At your Thanksgiving dinner this year, the new health care law is bound to come up in conversation. You’ll hear a lot of myths about the Affordable Care Act, and Working America wants you to be prepared with the facts.
MYTH: “Obamacare will make my premiums go up.”
The vast majority of people are expected to pay lower health insurance premiums under the Affordable Care Act, and many will also be eligible for financial assistance. In fact, premiums in some states are higher because of politicians blocking parts of the new law.
Remember before health reform? Even if you had insurance, you were paying a ton out of pocket for services your plan didn’t cover, sometimes even simple services like blood tests. But now that there are rules about what plans have to cover, we’ll all save money in the long run by paying less out of pocket, even if premiums for some folks are higher.
MYTH: “Obama lied about me being able to keep my health care plan under Obamacare.”
The rollout of the Affordable Care Act hasn’t been perfect, but President Obama didn’t lie. Health insurance companies, not any elected official, are responsible for plans being canceled.
Before Obamacare, there were few rules about what health plans had to cover. Millions of Americans had plans that were so shoddy, they ended up paying out of pocket for a lot of their medical costs. Too often, having insurance was a lot like not having insurance.
Under the Affordable Care Act, health insurance plans must cover at least 60% of the total cost of medical services for a standard population. Plans must also cover at least ten essential services, including lab services and hospitalization. Just like how there are rules about selling lead toys, bad meat, and moldy produce, the new law established rules about the quality of health insurance plans. These rules kick in on January 1, 2014.
The problem is that even after the law was passed, insurance companies kept pushing plans that didn’t meet these minimum standards. The insurance companies knew these plans would have to be canceled when the new law kicked in, but they kept selling them anyway.
Given the lack of warning from their insurance company, many customers were shocked to discover that their plans would soon be canceled. What’s worse, many companies are taking advantage of this situation by trying to push those customers onto more expensive plans.
If your plan was canceled, there are solutions. You can purchase insurance on the Health Insurance Marketplace, where you’ll have more options. Depending on your income and the size of your family, you may be eligible for financial assistance that will make coverage even more affordable.
MYTH: “Obamacare steals from Medicare.”
The Affordable Care Act actually helps Medicare by eliminating waste and inefficiency. Medicare benefits are not affected by the health reform law — but they would be affected if we turned it into a voucher system.
But where does that number come from? The Affordable Care Act seeks to reduce future Medicare spending, and the savings are estimated at $716 billion over 10 years. The savings come from reducing subsidies to private Medicare Advantage plans (saving taxpayer money!) and from taxes on drug companies, device makers, and insurers. Luckily, those companies will be able to afford those new fees because of all the new customers they’ll get as a result of the law.
So, Medicare benefits will not be affected by Obamacare — but they would be affected by the budgets proposed by Rep. Paul Ryan and passed by the Republican-controlled House of Representatives, which replaces Medicare with “vouchers” to use on the private market.
MYTH: “Obamacare is forcing me to buy health care.”
Let’s face it: everyone will need health care at some point in their lives. Under the new law, you can either purchase health insurance or pay a small fee. Regardless, prices are lower for everyone.
Before Obamacare, many people who could not afford insurance got their medical care from the emergency room. Emergency care is more expensive than preventive care and free of charge for those who use it but cannot afford to pay for services, so when more people wait until an emergency to access care (because they couldn’t see a doctor beforehand) that increases overall health care costs and leads to higher premiums for everyone.
Essentially, Americans were already paying for “universal health care” through the emergency room, which made health care more expensive, less efficient, and more dangerous for patients.
The Affordable Care Act takes that burden off our shoulders by asking every individual to buy insurance — the “individual mandate.” Every American has to have some sort of health insurance or pay a fee; because of subsidies and other assistance having coverage is almost always the easier choice.
MYTH: “Obamacare isn’t working because the federal government can’t do anything right.”
A bumpy start for a massive and complex law doesn’t mean Obamacare “isn’t’t working.” And Medicaid expansion, which is a program of the federal government, is already helping millions of people under the new law.
Unfortunately, governors and legislators in 24 states are refusing to accept Medicaid expansion, even though it would cost their states almost nothing until 2020. About 5 million Americans who would be eligible for Medicaid can’t access it because of these politicians. The more uninsured, the more people using the emergency room for care, which drives up costs for everyone.
