How Will Social Security and Medicare Survive in the New Congress?

I think it's time for both programs to be paid for out of general revenue. That would require a general income tax increase. Our income tax is already a progressive tax system with the tax rate increasing as the individual's income increases. The payroll taxes for Social Security and Medicare would be eliminated as well as the trust funds as both would be unnecessary. Social Security recipients would still receive their earned amount based on the highest 35 years of covered earnings. Medicare would become a program that is open to all U.S. citizens starting at age 65 and that limit would gradually be lowered and include those eligible for Social Security disability payments. Big problems require bold solutions and not just tinkering around the edges.

Why isn't anyone talking about the excess payments made by the government to Medicare Advantage plans? Those excessive payments are well documented and well known throughout the House and the Senate. There have been multiple articles, that contain excellent data, written about this just this year and many more from the last few years.

Roberta:
Medicare announced a new rule to " improve program integrity and payment accuracy" for Medicare Advantage plans while allowing the plans to keep hundreds of billions of taxpayer dollars in overpayments dating back to 2008. MedPac, the government agency that advises Congress on Medicare, says over $124 billion on overpayments were made between 2008 and 2023. Medicare expects to recoup only $4.7 billion overpaid since 2018, overpayments prior to 2018 will be written off. The recovered funds will be less than one fifth of 1% of money paid to Advantage plans. The health insurance industry has suggested legal action if the rule is implemented. The rule doesn't do anything to stop keep overpayments in the future.

?While all this money has been spent there is no evidence that it leads to better care. MedPac says it can't provide an accurate determination of the quality of Advantage plans due to the poor quality data from insurance plans. Medicare requires companies to provide accurate data to participate in the Advantage model but it seems lack of compliance is inconsequential.

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Isn’t the answer to why government doesn’t crack down on this or that industry always “follow the money” in the form of lobbying or campaign donations? Here’s an old article from 2019, but it spells out everything about the current Medicare Advantage Plan mess:

https://www.npr.org/sections/health-shots/2019/07/16/740964958/records-show-medicare-advantage-plans-overbill-taxpayers-by-billions-annually

And why was there ever a law BLOCKING Medicare from negotiating drug prices? Let’s hope the new law gives us a break.

https://www.cnbc.com/2022/08/12/drug-prices-passage-of-inflation-reduction-act-gives-medicare-historic-new-powers.html

Now somebody please fill me in on how they managed to screw up Social Security. Is it as simple as the inverted pyramid?

As I have pointed out several times the healthcare industry is either near or at the top of lobbying spending: https://www.opensecrets.org/federal-lobbying/sectors/summary?cycle=2022&id=H

https://politicalaccountability.net/hifi/files/CPA---Business-Insider---We-combed-through-records-of-100-healthcare-companies-L-L----10-30-20---CPA-quoted.pdf

Why Medicare was blocked from negotiating drug prices: https://www.nbcnews.com/id/wbna11714763
The program was never about senior's prescription needs it was about wealth transfer to the private sector.

I’m 62, retired federal service , 3 years out from mandatory Medicare. I brought with me health insurance from work into retirement. I know I don’t have to take Medicare at 65 without a future lifetime penalty, but if I have my own insurance now that’s damn good and want to keep it, why should I or others be threatened over Medicare ? Would not the program save money by my not enrolling providing more for those that choose too? Or is it they want to soak me for the premium?

Dan, when we turned 65, the health insurance on my job had advised us two months prior to sign up for Medicare Part A. No charge at 65 years for Medicare Part A. I still worked and had health insurance from my job. The health insurance company wanted us to sign up for part A. Then when I retired several years later, I signed up for Medicare Part B as well.

