Federal Budget Cuts May Upend State Budget Plans; Senior Groups Call Ryan Medicare Plan “CouponCare”

With the Trump Administration and both houses of Congress planning to make major budget cuts next year, New York State is bracing for uncertainty as the state develops its budget by April 1st for 2017-2018.  Federal spending plans currently in place only go through April, so  the  spending cuts could come in the new state fiscal year.  One of the big changes and cuts could come if Medicaid is turned into a block grant with less money.

In addition, the state faces the expiration of its “millionaires tax” which, if not extended, would result in the loss of major revenues   Federal budget cuts will put even greater pressure on extending the millionaires tax.  Current estimates are that the state has a budget deficit going into the new fiscal year if the millionaires tax expires at the end of 2017.  If it is extended there will be more money unless federal budget cuts open up another hole.   There is going to be pressure on the state to make up for some of the federal cuts but the state’s tax cap limits spending increases.

The battle over the millionaires tax will be a central issue in the coming state legislative session.  The Fiscal Policy Institute  (FPI) is playing a leading role in arguing to extend the tax and other revenue producing measures.

Here is some other news I have been paying close attention to…

The State Office for the Aging has issued a request for applications for the NORC program (Naturally Occurring Retirement Communities). It was released on December 9 and is due in early March.   This is essentially a re-bidding of the existing program for both high rise traditional NORCs and Neighborhood NORCs.  Preference is given to existing NORCs though some new ones could be funded.

The State Public Service Commission (PSC) at its December 15 meeting voted to prohibit ESCOs from service low-income consumers.   Energy service companies that try to market themselves as lower cost than regular utilities have proven to charge more according to Commission staff.  The prohibition allows the companies to be exempted if they prove they will save the customer money but the PSC doesn’t want low income households especially those getting HEAP (heating aid) to be using public money to pay inflated bills.

Congressman Sam Johnson, the chair of a House of Representatives subcommittee with authority over Social Security has a new bill that would raise the retirement age to 69 and cut benefits for most beneficiaries with a slight increase for the low income.  Others could see cuts of more than 15%.  He says his bill is just to get people talking but it’s clear that he and other Republicans are interested in cuts rather than a balanced approach that increases revenues, especially by raising the earnings cap above $118,000.

Congressman Paul Tonko of the Capital District area told senior advocates at a meeting of the Capital District Alliance for Retired Americans  (CDARA) on Tuesday that he expects Republicans in Congress to push for major cuts in the budget including in Medicaid, Medicare and Social Security.  He urged those present to keep the pressure on, including sending letters to him and others who support them because they need to know that there is a strong outpouring of opposition that they can cite in fighting the proposed cuts.  The national ARA is assailing Paul Ryan’s Medicare “premium support” plan as “Couponcare.”

I appeared on Capital Tonight with Liz Benjamin on December 15 to discuss possible Medicare vouchers.  Here is the link to the video of that show







Hospitals, Insurers Warn Lawmakers About Repealing Affordable Care Act Without Replacement

Conservatives hate Obamacare  (Affordable Care Act) so much they don’t seem to care about the fallout of repealing the program and what impact that will have on the health coverage of over 20 million persons signed up and needing it.  However, they will not be able to so cavalierly ignore the hospital and insurance lobbies which last week issued clear warnings to members of Congress that repealing Obamacare without a replacement will leave both industries facing serious financial uncertainties.

Republicans in Congress are insistent that they will repeal Obamacare as one of their first acts in the new Congress.  However, since they can’t immediately replace it for next year’s coverage year, so they are talking about a delay in the effective date of the repeal, perhaps int0 2019 beyond the next Congressional elections.   Hospitals, insurance companies and economists are warning that without a more immediate replacement, uncertainty would cause massive disruption in the health and insurance markets.  Some of the  most outspoken opponents in Congress though want to replace it as soon as possible and not wait three years.

Democrats meanwhile are saying that the Republicans have had years to come up with an adequate replacement and haven’t done so because the Affordable Care Act is carefully balanced to require all persons to be enrolled in coverage so that there is a pool of younger, healthier people to help finance the insurance coverage for all when needed.   This larger pool also helps to pay for those who have pre-existing conditions and are required to be covered which they weren’t before the Affordable Care Act.

Insurance companies and hospitals have been re-organizing with the idea that many more patients would provide a much higher volume of customers,  so they agreed to accept some cutbacks in Medicare and Medicaid reimbursements.   Now if those enrolled in Obamacare won’t have a guarantee of insurance in the limbo after repeal that Congress is talking about the revenues for these two industries will go down.  One estimate by a hospital association was that hospitals could lose $165 billion with a repeal without an adequately funded replacement.