It’s been about 8 weeks since the website was launched, and glitches are being fixed every day. Remember: Social Security and Medicare took several years to get up and running. That doesn’t mean they are failures.
MYTH: “Obamacare is a government takeover of health care. I don’t want socialized medicine!”
Every plan offered through the Health Insurance Marketplace is offered by a private company. Far from “socialized medicine,” the Affordable Care Act is based on free market ideas.
The government is not in the business of selling insurance. Every plan available on the health exchange is offered by a private company, co-op, or other health related organization.
Obamacare is in fact based on free market principles: that competition between private insurance companies will bring down prices. Some of the central ideas behind Obamacare come from the Heritage Foundation, a conservative think tank, and were first proposed by Republicans in Congress during the 1990’s.
How? A combination of fees on insurers and device-makers, ending subsidies to expensive Medicare Advantage plans, and reducing Medicare payments to hospitals and insurers by eliminating waste and fraud.
And you know what else? Like we’ve said, when more people have health insurance and fewer people are using the emergency room for care, that saves money for all of us.
A new report from the Center for Effective Government and the Institute for Policy Studies shows that two groups of corporate CEOs pushing for cuts to Social Security benefits, such as the “chained” CPI, personally have massive retirement plans. They also have allowed massive deficits to grow in their employees’ pension funds. While these CEOs—members of the Business Roundtable and the Fix the Debt Coalition—sit on retirement funds most people couldn’t even dream of, they have hurt their own employees’ retirement security and are looking to do the same for people who don’t even work for them.
According to the report, more than 25% of Fix the Debt members are also members of the Business Roundtable, including more than half of the Business Roundtable’s executive council. Fix the Debt is made up of more than 135 CEOs and tries to paint itself as very dedicated to serving the public, with the goal of protecting Social Security. The Business Roundtable, which includes more than 200 CEOs, doesn’t even pretend that it cares about public interest.
Members of the Business Roundtable, the report shows, have retirement accounts more than 1,200 times greater than the median retirement savings of U.S. workers near retirement age. When they retire, the $14.5 million fund they average will give them monthly retirement payments of nearly $90,000. The average monthly payment for everyone else is about $70.
While many of the Business Roundtable CEOs don’t even offer their employees pension plans, those who do aren’t exactly managing those funds well. The report found that 10 of the CEOs who do offer pensions plans have funds that run deficits between $4.9 billion and $22.6 billion. CEOs like those in the Business Roundtable and Fix the Debt are major players in the country’s growing retirement security crisis:
Over the past several decades, chief executives have slashed retirement benefits for their employees. Traditional defined-benefit corporate pensions covered 38% of private-sector workers in the early 1990s, compared with just 18% today, according to the Bureau of Labor Statistics. The number of companies providing traditional pension plans has dropped from just over 112,000 in 1985 to 22,697 in 2013.
Contrary to what The Washington Post and the billionaires who are trying to cut Social Security by pitting young people against seniors say, the nation does face a retirement crisis and Social Security doesn’t need to be cut. It must be—and can be—strengthened, said Sen. Elizabeth Warren (D-Mass.) in a powerful speech on the Senate floor Monday.
Just 18% of private-sector workers have traditional defined pension plans, and even with some employers providing 401(k) plans, she said that nearly half of workers lack access to those limited plans. More than 44 million workers have no retirement assistance from their employers.
With tens of millions of people more financially stressed as they approach retirement, with more and more people left out of the private retirement security system and with the economic security of our families unraveling, Social Security is rapidly becoming the only lifeline that millions of seniors have to keep their heads above water.
But instead of taking on the retirement crisis, instead of strengthening Social Security, Warren said, “some in Washington are actually fighting to cut benefits.”
So long as these problems continue to exist and so long as we are in the midst of a real and growing retirement crisis—a crisis that is shaking the foundations of what was once a vibrant and secure middle class—the absolute last thing we should be doing is talking about cutting back on Social Security. The absolute last thing we should do in 2013— at the very moment that Social Security has become the principal lifeline for millions of our seniors—is allow the program to begin to be dismantled inch by inch.