House Republicans have introduced legislation to guarantee Social Security and Medicare benefit payments will continue even if the U.S. debt limit is reached, and to state that Social Security should be preserved for generations to come.
Both bills were introduced on Feb. 8 and come amid a dispute with President Joe Biden over his characterization of Republicans as favoring cuts to the popular benefit programs.
Both Republican bills were introduced on Feb. 8, a day after Biden’s State of the Union address, during which he accused Republicans of wanting to sunset both programs after five years and of holding the nation’s economy hostage until their demands were met.
The Speaker has repeatedly stated that Republicans will not end Social Security or Medicare benefits but seek a “responsible” debt increase accompanied by spending cuts.
Under the Republican bill, sponsored by Rep. John James (R-Mich.), the Secretary of the Treasury would be authorized to make Medicare and Social Security payments despite the debt limit being reached.
That would ensure that the United States would not default on those benefits so long as it could continue borrowing. It would also prevent either party from using the programs as bargaining chips in debates about increasing the debt ceiling.
A second bill, introduced by Rep. Claudia Tenney (R-N.Y.) and cosponsored by 10 Republicans, calls for a resolution declaring “Social Security should be preserved and protected for current beneficiaries, and for future generations to come.”

Editor's comment: Thanks Uncle Al. Looks like SS and Medicare are safe for now, at least as far as the debt ceiling goes! Note to our Members, let's not get into an us vs. them back and forth on this. Political comments that trash the other side will be deleted.

The best thing about this brouhaha is that is finally attracting some attention to this problem, one crying out for a solution that no one wants to face. Tonight on the PBS Newshour there was a whole segment about the looming problems for SS and Medicare and what could be done. Maybe instead of pointing fingers - something might actually get done! Here is the segment: https://www.pbs.org/newshour/show/how-biden-reignited-debate-over-social-security-and-medicare-during-his-state-of-the-union

Dan, I still have my Gov't health insurance and I have Medicare. I pay both premiums. It works as a Medicare supplement plan. Everything not covered by Medicare is covered by my health insurance. The only reason you would drop your old insurance is if you bought a Medicare Supplement plan to replace it. I don't know which of the plans you have but there is no requirement to drop your plan when you have Medicare.

Only a few years ago, the Mayo clinic in Jacksonville FL finally starting accepting Medicare. Now they have done a partial about-face and now refuse to accept Medicare Advantage plans.

https://www.medpagetoday.com/special-reports/exclusives/101320

Shumidog & Dan. I am a retired State Gov. employee & I was able to keep my health ins which I cover myself & hubby. I signed up for Medicare but didn't start paying until I left employment which was after 65 & then my State ins. became my secondary. Our State also offers an excellent drug program but if you drop in favor of Medicare can not pick it back up. I have thought same as Dan why must we have to take Medicare. If you have ins your happy with so be it, the Government needs to save money etc. let it start here! As Shumidog says I was never told I had to drop my State ins. only it became the secondary. And lets face it Medicare doesn't pay much thus almost everyone needs a secondary ins. As I see it we pay money for something that really isn't worth it, we should have a choice to take Medicare or keep your present ins. if possible & only pay for one ins. For those that don't have any other ins. Medicare is great & maybe they could offer/pay more if only insure those we no other ins.

Sen. Scott of Florida introduced a bill yesterday regarding Social Security & Medicare
https://news.yahoo.com/scott-announces-social-security-medicare-001813836.html

Following up on Dave’s comment about Mayo Clinic not taking Medicare Advantage, there are ways around that with most MA plans, including mine with United Healthcare PPO. My maximum out of pocket (MOOP) payment for out-of-network providers like Mayo is $5100 annually. Once you have personally paid this total amount for any and all medical services to any provider in any calendar year, you don’t have to pay any more, including if you use Mayo or ANY provider that is out of your network that also takes regular Medicare, as almost all do. It’s likely that if you’re using Mayo, your condition will require a fairly large amount of payments from you, even with original Medicare. Many MA plans will pay MAYO the amounts over your MOOP, limiting your costs to your MOOP, like mine at $5100 annually. Unfortunately, original Medicare, also known as Medigap or Medicare Supplement, has no limit on Maximum Out of Pocket costs for an insured person. The sky’s the limit for copays, coinsurance, etc. Also, with regard to Mayo doing a recent about-face on accepting Medicare Advantage, I’m not sure this is the case. I’ve had MA since I turned 65 eight years ago and Mayo has never been within my network. Nevertheless, I could still go there and have my costs capped at $5100 due to the MOOP benefit. This would also hold true for other major clinics and hospitals such as M. D. Anderson, Sloan-Kettering, Dana-Farber, Hospital for Special Surgery, etc.

