Social Security Reform and Medicare Modernization Proposals

Business Roundtable, January 2013

Business Roundtable (BRT) is an association of chief executive officers of leading U.S. companies with more than $7.3 trillion in annual revenues and nearly 16 million employees. BRT member companies comprise nearly a third of the total value of the U.S. stock market.

“Medicare and Social Security were not designed to cope with America’s new demographic realities. CEOs are calling for gradual changes that will modernize these programs and preserve the safety net for future generations of retirees.”
- Gary W. Loveman, Ph.D., Chairman, CEO & President, Caesars Entertainment Corporation, and Chair of BRT’s Health and Retirement Committee

Essential Elements of a Medicare Modernization Proposal

• Protect Medicare for Those Approaching Retirement: Medicare’s age of eligibility should be moved to age 70. However, this will not affect those age 55 or older today.

• Expand Competitive Models of Care: By 2015, Medicare should offer seniors the opportunity to choose among competing and comprehensive private plans and traditional Medicare. The private plans would offer a benefit similar to the existing Medicare program with the flexibility to innovate, sell across state lines, and create greater value strategies. Plans would be required to accept all applicants and would risk adjust the premium to take into account age and health status. The traditional fee-for-service program would compete for enrollment with private plans on cost, quality and a more innovative benefit structure. We believe that competition in the provision of health care to America’s seniors will bring substantial benefits, as it has to most all other categories of personal expenditure. The recent experience of competition in the Medicare Part D program serves as a persuasive indication of the potential savings and improvement in care available through the provision of choice to well-informed seniors.

• Reduce Taxpayer Costs for Upper-Income Beneficiaries: Today, the Part B premium (physician services) and the Part D premium are means-tested and other types of means testing should be explored. By 2015, additional means testing for Medicare services should be considered.

• Protect the Safety Net for Low-Income Americans: Low-income beneficiaries should retain the existing financial support received today. Improvements should be made in care-coordination and a focus on wellness and chronic care management.

(Social Security recommendations available at this link.)

http://businessroundtable.org/studies-and-reports/social-security-reform…

And…

Doctoring Health Care, I

By Barbara Dreyfuss
The American Prospect, December 17, 2006

In early 2006, Glen Barton, the retired CEO of Caterpillar and former head of the Business Roundtable’s health-care task force, said the solution to the health-care crisis is a single-payer system, citing Medicare as a model.

http://prospect.org/article/doctoring-health-care-i

Although the slick brochure from these wizards of industry at the Business Roundtable might make it look like these gentlemen are doing us a great favor by showing us how to save Medicare and Social Security from bankruptcy, their recommendations are, in fact, taking a supercilious approach to diminishing the effectiveness of America’s highly regarded social insurance programs.

This cavalier attitude is expressed in a comment by Caesars’ Gary Loveman, chairman of Business Roundtable’s Health and Retirement Committee that released this report. “Those of us who are in the BRT are paid to try to solve very difficult problems effectively. I would tell you that most of them are a lot harder than this, frankly” (Politico Pulse, Jan. 17).

What do they have in mind for Medicare? They would increase eligibility age to 70 – a disaster for future retirees. They would privatize the traditional Medicare program by throwing it into a market of private plans – a devious scheme to shift health care costs onto the backs of those with greater health care needs. They would also means-test benefits, losing the support of the wealthier individuals who have the strongest political voice, threatening to convert Medicare into a welfare program.

And Social Security? They would also increase Social Security retirement age to 70. And in a stroke of genius, they recommend that Americans simply save more for their retirement. Why didn’t we think of that before?

A word needs to be said about their recommendation to reduce future Social Security cost of living adjustments by converting to the chained-CPI. When individuals are forced into a frugal existence they learn to cut back and do without just so that they will have enough money for basic food and housing at the end of the month, if that. Under chained-CPI, the government assumes that this frugality represents the new, lower consumer price index for this sector, and so they adjust out the savings that the Social Security beneficiaries have accrued merely for the purpose of getting them all of the way through to the end of the month. Pretty cruel.

A decade ago, Glen Barton, Chairman and President of Caterpillar, led the BRT Health and Retirement Committee, currently headed by Gary Loveman. What a contrast. Glen Barton’s experience motivated him to become an advocate of “a single-payer system, citing Medicare as a model.” Lovemen? Well, you read it above. What a difference a decade made.

Class warfare? Ugly label, but…