Cutting Social Security would mean cutting benefits for the two-thirds of seniors who rely on it for the majority of their income, said Warren. It would also affect the 14 million whose Social Security benefits keep them out of poverty.
While those calling to cut Social Security hid their intentions behind the claim that their “chained” CPI proposal is just a more accurate way to calculate the cost-of-living increases for seniors, Warren said:
“Chained” CPI? It’s just a fancy way of saying cut benefits…[instead] with some modest adjustments, we can keep the system solvent for many more years—and could even increase benefits.
No retirement crisis? Tell that to the millions of Americans who are facing retirement without a pension. Tell that to the millions of Americans who have nothing to fall back on except Social Security. There is a $6.6 trillion gap between what Americans under 65 are currently saving and what they will need to maintain their current standard of living when they hit retirement. $6.6 trillion, and that assumes Social Security benefits aren’t cut. Make no mistake: There is a crisis.
She also said the call to cut Social Security “has an uglier side.” The Post editorial and groups pushing Social Security cuts, like billionaire Peter Peterson’s “Fix the Debt” organization, are trying to drive a wedge between younger people and seniors by framing the debate as a choice between “more children in poverty versus more seniors in poverty.”
The suggestion that we have become a country where those living in poverty fight each other for a handful of crumbs tossed off the tables of the very wealthy is fundamentally wrong. This is about our values, and our values tell us that we don’t build a future by first deciding who among our most vulnerable will be left to starve.
Warren told the senators, “We don’t build a future for our children by cutting basic retirement benefits for their grandparents,” but instead:
We build a future for our kids by strengthening our economy, by investing in education and infrastructure and research, by rebuilding a strong and robust middle class in which every kid gets a chance and the most vulnerable have a strong safety net.
But sometimes “cuts” hide in the form of other changes to earned benefits. Silvers gave the example of “Chained CPI,” which cuts Social Security by changing how benefits are calculated. “Chained CPI is the vampire of American politics,” Silvers told the Washington Post. “It keep being shot through the heart and it keeps reviving.”
Here’s another vampire idea that needs to die: raising the Medicare eligibility age to 67.
The argument typically goes like this: with modern medicine, people are living longer than they did when Medicare set the retirement age at 65, so why not raise the eligibility age to keep up with the times? After all, we need to save money!
This argument conveniently ignores what happens to the millions of 65 and 66 year olds who would no longer be able to access coverage through Medicare, which they have paid into throughout their entire lives.
Many of these seniors with low enough incomes will be pushed into Medicaid, shifting costs onto that other program. Some will have incomes high enough to be ineligible for Medicaid but low enough to qualify for subsidies to purchase insurance on the health exchanges on the Affordable Care Act.
But many more seniors will lose coverage altogether, according to the Center for Budget and Policy Priorities, because while their incomes make them ineligible for Medicaid or subsidies, health insurance companies will consider them to be extremely expensive. “Because exchange plans could charge the oldest workers three times as much as the youngest, unsubsidized premiums could reach $10,000 to $12,000 (in 2014 terms) for 65- and 66-year-old individuals and twice that for couples.” Even if every state implemented ACA completely, that’s about 200,000 more uninsured seniors, according to Matt Stoller of the Roosevelt Institute.
So for increased pressure on Medicaid and more seniors unable to buy coverage at all, how much money do we save? The Congressional Budget Office has updated numbers on that front: the net savings would amount to less than $3 billion a year, a paltry sum in the context of the federal budget.
Thursday, the CBO said the overall savings wouldn’t amount to as much as it had previously estimated. Instead of saving the federal government about $113 billion over a decade, CBO now figures it’s more like $19 billion over eight years starting in 2016.
It will keep people working longer, and that means it will cost their employers—and everyone with private insurance—more in insurance premiums to cover this older, sicker population. The thing is, people still need health care when they’re 65. There isn’t a magic two years between 65 and 67 when everyone is healthy and doesn’t need to go to the doctor.
If we are serious about raising revenue and dealing with our fiscal health, we ought to stop looking at seniors – who have earned Social Security and Medicare by paying into it through a lifetime of paychecks – and start looking at the complex web of tax avoidance schemes of the very billionaires and large corporations that are pushing these cuts to begin with.