Medicare is separate and apart from medigap or medicare supplements. I have original Medicare and a medicare supplement aka medigap policy from Blue Shield. My maximum out of pocket for the plan I have is $2,750/year. Medigap takes over from Medicare coverage. I pay a monthly premium for Blue Shield Medigap and my medicare premium comes out of my monthly social security.

I agree with Ron that the false alarm cry of “Social Security is running out of funds” is political posturing. Raising the cap on wealthier income earners would easily solve the “problem.” Right now anyone who makes over $160,200 annually doesn’t pay Social Security tax on any wages or salary above that. There are many millions of people making way more more than that. Just increasing the cap somewhat on these wealthier individuals would solve any “running out of funds problem” in short order...

I did not know that those who are making millions/yr only pay social security tax up to $160K. Totally
unfair but if they raised the tax to include those high incomes they would then have to raise the yearly cap on benefits received. So more $ in but more $ out????

Editor's note: Yes, it is kind of outrageous. When SS started, probably no one imagined how quickly the limit could be reached by today's whopping corporate compensation packages. If enacted, the extremely high earners would probably not get much higher a benefit than they do now, so the impact of the change would be positive to the program's funds. From the very beginning of the program SS was set up to be progressive - lower earners get a higher percentage of what they put in than do higher earners. It is also a self-funded program, whatever is collected is available to be paid out. At least as it stands now, the government does not fund the program so there is no impact on the budget.

Clyde said.."Unfortunately, original Medicare, also known as Medigap or Medicare Supplement, has no limit on Maximum Out of Pocket costs for an insured person. The sky’s the limit for copays, coinsurance, etc.""

This is just basically not true with the most popular Medicare supplement plans. I have Plan N from Mutual of Omaha and my premiums are cheap and my doctor visit copay is only $20. No coinsurance at all, as Mutual Of Omaha picks up the rest, in full. I've never had to pay anything for a any kind of medical procedure or device. And I've had plenty of devices and procedures in the last few years!

I would never get a MA plan. Too restrictive with their networks and procedure approvals.

The decision on what Medicare plan to choose is one that should be based solely on what is best for the individual. Some find that original Medicare (aka the supplement) is better, others determine that Medicare Advantage works best for them. My experience has been solely with Medicare Advantage for eight years and it has worked well for me. So I post here what I see as some of its advantages, and others may find that these are helpful to them. Although Medicare supplement has no maximum out of pocket cap, it is fairly unlikely that anyone with it will run up significantly high personal medical costs they have to pay out of pocket in any one year. But it can and does happen occasionally. With Medicare Advantage, medical costs are capped each year, in my plan at $5100, whether in network or out of network. So you can use any provider or facility/hospital you want and not personally pay any more than the cap amount in any year.

Clyde, yes, but I think that you will be eating into that $5100 every year, sometimes quite a bit. While my occasional $20 doctor & specialist copay is all there is. Indeed, there are "bare bones" Medicare supplement plans (that I assume you are referring to), but no reasonable person would ever buy them. My "Plan N" costs me $135 a month here in Florida. Plan N and Plan G are widely regarded to provide the most comprehensive coverage. Good luck to us all.

Clyde,
You said "Some find that original Medicare (aka the supplement) is better". Medicare and supplements are not one program as you infer, they are two separate policies. Medicare is a Federal government healthcare policy that covers 80% of your healthcare costs with the supplement being a commercial insurance product picking up most or all of the remaining 20% depending on which supplement plan you chose.

