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Social program defenders see the roof falling in.

Judith Feder is angry--and fellow defenders of government-financed social programs are raising warning flags.

Feder, dean of the Georgetown Public Policy Institute at Georgetown University, was an Assistant Secretary of Health and Human Services who played a lead role in crafting the Clinton healthcare reform bill. Although that effort failed, her reformist fires still burn bright. Looking at the results of the 2004 elections, she is furious that so few Americans are reacting to the sweeping changes that the Bush administration is proposing for Social Security, Medicare, and Medicaid.

Speaking before an enthusiastic packed session at the American Public Health Association (APHA) annual meeting in November, Feder warned that the Republican proposals threaten the basic concepts that make Social Security and Medicare universally accepted. "Social Security and Medicare are the only federal programs that do not involve means testing. They are entitlements with guaranteed benefits to everyone who is eligible, regardless of income or circumstances. And these benefits are enforceable in the courts."

According to Feder and other analysts who addressed the public health professionals, these principles are lost in the Medicare Modernization Act passed by the previous Congress and in the proposals for changing Social Security. Their principles include competition between private sector insurance and "traditional" Medicare and differing medication benefits for older Americans of varying incomes. The Social Security changes advocated by the administration include proposals that would allow workers in their 30s and younger to invest a portion of their Social Security taxes in private securities, with the conceivable result that people with similar lifelong incomes will receive significantly different Social Security benefits and, depending on their stock market results, potentially far less than they need.

"The administration calls it an 'Ownership Society,'" Feder explained, "but it is more accurate to describe it as an On-Your-Own Society." Robert Blancato, a member of the planning committee for next year's White House Conference on Aging, described the policy changes as "Las Vegas-style" reforms, in which the "entitlement" for Americans would be a gambling chip rather than a defined guaranteed benefit.


Feder's analysis touched on long-term care financing in the changes anticipated for Medicaid. Medicaid had originally offered a defined minimum benefit provided by all states involved. Like Medicare, it was an open-ended commitment in which the states and the federal government provided reimbursement that reflected changing demand among eligible populations. The Clinton administration began to offer states incentives to save money by replacing the defined healthcare benefit with a defined amount of money, with flexibility in defining benefits--the so-called Medicaid waivers. These offers have accelerated under Bush, according to Feder, because state governors typically think in a short time frame. The governors agree to accept a short-term increase in federal funds in exchange for structural changes that might place Medicaid-eligible seniors at risk of more stringent long-term care benefits.

Gerontologist Robert H. Binstock, PhD, professor of Aging, Health, and Society at Case Western Reserve University, offered several explanations for why the elderly did not react angrily at the polls to an obvious assault on the concept of universal benefits:

* Age status is not the most important factor in influencing the votes of the elderly. For example, among the wealthiest 20% of the elderly, Social Security is a relatively minor source of income. Also, more important to the elderly in 2004 were the same issues that influenced other voter populations: concern about "moral values" and antiterrorism safety and security.

* Polls indicate that, although the overwhelming majority of elderly were not thrilled by the Medicare Modernization Act, they were not inclined to punish the administration and its supporters for passing the bill.

* Many older Americans favor the general direction of the Bush administration toward a return to individualism and the free market.

* Given the American belief in the efficiency of the private marketplace, people are unaware that Medicare is by far the more efficient system, with an administrative overhead of approximately 3%, versus the 12% (along with heavy government subsidization) of the private sector.

Binstock suggested that few Americans remember that "life was miserable for most older people until the 1950s." As a result, they do not connect the "defined benefit" guarantees of Social Security and Medicare with the demonstrably vast improvements in quality of life for the elderly.

Rep. Ben Cardin (D-Md.), speaking at another APHA session, warned that legislation that weakens defined benefits for Social Security, Medicare, and Medicaid jeopardizes the long-term existence of those financing systems. "With less shared experience," he said, "there is less sense of common identity and shared concern for the status of the Medicare program." This could be individually costly--according to Cardin, the changes supported by the Bush administration will cap government costs for spending on healthcare for the elderly but not the costs borne by older Americans.

Cardin proposed to sharpen the differences between the Republican and Democratic perspectives on benefits for the elderly by proposing changes that would lower the costs of care while covering more services through Medicare. He promised that he and his Democratic colleagues will offer a three-point plan, with far-reaching changes for long-term care:

1. Reduce the cost of pharmaceuticals by allowing the government to use its buying power to obtain price discounts--an option forbidden by the Medicare Modernization Act--and permitting reimportation of medication from Canada.

2. Create more incentives to purchase long-term care insurance, in part by providing a Medicare safety net for people whose expenses exceed their coverage.

3. Make the health components of assisted living reimbursable through Medicare.

Cardin said he hopes that such proposals will cut through the fog created by the complexity of the Bush administration proposals and the "code words" used by Republicans to camouflage their assaults on the fundamental principles of defined benefits.

Other speakers at the annual meeting, although less supportive of private long-term care insurance, agreed with Cardin that the real differences between the Republican and Democratic concepts of Social Security, Medicare, and Medicaid need to be placed in stark relief. If the Bush proposals prove ascendant, warned Feder, it is time to warn the children of the baby boomers that mom and dad are coming home to live with them.

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Title Annotation:VIEW ON washington
Author:Stoil, Michael J.
Publication:Nursing Homes
Date:Dec 1, 2004
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