“Chained CPI is like the vampire of American politics,” Silvers said. “It keeps being shot through the heart and it keeps reviving. The reason it keeps coming back is because it has billionaires behind it.”
Naturally, the network’s anchors didn’t much like the sound of that. CNBC is one of Wall Street’s main TV mouthpieces, and it is in Wall Street’s interest that Social Security and Medicare are perceived as “entitlements” instead of the earned benefits of workers. After all, they want our politicians to balance the budget and “fix the debt” on our backs, not by raising taxes on their large incomes and investments.
The exchange Silvers had with CNBC anchor Simon Hobbs crystallized this clearly.
Damon Silvers: We’re being really clear. We’re not going to give cover to Democrats who think it’s a good idea to take away economic security from our most vulnerable citizens. We’re extremely clear about that and not embarrassed about it whatsoever. We want a really clear message out there. If you cut social security benefits or medicare benefits to our seniors, to our most vulnerable people in the country, you are going to get no support on it. It only treating them fairly there will be any progress going forward.
Simon Hobbs: Are you as clear on the reality that if you have don’t cut entitlement benefits this country may well go bankrupt?
Damon Silvers: That’s frankly not true. That’s a lie put forward by billionaires who don’t want to pay higher taxes. Social Security is the best funded aspect of our retirement system today and Medicare’s long-term issues are integrated with the long-term issues of our health care system. Neither program is overgenerous. In fact both programs are undergenerous. The only people who believe what you said are people not counting on those programs and who are worried their very large incomes will be taxed.
The letter, signed by 51 Republican lawmakers, says that “Social Security provides us the best opportunity to begin solving our nation’s significant budget imbalances” and that “the ongoing fiscal discussions in Congress provide an opportunity to address entitlement program deficits…with our limited time frame to take action before we run up against fiscal deadlines.”
In other words, let’s use Social Security to reduce the deficit, and let’s use this manufactured budget crisis to get our way.
How do these 51 Republicans want to “change” Social Security to solve our budget imbalances? Their letter is not specific, but they point out that there are a “relatively few, well-known options” to do so.
Indeed there are. We have seen these well-known options trotted out by Republican members of Congress over and over again.
For example, the cover letter from Rep. Reid Ribble (R-Wis.) specifically identifies three “well-known options” to cut Social Security benefits:
Cutting Social Security benefits with a chained CPI cost-of-living formula;
Ribble spells out exactly how the upcoming “fiscal deadlines” can be used to get these Social Security proposals through Congress. First, you increase the debt ceiling for six weeks, then in the intervening six weeks you attach Social Security legislation to a longer-term increase in the debt ceiling.
Perhaps the most “well-known option” to reduce the deficit by “changing” Social Security is the “chained” CPI, which would cut Social Security benefits by reducing Social Security cost-of-living adjustments (COLAs).
In Ribble’s district in Wisconsin, there are more than 140,000 Social Security recipients whose benefits would be cut because of the “chained” CPI. The benefits of Ribble’s constituents would be cut $4 million in 2015 and $57 million in 2023.
It might be safe to assume that many of these constituents who would suffer the most from Republican hostage-taking are tea party Republicans.
Of course, cutting Social Security benefits is just one of the ransom demands made by Republicans in Congress. As AFL-CIO Policy Director Damon Silvers recently wrote:
That’s why people need to tell the president, ‘stand tall, we are with you. No negotiating with hostage-takers. Not about the Affordable Care Act, not about the Grand Bargain and certainly not about cuts to Social Security, Medicare or Medicaid, or more giveaways for big corporations that outsource jobs. You won the election. You must defend democracy and you must stand up for the 99%, and that means no more rewarding hostage-takers.’
While the country remains shut down because of irresponsible House Republican hostage-taking, progressive members of Congress and working families are looking ahead to fight against any proposed grand “bargain” that would include benefit cuts to Social Security, Medicaid or Medicare. Members of the Congressional Progressive Caucus (CPC) spoke Thursday before working families and allies, specifically rejecting any such cuts.
