01 Jul President ‘once more’ calls for Payroll Tax Cut
President ‘once more’ calls for Payroll Tax Cut
President Trump announced he will once again ask Congress to pass more economic stimulus legislation that he insists must include a payroll tax cut. In other words, he wants to cut the amount of money that is paid into Social Security and Medicare by today’s workers – the money that funds the checks sent out to those who receive payments and pays for the health care of seniors each month.
He had demanded a payroll tax cut previously this year. Thankfully, Congress did not go along with him when it passed the previous legislation meant to deal with the coronavirus pandemic and the ailing economy that resulted.
His renewed call for the cut comes only a few weeks after the annual reports regarding the financial stability of the Social Security and Medicare programs were issued by their respective boards of trustees. As we reported at the time, both programs are facing insolvency, albeit at different times.
The part of Social Security that pays old age and survivor benefits is projected to become insolvent in just 14 years (2034). The Social Security fund that pays disability benefits is projected to last longer until 2065. But that fund is much smaller and even if money were diverted from it to the old age fund, it would only last for an additional year.
The estimated depletion date for the Medicare Part A trust fund is 2026. At that time, program income will be sufficient to pay 90% of total scheduled benefits. The Part B trust fund is financed differently, with premiums and general revenue funding changing each year to reflect projected spending, so Part B is expected to be adequately financed ‘for the next 10 years and beyond’.
However, those projections were made prior to the severe economic downturn caused by the pandemic. Those funds will be affected both by the amount each program spends this year, and by the lower-than-projected revenue because of the depression-level unemployment. Those factors will not be determined until the end of this year. And until a vaccine or an effective treatment is found, the improvement in the economic outlook remains very uncertain.
President Trump pledged that he would protect Social Security and Medicare when he ran for president in 2016. He has repeated that pledge several times since. But to advocate for a payroll tax cut that would bring both programs much closer to insolvency is not in keeping with his pledge.
The Social Security trustees now anticipate that when the old age and survivor fund runs out of money in 2034, it will be able to pay only 76% of the retirement and survivor benefits otherwise due to recipients.
Can you afford a 24% cut in your Social Security check? Can you afford to pay even more than you do now for your health care after you get a 24% cut in your Social Security?
Again, those projections were made prior to the effects of the pandemic. You can be sure when this is all over, the projections will be much worse.
That is why TSCL so strongly opposes the President’s proposal. True, it would be a boost for those now employed. But it will do nothing for those who are unemployed, and those are the people who need the most help right now. There are other ways to aid them, as well as to help the currently employed.
As we all know, seniors are being hit the hardest by the coronavirus. To add even more insecurity and uncertainty to the lives of seniors is just plain wrong.
We hope you will use these points and contact your own Senators and TSCL will be letting Congressional leaders know of our opposition to a payroll tax cut and we will continue to advocate ‘both in opposition to any payroll tax cut, and also for a fairer and more accurate way of calculating what the COLA should be each year’.
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When Your Doctor no longer takes Medicare
Seniors know how important Medicare is to their well-being, both health-wise and financially. But many doctors have long complained that Medicare does not pay them enough. And until the coronavirus came along, cuts in the reimbursement rates paid to doctors were scheduled to take place.
While a multitude of new mandates and burdensome administrative requirements have been layered on over the past several years, payments to physicians have not only failed to keep pace with inflation, they have, in some cases, decreased in real terms.
More than two-thirds (67%) of medical practices report that 2019 Medicare payments will not cover the cost of delivering care to beneficiaries according to one poll.
As a result, some doctors are opting out of providing care to Medicare patients.
Instead, some physicians are experimenting with converting their practices to more lucrative payment models, such as concierge medicine, in which patients pay a fee upfront to retain the doctor. Patients who cannot afford that arrangement may have to search for a new physician.
The exact number of physicians with concierge practices is unknown, health care experts said. One physician consulting company, Concierge Choice Physicians, estimates that roughly 10,000 doctors practice some form of membership medicine, although it may not strictly apply to Medicare patients. And the move to concierge medicine may be more prevalent in wealthier areas.
It is far easier for physicians than hospitals to opt out of taking Medicare patients. Most hospitals must accept them since they rely on Medicare payments to fund inpatient stays, doctor training and other functions.
Most physicians do still accept Medicare, and most people insured by the federal program for seniors and people with disabilities have no problem finding another health care provider. But that transition can be tough, particularly for older adults with multiple medical conditions.
Shuffling doctors can heighten the risk of mishaps. A study of at least 2,200 older adults published in 2016 found that nearly 4 in 10 were taking at least five medications at the same time. Fifteen percent of them were at risk of drug-to-drug interaction.
Primary care providers mitigate this risk by coordinating among doctors on behalf of the patient.
However, the swell of seniors who qualify for Medicare has outpaced the number of doctors available to treat them. Every day, an estimated 10,000 Americans turn 65 and become eligible for the government program, the Census Bureau reported.
The coronavirus outbreak has complicated the ability for many Americans to access care, regardless of their insurer. However, many older patients now have an opportunity to connect with their doctors virtually after the Centers for Medicare & Medicaid Services (CMS) broadened access to telemedicine services under Medicare.
Experts said the long-term effects of the virus on doctors and Medicare remain unknown. But the shortage of cash that many doctors are experiencing because of the coronavirus epidemic has revealed the shortcomings of how primary care doctors are paid.
The COVID crisis really brought to life the challenges of way Medicare currently pays doctors. Thankfully, despite these challenges, the number of doctors choosing to opt out of Medicare has been on the decline, according to data from CMS.
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Finally, some Good News
We realize there is a severe lack of good news these days and we sometimes fear reporting on the issues of the day can have the effect of discouraging our supporters like you.
What we hope is that we will spur you to take action and make a difference in helping us protect, preserve, and improve the programs you depend so much on: Social Security, Medicare and Medicaid.
TSCL knows how crucial they are, and we pledge to keep fighting on your behalf. But your calls and emails to your Senators and Representatives on these issues that we write about are very important and can make a real difference.
So, does your support for TSCL. We depend on you and each of our supporters to keep us in this fight. We receive no financial support from corporations or the government.
So, we wanted to close this week’s update with some good news, as reported by Bloomberg News.
Physicians have another medication at their disposal for treating diabetes after the Food and Drug Administration (FDA) has now approved a new long-acting insulin product derived from the established drug Lantus.
Nearly 1.6 million Americans have Type 1 diabetes, including about 187,000 children and adolescents, according to the American Diabetes Association. Patients with Type 1 diabetes cannot make their own insulin and rely on manufactured versions to survive.
“Approvals like this one highlight the FDA’s longstanding commitment to supporting a competitive marketplace for insulin products” said Patrick Archdeacon, acting associate director for therapeutics in the Division of Diabetes, Lipid Disorders and Obesity, Office of New Drugs.
The application was approved under Section 505 of the Federal Food, Drug and Cosmetic Act, which means that although it is a new drug application, its approval was based on research from another product.
The new drug’s availability expands the choices that patients and physicians have for treating the chronic, metabolic illness diabetes. The new product potentially reduces the cost of treatment for patients as they navigate different options.
“This approval provides patients with an additional safe and effective treatment option and also expands the number of products that are available.” Archdeacon said.
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Your Legislative Team
The Senior Citizens League (TSCL)
1800 Diagonal Road, Suite 600
Alexandria, VA 223145