Republican members of Congress cannot avoid the fact that in many rural districts, hospitals are the major employers.  Even in a mid-size city like Albany, the Albany Medical Center employs over 7600 and is the largest employer after state government.  The hospitals are also key drivers of economic development in their communities as well.  Albany Med has spearheaded a redevelopment of the entire South Park neighborhood in Albany with new offices and apartments for their workers.   On a smaller scale hospitals are playing the same role in smaller, rural areas.  Indeed, the hospitals and schools or “meds and eds” as is said in lobbying circles, are the major source of middle class jobs in smaller population areas.

Hospitals, their unions and the insurance industry are also major campaign donors to state and Congressional candidates.    It may well be that they will have more to say about the fate of Obamacare that the patients.  A grand alliance between patients and health insurers and providers could make it very difficult for Congress to repeal Obamacare and replace it with something which offers less coverage for patients and less dollars for the hospitals and insurance industry.

Medicare Overhaul: Some GOP Senators Not Interested in Ryan’s Vouchers

Republican Senators including Susan Collins of Maine, Lamar Alexander of Tennessee, John McCain of Arizona and Orrin Hatch of Utah have indicated they don’t support privatizing Medicare with vouchers according to Social Security Works, an advocacy organization defending Medicare and Social Security.     House Speaker Paul Ryan said on “60 Minutes” broadcast on Sunday night that he hasn’t even discussed Medicare with Donald Trump yet.   Moving forward to privatize Medicare is not one of one of the first issue priorities for the new administration.    However, it may not even get out of the starting blocks if the four Republicans and perhaps others refuse to support it.

Trump claimed during the campaign on his website that he wouldn’t cut Social Security and Medicare and said he was the only Republican who wouldn’t.    However, he has more recently approved statements saying he wanted to “modernize” Medicare.  And, he has appointed Congressman Tom Price of Georgia who supports Ryan’s plan to head the Department of Health and Human Services which oversees Medicare.

Collins,  the Chair of the Senate Aging Committee, told the Portland Maine Press Herald, “A complete upending of a program that  by and large serves seniors well is not something that appeals to me.”  Senator Alexander, chair of the Health Committee, said that overhauling Medicare was “biting off more than we can chew.” It would only take three Republican senators to go against the Ryan plan to stop it, assuming all the Democratic senators refused to go along as well.

Ryan says that Medicare has to be cut because of a long term financial problem.  Ryan has decided that the program in its current form shouldn’t continue.  He is using funding issues as a an excuse to dismantle the program and turn it over to the private sector but with a Medicare sponsored plan that would probably not be able to compete if it had too many sicker persons in it.

Ryan’s plan would actually keep the traditional Medicare program but put it into competition with private plans with a set “voucher” amount.  How older and sicker beneficiaries would fare under this system is the great concern.  It seems that the Ryan plan is designed to “save” Medicare by making cuts, claiming competition will keep costs down.  However, as with all these types of efforts turning the program over to the private sector, plans will be designed to “cherry pick” the younger, healthier beneficiaries and the sicker ones will not have enough in the voucher.  They will see their out of pocket costs escalate unless there is a reasonable out of pocket cap on total expenses for each beneficiary.

Social Security Works says national senior organizations already have collected 750,000 signatures on petitions calling on Congress to protect Medicare  and Social Security.


Health Care Chaos Coming if ACA is Repealed without Alternate Plan for Coverage

If the Affordable Care Act is repealed as promised by Donald Trump and Republicans in Congress, the delicate balance of the act will undone and the result will be chaos.  The ACA is not a perfect program but repeal could lead to insurance companies pulling out of the program as they see it is being ended or substantially changed.  And, if Medicaid expansion is rolled back and the program turned into a block grant, more chaos will ensue.  On top of all that, the Affordable Care Act included many changes in Medicare as well including higher premiums for those with higher incomes.   Repealing those increases will blow a bigger hole in the Medicare budget. Also, coverage in the “donut hole” for Medicare drug coverage is gradually being increased.  That would have to be saved or costs would go up for beneficiaries.

There is no magic cure for health care.  Republican Congressional leaders want to cut costs but Donald Trump campaigned saying that Obamacare would be repealed and that coverage would be much better.  He offered few specifics but his thoughts might run into deficit hawks in the Republican Congress.    In fact, Trump has talked of the need for universal coverage.  However, the man he is putting in charge of the Department of Health and Human Services is Congressman Tom Price of Georgia who wants to destroy the Affordable Care Act and dismantle Medicaid and Medicare.

It is going to be incumbent on health care advocates to constantly remind lawmakers and the media what the issue is all about, the ability of everyone in this country to have health care at every age.  It will be important to document the  health problems people face and how changes in legislation effect them in very personal terms.    This is always how progress has been made, by having the facts and shining a light on the plight of those in need.     We have to make every member of Congress understand the impact of proposals offered and make sure they respond to needs.  Health care is a pubic service and must be a right and not just another commodity in the marketplace.