While some politicians and pundits are proposing the use of the so-called “chained” CPI to determine Social Security cost-of-living adjustments over time, progressives and working families realize that the “chained” CPI would actually cut the income of retirees and people with disabilities. Hostage-taking House Republicans keep changing their random demands to end the government shutdown, and their latest demand is for Democrats to agree to cut Social Security benefits or Republicans will keep hurting people through refusing to pass a clean continuing resolution.
Rep. Elijah Cummings (D-Md.) noted the problems with “chained” CPI: “The ‘chained’ CPI would result in very real and harmful cuts for seniors, the most vulnerable in our society. These cuts would only deepen over time while the cost of living goes up.”
Pointing out a better policy option, Rep. Mike Honda (D-Calif.) said: “Instead of talking about the ‘chained’ CPI or cutting benefits, my mom would say you just need to make the pie bigger, we’re just going to talk about one cut—and that’s cut the crap….Cut the crap, scrap the cap.” Currently, wealthy Americans don’t pay into Social Security on any income above $113,700. Scrapping that arbitrary cap would go a long way to shoring up Social Security’s future.
Rep. Alan Grayson (D-Fla.) made it clear where the CPC stands on these issues: “We will vote against any and every cut to Social Security, Medicare and Medicaid,” he said. “If it ain’t broke, don’t break it.”
On Sunday, House Majority Leader Eric Cantor (R-VA) said that Republicans would be open to restoring some of the funding lost in the job-killing sequester if new cuts to social safety net lifelines were put in place. In effect, Cantor is suggesting replacing one policy that hurts the economy and suppresses job growth with another policy that does the exact same thing.
“What we need to have happen is leadership on the part of this president and the White House to come to the table finally and say we’re going to fix the underlying problem that’s driving our deficit,” Cantor told Fox News’ Chris Wallace. “We know that is the entitlement programs and the unfunded liability that they are leaving on this generation and the next.”
Actually, Cantor is completely wrong about Social Security and Medicare causing the deficit. The current deficit is caused primarily by the Great Recession, but also by the Bush tax cuts and two wars that were never paid for. From the Economic Policy Institute:
The deficit is already more or less stabilized for the next decade. In future decades, projected deficits are driven almost entirely by health care costs, but this is a problem of both the private and public sectors. Medicare and Medicaid have lower costs than private insurance and have done a better jobs of controlling costs over the past 40 years.
Cantor offers a false choice that would do little to cut the deficit or boost the economy or job growth and would harm our most vulnerable citizens. Republicans are still focused on the wrong “crisis.” While the evidence is quite clear that what the U.S. needs most is more jobs and investment in infrastructure, Cantor and his fellow Republican “leaders” are focused on deficit reduction that economists have said isn’t necessary, and, in fact, is a drag on the economy and job creation.
While many Republicans and conservatives have minimized the impact of the sequester and its effects on America’s working families, nearly 40% of people say it has hurt them personally. Here are 25 ways the sequester is affecting people’s lives, not just right now, but more and more over time.
25. Fewer Services at National Parks: As the sequester goes on, national parks will have fewer and fewer employees and will have to cut hours, maintenance and visitor center services.
24. Customs Wait Times: Long wait times at customs have exceeded four hours at some airports and passengers have missed flights because of the delays.
22. Loss of Weather Satellites: In order to save on-the-ground jobs, the National Oceanic and Atmospheric Administration is delaying the replacement of satellites that collect and transmit data that enhance weather forecasts and climate models.
21. Increasing the Deficit: With $50 billion being cut from enforcement activities by the Internal Revenue Service, less tax revenue will be recovered, with as much as $4.5 billion being lost and added to the deficit.
20. Loss of Work-Study Jobs: More than 33,000 college students will be dropped from the work-study program and will lose funding for school. Some of them won’t be able to afford to continue their education.
19. Weaker Public Safety: Massachusetts is cutting back on inspections of food plants, hospitals and air quality. This is after the state’s 2012 deadly outbreak of meningitis, which could have been prevented with improved inspections.
18. Failure to Make School Repairs: Districts like Heart Butte in Montana are forgoing necessary repairs, leaving students without hot water, with holes in building roofs and buses and playgrounds that are falling below regulations.
