Paul Ryan and Republican Assault on Medicare Would Unravel the Value of Social Security Benefits
Amidst the furor over Rep. Paul Ryan’s new budget proposal, advocates for strong retirement programs appear to be in a bind. On one hand, Ryan subjects Medicare and Medicaid to scathing cuts and a restructuring agenda so radical that they could no longer be called real insurance for America’s workers. On the other hand, on a welcome note for Social Security advocates, the budget largely bypassed direct cuts to Social Security (though it did propose some dangerous fast-track procedures for ramming through future cuts). So, is it time for at least half a well-earned Hurrah?
As it turns out, not so much. To see why the Republican plan not only violates the promise of Medicare but also of Social Security, we have to zoom out and consider the overarching goal of both these programs. Though passed in different eras, each aims to provide a certain level of economic security for seniors. And they have been wildly successful: Social Security keeps 20 million Americans out of poverty, while Medicare has improved life expectancy and access to life-saving medications across-the-board. Both of these programs are designed to avoid the horror stories of seniors having to choose between food and prescription drugs, skip family visits, or forego things that make for a decent life.
The Ryan plan’s omission of direct cuts to Social Security is no doubt a victory for the program’s advocates, whether it was due to sober electoral considerations (polling shows the vast majority of Americans strongly oppose benefit cuts) or the messaging efforts of progressive coalitions like the Strengthen Social Security Campaign. But that progress would be instantly negated if Ryan’s cuts to Medicare are enacted, since people would be forced to reallocate their Social Security income (the part that isn’t already dedicated to fixed expenses – food, mortgage payments, etc.) towards medical expenses, which can’t exactly be skimped on. Grandma, can’t that knee replacement wait until next month?
These cuts amount to a direct assault on the purchasing power of Social Security – as well as any other source of retirement savings a person has amassed. The government may as well send seniors their Social Security checks with a forwarding envelope to send right along to the private insurance companies waiting to collect! In the zero-sum world of retirement security programs, cuts in one program necessarily damage the goals of another. The Ryan plan threatens the entire foundation of programs we have established to care for our elderly for three important reasons:
We are already experiencing an environment of decreased retirement security on all fronts. Defined benefit pension plans are becoming scarce, while personal savings like 401(k)s and Individual Retirement Accounts are subject to the whims of the stock market. These declines were exacerbated by the recession, but they started long before that. And there’s no reason to think that during the long recovery to come, the inevitable fits and spurts of growth won’t shock another wave of seniors just as they are retiring and have no time left to recover their savings. In this economic climate of insecurity and fear about the future, Social Security remains a steady stream of income that is protected from inflation and is more reliable than the market’s promise, while Medicare provides a similar degree of certainty for health care. Cutting these programs in this climate signals a supreme lack of concern about the plight of retirees.
Seniors spend a disproportionate amount of their income on health care, and the Republican plan expects them to pay even more. Currently, elderly persons pay on average 1 in 5 dollars out-of-pocket for health care that is not covered by Medicare, Medicaid or any other insurance. That’s 20% of all disposable income in retirement – on top of the thousands of dollars they’ve already contributed to Medicare over their lifetime.
Make no mistake: Ryan’s plan does nothing to contain the cost of health care itself, and so it will make no real savings over time: it simply increases the amount seniors will have to pay out-of-pocket for whatever is not covered by the voucher amount. Even the voucher will cover increasingly less over time as health care costs continue to increase – especially since people’s health care needs increase as they age. The White House reports that in the first year the Republican plan goes into effect, a typical 65-year-old who becomes eligible for Medicare would pay an extra $6,400 for health care, more than doubling what he or she would pay if the plan were not adopted. The sad truth is that this doesn’t even help total costs: excess payments to for-profit providers go through the roof under Ryan’s plan, expected to rise five-fold by 2030 from what they are today.
Social Security COLA payments are far too small to keep up with these rising costs. Most years, Social Security benefits are boosted with a Cost of Living Adjustment that is supposed to keep pace with inflation. The purpose of the COLA is to retain the purchasing power of the benefit by countering inflation, making sure it stays at a neutral level. Some might believe that the yearly COLA increase could (at least partially) compensate for the increasing medical costs. But the math just doesn’t hold up.
Why do Republicans claim they are not attacking Social Security. Because by attacking it through gutting Medicare gives them plausible deniability. Oh, they're two different programs, they have nothing to do with each other. Yea sure, and there are WMD in Iraq. How many lies do conservatives have to tell before realizing that Republicans are incapable of being honest. They lie because it is an intrinsic part of what it means to be a conservative. They dream of making the US into a dystopia where rich and powerful one percent of the population says jump and the rest of us ask how high.