You said " Although Medicare supplement has no maximum out of pocket cap". That is not true. There are 10 supplement plans, not one. My Plan G maximum out of pocket expense is the Part B deductible which is $226 for 2023 but that expense varies with which plan you chose. Medicare has no limits on out of pocket expenses, supplements do and most are low compared to Advantage plans.

Advantage plans are not Medicare even though they are deceptively marketed that way. Hopefully Congress is going to act soon to curb the deception. If you don't have a red white and blue Medicare ID card you have a commercial for profit insurance product. Huge difference in how they work and their operating models

Hi, Mike,
Thanks for your response to my post. My sentence “Some find that original Medicare aka the supplement) is better” was inelegantly worded. I was, and what I meant, referring to the supplement, aka Medigap (which is the term I’ll use going forward for less confusion) and inadvertently included the word “original.” You’re right that Original Medicare is the federal program that includes Part A and Part B. Part A (hospital insurance) is usually covered at no cost for participants who have put in enough Social Security hours of work. Part B (medical insurance) is what most Medicare participants currently pay $164.90 per month for, usually automatically deducted from their monthly Social Security check.
The maximum out of pocket (MOOP) issue for Medigap coverage is a bit tricky. Your $226 deductible for plan G is not, as you indicated and as far as I can tell from my research, a MOOP. If it were, you would never pay ANYTHING beyond your first $226. That would be quite a deal. Sign me up!
I encourage readers to look at the following section of the website for the National Council on Aging, a nonprofit organization. It gives a very good summary of the basics of various types of Medicare choices, especially as to MOOPs, and the financial responsibilities of participation in the different plans:

https://ncoa.org/article/what-you-ll-pay-in-out-of-pocket-medicare-costs-in-2023

As to the red, white and blue Medicare ID cards, as far as I know everyone receives one of these when they apply for and become eligible for Medicare, regardless of whether they choose Medigap or Medicare Advantage. I’ve had mine for the eight years since I turned 65 and have also always had Medicare Advantage that entire time. The Medicare program has several different parts and Medicare Advantage is just as much a part of the program as Medigap supplement plans. The two are different, of course, but both are authorized by Congress as part of the entire program called Medicare.

Mike, thank you! You described Medicare and the independent Medicare Advantage plans very clearly. Having worked with insurance for most of my nursing career, I can say that you described both plans accurately. You are correct that once you pay the Medicare Part G monthly premium, and the part B deductible, you are covered for everything and you should receive no bills from your doctors or hospital. The premiums for Part G are high, however.

I opted for Plan N and have been very happy so far with the coverage. I do pay a co-pay of $20.00 when I see the doctor and if I were to go to the emergency room without admission I would pay a $50.00 copay. If I am admitted then that $50.00 would be waived. I also must be sure that any and all doctors I see participate fully with Medicare or I would pay an extra 15% of approved charges to a non-participating doctor. I do pay the Medicare Part B deductible as well. The premiums are more moderate for Part N.

The best thing with Medigap plans is I can seek treatment with any doctor that participates with Medicare nationwide and I do not have to wait for recertification for any procedure which an advantage plan could and nearly always does require. I used to have many of those calls to make each day when I worked with surgeons for 12.5 years. If not done, the patient can pay a huge out of pocket fee under the advantage plan. ( Always take an advocate to the hospital with you if you can.)

A new proposal to expand benefits and fund Social Security. According to an analysis by the Social Security Administration it would fully fund the program by 75 years, not add to the taxes of 93% while adding $2,400 in yearly benefits.

https://www.sanders.senate.gov/press-releases/news-amid-republican-threats-to-social-security-sanders-warren-schakowsky-hoyle-and-colleagues-introduce-legislation-toincrease-benefits-and-extend-solvency-through-2096/?link_id=11&can_id=ab2490a3803606c27c78f56536736097&source=email-february-3-2023-friday-alert-retiree-news-9&email_referrer=email_1820952&email_subject=february-17-2023-friday-alert-retiree-news

Clyde, we are getting off topic of SS, Medicare and the new Congress so this will be my last comment regarding plan differences.

