Retiree Insights
A new commission is studying the future of America's health program for seniors.
"What would seniors do without Medicare?" asks Helena White, a member of AFSCME Retiree Chapter 1199C in Philadelphia. "If I had to pay the $18,000 bill for my recent hospitalization, I’d be in the poorhouse. Years ago, seniors used to go bankrupt after a hospital stay. Medicare changed that. It’s heaven-sent."
White wants to know if the National Bipartisan Commission on the Future of Medicare is listening to people like her. The commission — mandated by Congress to measure the impact of the baby boom retirement on Medicare — is currently studying, analyzing and dissecting the program.
SECURE FOR NOW. The commission’s job is to make recommendations to Congress on how to ensure the long-term solvency of Medicare’s Hospital Insurance Trust Fund (Part A). The Trust Fund is secure until 2010 as a result of measures taken in last summer’s Balanced Budget Act, which also created the commission. After 2010, however, all bets are off as the huge baby boom generation enters retirement and starts placing big demands on Medicare’s resources.
"Working people, young people, need to pay attention to this commission, not just the retirees," says George Matzat, a member of AFSCME/ Milwaukee Retiree Chapter 48. "Its recommendations could determine the kind of Medicare they’ll get when they retire. And if they’re not vigilant, they may lose out."
BABY BOOMERS. Right now, enrollment in Medicare is growing slowly because those entering retirement are from the small generation of Americans born during the Great Depression and war years. Slow growth will come to an end when the first baby boomers retire. Most of the baby boom generation, born between 1946 and 1964, will retire between 2010 and 2030 and will cause the U.S. population over 65 to increase by 70 percent.
As if this weren’t challenge enough for Medicare — as well as for other public programs that serve the elderly — the working age population will increase by less than 4 percent during the same period, so there will be fewer workers paying into the program.
But financing is only one area that the Medicare Commission will exam-ine. The commission has also been instructed to look at the kinds of servi-ces Medicare covers and determine whether they meet the needs of an aging population. Care for chronic illness, for example, is increasingly in demand and, along with coverage of prescription drugs and most preventive care, is beyond Medicare’s benefits package. The Medicare Commission will study how other countries are meeting the needs of their aging societies and how they’re preparing for the retirement of their own baby boomers.
VARIED OPTIONS. What will Medicare look like in the future? There are a lot of proposals under consideration.
"One idea that makes me nervous is Medicare becoming the health care equivalent of a defined contribution pension plan," says Lee Pound, vice chair of New York’s Civil Service Employees Association Retiree Division/AFSCME Chapter 1000. "Instead of being guaranteed a defined set of benefits, as in the current program, seniors would get a Medicare voucher with a specific dollar value. We’d use the voucher to buy private insurance — the best coverage we could find for the money.
"The danger is that, in the future, the voucher might not keep up with the cost of health care and would buy fewer and fewer benefits as the years went on."
AFSCME is keeping an eye on the commission’s proceedings because the union shares Pound’s concerns. AFSCME is also opposed to proposals to raise the age of eligibility for Medicare benefits (now 65). This could mean more uninsured Americans and could cause serious hardship for people who must retire due to ill health. Another concern: the possibility of changing Medicare from an earned benefit, with nearly universal participation and political support, to one that is income-tested.
"I hope that AFSCME members — working and retired — will have the chance to address the commission at public hearings around the country," says Helena White. "We need to let them know that Medicare is vital to every American and that we don’t want to see the fundamental values of the program either eroded or destroyed."
CORRECTION: In the last issue of Public Employee, this column called on AFSCME members to urge their representatives in Washington, D.C., to support two bills that would reform the Government Pension Offset, a law that takes an unfair bite out of Social Security benefits for thousands of public retirees. The telephone number was incorrect. Please call (800) LABOR-21 and ask your Senators to co-sponsor S. 1365 and your Representatives to co-sponsor H.R. 2273.
