Looking to the Future

JOYCE S. ANDERSON

After a whirlwind of legislation and glimmers of financial recovery in the First Hundred Days of the Obama administration, we can stop and take a look at some of the signs of where we are going next.

• Health Care: President Barack Obama has placed an overhaul of our massive health care system as his top priority. In the first days after his inauguration, he signed the S Chip law that had been vetoed twice by former President Bush, It increased coverage to 11 million children in the states.

The budget resolution, proposed by the president and passed by both houses of Congress, includes billions of dollars of funding for Health Care. Congress has been charged with the enormous job of

drafting legislation that will revise and improve the $2.5 trillion health care industry. Different committee members in the Senate and the House are working on that task right now. It is significant and surprising to note that insurance companies, a major player in the massive system along with the

pharmaceutical companies, have been making important concessions in advance of legislation. After the election in November, insurers said they would accept all customers, regardless of illness or disability, if Congress required all Americans to have coverage. This would be a huge shift from current practice that has shut out any person from gaining coverage with a serious illness or a disability. There are wrenching hardship stories from women and men across the country whose lives have been drastically affected by turndowns from insurance companies.

In March, a second possible change was put forth by the insurance industry when they offered to stop charging higher premiums to sick people. On May 5, another giant step was proposed when Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group, testified before the Senate Finance Committee. She said, that insurance companies would end the practice of charging higher premiums to women than to men for the same coverage. Her position was in opposition to the rationale offered by insurance executives last fall who defended charging women 25 to 50 percent more than men for identical coverage. They said: Women, ages 19 to 55 cost more than men of the same ages, especially in the child bearing years. In addition, women are more likely to have checkups with doctors, take prescription medicines and have certain chronic illnesses.

At the Senate Finance Committee hearing on May 5, Senator John Kerry, Democrat of Massachusetts, said, “The disparity between women and men in the individual insurance market is just plain wrong, and it has to change.” Senator Kerry introduced a bill in the Senate that same day to prohibit insurers from considering sex as a factor in setting premiums for policies in the individual insurance market. Mrs. Ignagni, in her statements before the committee said, that the industry would accept aggressive federal regulation, but would resist creation of a government run insurance program of the type proposed by President Obama and some Democrats in Congress. Her comments made clear that the road ahead will reflect certain concessions being proposed by the insurance companies, but it definitely will not be easy to reach the finish line.

• Social Security: If you are one of fifty million people who receive Social Security checks, the forecasts by the Obama administration and the Congressional Budget Office do not bring good news. They indicate that Social Security beneficiaries will not receive any cost-of-living increase in 2010 or 2011. The automatic cost-of-living-adjustment, COLA, has been in effect since 1975, calculated under a formula set by law. It aims to preserve purchasing power by increasing benefits to keep up with inflation and consumer prices. The increase this year was high at 5.9 percent. Next year, for the first time in three decades, Social Security recipients will not get any increase in their benefits. Due to the economic recession, low inflation and a drop in energy prices, the COLA will remain flat next year.

David M. Certner, legislative counsel at AARP, the lobby for Americans over 50, addressed the federal projections. “Most seniors have never been through a year in which there was no Social Security COLA.” This will be happening at a time when home values have depreciated, retirement accounts have taken large losses and health costs have risen.

In addition, a freeze in Social Security benefits would have a domino effect on Medicare because the COLA puts a lid on premiums for Part B of Medicare, which covers doctors’ services. Also affected are millions of beneficiaries who could have higher premiums for drug coverage under Part D of Medicare. In June, Social Security and Medicare will explain the forecast for benefits and premiums in their annual reports. Seniors can only hope for clear exposition with as little bureaucratic language as possible.

Douglas Elmendorf, director of the Congressional Budget Office, has predicted that inflation would remain low for several years, keeping COLA flat until January 2013. President Obama’s budget sees a 1.4 percent COLA in 2012. In either case, seniors will be facing tighter individual budgets ahead. Mr. Certner, from AARP, commented, “If as expected, there is no COLA in Social Security next year but premiums for drug coverage rise as expected, millions of beneficiaries will see their Social Security checks reduced for the first time.” The need to rein in insurance companies’ profits through increases in premiums could not be more urgently expressed.

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Footnote: Social Security and Medicare are often referred to as “Entitlement Programs”. This is a serious case of misuse of the English language that has led to the mistaken idea that they are gifts from the government. Conservative critics, from the days of Franklin Roosevelt, who signed the Social Security Act in l935, have even used the label to warn that we are on the road to “socialism.”

Let’s make it clear and simple. By definition, an entitlement is “to give a person a title, right or claim…” Social Security is a savings account that every wage earner contributes to along with his/her employer for all working years. At a given time (62 or over), money (benefits) return to the former wage earner. Medicare is the national health insurance program established in l965 with passage of the Social Security Amendments for persons age 65 and over and the disabled. It is funded by a tax on the earnings of the employees that is matched by the employer and by premiums paid by enrollees.

In short, using the word, “entitlement” completely blurs the fact that citizens earn the right to receive benefits because they have paid into the Social Security fund over all the years they worked. It would be helpful if our leaders, pundits and economists stopped referring to Social Security and Medicare as “entitlement programs.” They’re just confusing the general public with this misnomer.

Joyce S. Anderson is the author of “Courage in High Heels,” “Flaw in the Tapestry,” “If Winter Comes” and “The Mermaids Singing.” She can be reached at JSAWrite@aol.com.