If my out of pocket maximum is not $226 in 2023 what does your research say it is? You are correct, I have never paid ANYTHING out of pocket other the than my Part B deductible and apparently my supplement carrier agrees with me as they have never sent me a bill. It is a great deal and I wish you could sign up but unless you are willing to go through the supplement underwriting process or live in one of the four states that allow you to change to a supplement without underwriting you can't get what I have.

Do you present your red, white and blue Medicare car when you see a doctor? Does your doctor bill Medicare? Do you receive an Explanation of Benefits from Medicare? If not you have a commercial policy as you did before you became Medicare eligible. No matter how Congress identifies Advantage plans there was never an intention for Medicare to be a for profit program. Advantage plans weren't created in a vacuum for the benefit of seniors, they are a result of hundreds of billions of dollars that grease the machinery of Government.

Mike, I have a feeling we’re on the same page as to involvement of for-profit corporations. I would prefer that Medicare be administered in all its forms, including benefits currently offered by Medicare Advantage (MA), by governmental entities rather than private companies. But that’s not the way it currently exists as authorized by Congress, and even supported (MA) by no less than President Obama when he was in office. For-profit corporations, contrary to the understanding of some, are also very much involved in marketing and selling Medigap policies, so corporate profits are not just limited to MA. See the following page from the website of seniorliving.org as an example:

https://www.seniorliving.org/insurance/medigap/united-healthcare/

Realizing that MA is a very real part of Medicare programs offered, I feel it’s incumbent on Medicare participants to select the plan that is best suited to them, whether Medigap supplement or MA. I’ve happened to choose MA for the eight years I’ve been on Medicare. I’ve not criticized Medigap plans here, but have only indicated what I personally like and prefer about MA plans. My MA PPO plan doesn’t require referrals to specialists. I make that decision on my own, unless I happen to want to consult with my PCP. In seeking a specialist I’ve always found excellent providers with superb credentials in my very large nationwide network. Should I want to go to an out of network provider or hospital, such as Mayo or M. D. Anderson, I can do so and my out of pocket costs will be no more than $5100 annually. All my in-network costs are limited to $2400 per year and I’ve never paid much more than $100-200 annually out of pocket. My PCP visits are unlimited at $0 and specialists are $35 copay. All my medications, if generic, are provided for free through my MA mail order pharmacy, which is fast and efficient. I currently only take generics.

Although I’ve always had high quality care under MA, premiums are also a consideration. The current average monthly premium for a Medigap policy is $139, although many are higher. Part D drug premiums (automatically included in my MA policy for $0), average $35 a month. My MA premium has always been $0 for the eight years I’ve been eligible for Medicare. So over that period I’ve saved approximately $16,700. If I live another 20 years and my MA policy remains similar, I’ll be saving an additional $40,000+, and that’s using today’s Medigap premium averages, which are quite likely to increase over the next two decades. Around $60,000+ in premium savings during my retirement years is a lot. I can definitely use it, and not just for fun or frivolous things. Navigating the financial seas of retirement is a challenge!

Yes, this article focused on what Congress may do about SS and Medicare, but that opens up discussion to the various aspects of Medicare coverage, too, and the discussion has been enlightening.

Each Medicare participant has a lot of options available and, hopefully with some professional insurance advice or from nonprofits like SHINE, each person will make the most informed and best decision for them, whether Medigap supplement or Medicare Advantage.

An analysis of options: https://www.politifact.com/article/2023/feb/22/when-will-social-security-sunset-barring-congressi/

Every senior citizen must focus on this very important topic and use our collective voting power to eliminate any politician not supporting and maintaining these two very important programs!
Excessive drug prices, excessive medical costs all robbing seniors if what little savings they may have !
There is plenty of tax revenue currently spent foolishly. If your local politicians don’t stand up for SS or Medicare vote them out of office

From Americans For Tax Fairness:
"Tomorrow, millionaires stop paying into Social Security. That’s because once you earn $160,200 in 2023, you stop contributing to Social Security. And someone making $1 million a year gets their first $160,200 in just 59 days. For a billionaire?they made that much shortly after the first hour of the year!"

