hearing what you think about this and other proposals. Again, for a more complete discussion of the various proposals that are being discussed in Washington — including the arguments for and against raising the retirement age — check out AARP’s website www.earnedasay.org.
Comment From Linda Rather: What are the most likely things being considered for strengthening Social Socurity and Medicare? Who will make the final decision?
David Certner, AARP: For the last two years, lawmakers in Washington have been talking behind closed doors about the future of Medicare and Social Security. In March, AARP launched You’ve Earned a Say — a national conversation about the future of Social Security and Medicare.
We’re giving people information about the major options on the table in Washington, both the pros and cons, without all the political jargon and spin. If you go to our website, www.earnedasay.org, you’ll find an analysis of the major Social Security and Medicare options by experts who represent both sides of the political spectrum.
You will also find tools that will allow you to choose which options you’d choose to strengthen Medicare and Social Security and the option to share your choices with your members of Congress and the presidential candidates.
We want to make sure that no decisions are made without a national dialogue that listens to and involves the public. As we've said many times, you've earned a say.
Comment From Guest: What can you tell us about the 'means testing' whereby depending on your personal wealth your earned Social Security benefits would be reduced or eliminated. This just simply does not seem fair since you earned the payout during your working years.
David Certner, AARP: Means Testing is an option being discussed in Washington that would reduce Social Security benefits based on a family’s wealth or income. Some folks argue that reducing benefits for the “wealthy” should be part of any changes made to the program to close Social Security’s funding gap.
But you raise a good point — eliminating the benefits of anyone who has paid into the program over their working life violates the principle that these are an earned benefit. For a full discussion of this proposal and others — including the arguments for and against — check out AARP’s website www.earnedasay.org.
Comment From James Straka: For seniors, who is the better choice for president?
David Certner, AARP: Thanks, James. AARP is committed to helping you get the facts you need to choose candidates who reflect your values. We’re nonpartisan — we don’t support or oppose any political candidates or contribute any money to campaigns or political action committees.
Our priority is ensuring you know where the candidates stand before you cast your vote.
AARP creates voters’ guides so you can find out what the candidates are saying, in their own words, on important issues such as Social Security, Medicare and financial security. The Presidential Voters’ Guide will be available in AARP The Magazine from late August through November.
The voters’ guides for other federal candidates will be online in the fall on earnedasay.org.
Comment From Jerrold: Will we be able to download this conversation at the end of the discussion?
David Certner, AARP: Thanks, Jerrold. The transcript will be available in a couple of days.
Comment From Marvin Sands: We've talked a lot here lately about "You've Earned A Say." Now, how are we going to get this message to our members of Congress and let them know how we feel about strengthening these two programs for future generations?
David Certner, AARP: Great question, Marvin.
If you haven’t done so yet, I encourage you to take our questionnaire at earnedasay.org and express your opinion on the future of these vital programs.
On earnedasay.org, you will also find tools that will allow you to choose which options you’d choose to strengthen Social Security & Medicare and then share your choices with your members of Congress and the presidential candidates.
I see we are coming to the end of our time, and I want to thank everyone for the great questions.
AARP: We've reached the end of our hour. Thank you, David, for being with us again today! And a huge THANK YOU to everyone who took the time to submit a question or participate in today's chat!
AARP will keep working to protect and strengthen Medicare and Social Security for today's seniors and generations to come. Remember, go to earnedasay.org to make your voice heard. Together, we can take the debate out from behind closed doors in Washington.
Thank you again. Bye, everyone!
Also of interest: Will Part B rates rise to $247 a month by 2014?