16. Loss of Unemployment Benefits: Already modest unemployment insurance payments will be cut or eliminated for millions of workers at a time when jobs are still scarce.
15. Teachers and Staff Laid Off: School districts like Window Rock in Arizona are laying of staff and teachers and may have to close schools if the sequestration continues.
14. Less Scientific Research: Funds for the National Institutes of Health are being cut, which will delay research that is critical for developing new treatments for diseases.
13. Loss of Counselors: Schools like those in the Hays/Lodge Pole District in Montana are unable to fill counseling jobs as youth suicides are on the rise.
12. Less Job Search Assistance: Workforce training and support programs are expected to see cuts up to 25% of their budget, and organizations like SuperJobs Center in Cincinnati will suspend all training for the thousands of job seekers it serves.
11. Elderly Adults Not Being Able to Eat: Cuts to the Meals on Wheels program mean that local deliveries are dropping by hundreds of meals a day in places like Contra Costa County in California and Lamar County in Texas. The programs are being frozen or reduced and some of those who have lost the meals have no other means of getting daily meals.
10. Decreased Law Enforcement Capability: The only crime gun tracing facility in the country has laid off 90 workers, hampering their ability to track down weapons like those used by suspected Boston Marathon bombers Tamerlan and Dzhokhar Tsarnaev.
8. Declining GDP Growth: The rate of economic growth in the United States declined in the first quarter of the year because of budget cuts.
7. Increasing Children’s Exposure to Lead: Programs designed to lower children’s risk of lead poisoning have faced cuts and could see more. Meanwhile lead poisoning is described by Think Progress as “one of the most important and overlooked national public health problems.”
6. Kids Kicked Out of Head Start: As many as 70,000 children will lose their chance of participating in Head Start this year because of the cuts.
5. Increased Homelessness: According to the Department of Housing and Urban Development, as many as 100,000 homeless and formerly homeless people will be removed from programs that have been proven to reduce homelessness.
4. More Air Pollution: Cuts have forced the Environmental Protection Agency to delay the implementation of new monitoring sites for dangerous air pollutants.
3. Fewer Public Defenders and Worse Representation: Offices are being closed in 20 states, cases are being delayed and defendants are being forced to be represented by Criminal Justice Act panel attorneys, which some studies have found to be less effective than public defenders.
2. Less Support for Domestic Violence Victims: Shelters for domestic violence victims like those run by the Rhode Island Coalition Against Domestic Violence are cutting back on beds and services for the first time in their history, increasing the chances that women and children in the state will be victims of violence.
1. Lost Homes: More than $2 billion in cuts to Section 8 and other housing programs to freeze or shrink their programs and people are starting to lose their homes as a result. It is projected that 140,000 fewer households will get assistance this year.
Learn much more about how the job-killing sequester is hurting communities around the country at Mapping the Sequester.
Working families are calling on Congress to protect Social Security, Medicare and Medicaid from benefit cuts (i.e., raising the retirement age and the “chained” CPI), repeal the sequester and close tax loopholes for corporations and the wealthiest 2%.
Our country needs workhorses, not showhorses. We need depth of knowledge, not empty slogans. Most importantly, we need leaders who will fight for working families all of the time, not some of the time.
Let’s get specific. We need leaders who will protect the earned benefits of Medicare and Social Security. We need to stand firm against the relentless attacks on the essential functions of government: the unprecedented filibuster abuse, the man-made paralysis of the National Labor Relations Board, and the dismantling of our hard-fought protections against the Wall Street crimes that plunged American workers into deep recession.
This isn’t abstract. American workers can’t afford anything less. And that’s why we strongly urge Massachusetts voters to support Ed Markey for U.S. Senate on June 25.
Ed Markey has represented Massachusetts in Congress for many years. He’s been in the majority and the minority. He’s served with Democrats and Republicans in the White House. Through it all, he has consistently striven to make our country cleaner, more equal, more technologically savvy, and more transparent.
The camera at the bottom of the ocean that showed the oil leaking out of the BP Deepwater Horizon rig in 2010? That was Ed Markey. The creation of an entire Congressional committee devoted to developing clean energy jobs? That was Ed, too. New requirements for airline cargo screening to keep us safe? Markey.