Clyde, after looking at the NCOA website you linked to I would not trust what they have to say for three reasons. The $2,700 they list for out of pocket expenses for plans F & G is for high deductible plans but that is not mentioned. Listing the deductible for standard F & G plans as $2,700 is wrong.. Here are the correct figures from Medicare https://www.medicare.gov/supplements-otherinsurance/how-to-compare-medigap-policies

If you study the Medicare.gov chart you will see that Dave, Jennifer, Marilyn and Mike were correct when they refuted your ”Unfortunately, original Medicare, also known as Medigap or Medicare Supplement, has no limit on Maximum Out of Pocket costs for an insured person. The sky’s the limit for copays, coinsurance, etc." comment. The chart shows that Mike is correct when he said his max out of pocket is $226. You fail to acknowledge those errors. Medicare notes that the $2,700 deductible is for high deductible plans, the NCOA does not, strike one against NCOA.

At the bottom of the page you linked to is the statement "Funding for This Program Made Possible By Our Partner Aetna" so it seems Aetna, a company that sells health insurance has an interest in what NCOA publishes, strike two.

NCOA links to Medicare Choice Group as a trusted NCOA partner that works" with the most respected Medicare plans" to give unbiased advice for Medicare choices. What is the financial tie between NCOA and Medicare Choice Group ? As others have mentioned on a different blog brokers can double the their commission by selling an Advantage plan over a Medigap policy,is that the reason they incorrectly state the Medigap deductible? All of the companies they work with have been accused by whisleblowers or the Department of Justice for fraudulent billing or overcharging Medicare(in their defense it is hard to find an Advantage company that isn't under investigation). It seems again NCOA has a financial conflict of interest. Strike three.

Don't put too much emphasis in being a "non profit" as a measure of trust, it is simply a section of the Federal tax code with loopholes. The National Football League National Hockey League and the Professional Golf association are or were at one time non profit organizations. AARP is a non profit but as noted on this site they receive hundreds of millions of dollars from the healthcare company they partner with.

I

President Biden's plan for Medicare solvency:
https://www.healthcaredive.com/news/biden-medicare-solvency-plan-prescription-drugs-raise-taxes-budget/644314/

Mike, not sure if you seen these recent statistics, The top 1% of earners already pay 42.5% of all collected taxes, The top 50% of earners pay 92.5% of all taxes collected And the bottom 50% of all earners pay 2.5% of collected taxes. I think high earners are already paying more than their fair share. I'm against redistribution of wealth as you can tell. You don't increase the size of the pie by dividing it.

Hey Frank......glad to see some interesting and honest comments...you are so so right ! Before I retired, I was within the top 5% paying mucho $$$.......I have relatives that were in the group paying their portion of the "2.5% of collected taxes".....they laugh all the way to the medicare line, paying no premiums or deductibles, while I pay for auxiliary insurance, medicare, deductible, scripts, etc....like you, I am totally against redistrubion, s it is a form of socialism....when I pass on, no relatives will benefit from me....only the ASPCA, St Jude's Hospital, and the Shriner kids.

Social Security is running out of money. A lot of people depend on it for their basic support. Let's concentrate on solutions that will solve the problem. If this generates a back and forth we will stop the Comments.

Uncle Al.....as much as I also donate to the ASPCA.....there's no reason for hating family members who qualify for help from the government. I'm sure they had to struggle to put food on the table while you were living a very comfortable lifestyle. I'm sure you're getting by just fine and won't have to worry about depending on the government for help like many people do these days. Just be grateful that is so...

Enough said. Comments are closed on this topic, which I think we have exhausted. Now it's up to Congress to do something!