Bill Keller Confronts The Entitled Generation: Baby Boomers Beware

For those of you who are not regular readers of the New York Times, it is worth reading Bill Keller's op-ed column, published on July 29, on baby boomers and the need for entitlement reform. The column unleashed a brouhaha garnering over 450 comments, and so he continued the discussion on a blog post, generating an additional 250 comments: the topic hit a nerve. Mr Keller posits that something must be done to address the looming insolvency crises facing both social security and Medicare (Medicaid is noticeably absent from the discussion) and that baby boomers are the ones to do it. He exhorts:

FELLOW boomers, we have done more than our share to make this mess. It’s not our fault that there are a lot of us, but we have resisted any move to fix the system. We should make a sensible reform of entitlements our generation’s cause. We should stiffen the spines of our politicians, and push lobby groups like A.A.R.P. to climb out of the bunker and lead.

In all fairness to Mr. Keller, I think his call to action is a needed reminder that these problems will not fix themselves, but there are facts missing from his analysis which, if not considered, would impede the ability of the body politic to discuss the concept of reform, let alone devise a plan. Additionally, his concern regarding the solvency of  Social Security, although justified, does not inform the debate about what troubles Medicare. The problems are significantly different and combining the topics only serves to rankle extremists on both sides of the political aisle and occludes the possibility of any solutions from being considered.

So where to begin:

The problem of Medicare insovlency is not new. As I've written before, it has been around almost since the program began 47 years ago. A just released report, authored by Patricia Davis for the Congressional Research Service, notes that the insolvency date (currently predicted to occur in 2024) has been postponed a number of times, primarily due to legislative changes that have had the effect of restraining growth on program spending. One such method has been periodic adjustments over the years by Congress to the payroll tax rate. Additionally, other legislative changes (like the Balanced Budget Act of 1997) had the effect of lower expenditures and thus postponing the insolvency date. Although these strategies were sufficient in the past, the current challenges to Medicare solvency, presented by the growing number of beneficiaries and increased health care costs, requires a fresh approach.

If we are truly going to consider the problem of Medicare insolvency, then we must include in the analysis the dysfunctional relationship between Medicare and Medicaid (the nation's chief funding mechanism for long term care services and supports (LTSS)). Because Medicare (generally) pays for medical care and Medicaid pays for long term care (i.e. nursing homes) there is no true coordination of care and services: these are different programs with different agendas. The inefficiencies which result are legendary.

For example, as I posted previously, 9 million Americans are dual-eligibles (both Medicare and Medicaid enrollees) and Medicaid's  role focuses overwhelmingly on long term care services and states (traditionally) have lacked the expertise to manage dual-eligibles medical care. Yet, Medicare (i.e. the federal government) has also paid scant attention to the medical care of this population even though it funds 80 percent of the cost of care ($258 billion in 2011) for this population. The dual eligible population accounts for (about) half of Medicare beneficiaries with chronic conditions. Medicare must begin to pay attention to the cost and care of people with chronic conditions.Also, the Older Americans Act and its singular role in the organization and delivery of social and nutrition services to older adults and their caregivers needs to be incorporated into the discussion. How we can bring the necessary services to older adults to maintain their health and dignity, while permitting them to live in the lowest cost setting will require greater coordination between these three programs.

Finally, the demise of the federal CLASS Act should spur efforts to consider an alternative. Perhaps the time has come to consider a premium supported benefit like Medicare Part B and Part D to address the long term care needs of older adults within the Medicare system and thus avoiding the unnecessary barriers to coordinating services. It's worth considering: sooner rather then later.

First, Thomas Friedman frets in his column about Medicare and then, a week later Mr. Keller explores the same territory in his. I welcome the dialogue, but wonder what is going on at the New York Times that provoked both these columns? What are your thoughts? Learn more on Twitter @aginginchicago.

 

 

 

 

 

Comments

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  • fb_avatar

    What utter nonsense about the insolvency of Social Security, and the manipulative deceitful rationale that SSI is an "entitlement program" by the elitist propaganda machine. What BS!
    The simple and sure way of dealing with the many years away issue is to raise the cap from $110,200 to the next level. Period. Nothing more is required.
    Read the article below, and perhaps the well documented book for facts, not the perpetuated lies the New York Times chooses to publish.
    http://truth-out.org/opinion/item/10701-peoples-pension-author-social-security-cuts-would-hurt-ethnic-families-most
    Artemis Rose

  • fb_avatar
    In reply to Artemis Rose:

    Artemis,

    "The simple and sure way of dealing with the many years away issue is to raise the cap from $110,200 to the next level. Period. Nothing more is required."

    This is nothing more than urban myth, repeated on the internet until people believe it.

    The latest research from SSA says that ELIMINATING the cap will not make the system solvent - much less fixed. Eliminating the cap and capping the benefits will not make the system solvent much less fixed.

    Given the choice, I will take the NY Times over Truth-Out.Org. In this case we don't have to accept either, SSA is the Social Security Administration or are they also an elitist BS propaganda machine.

  • Thank you for your comment!
    Please note that I chose not to directly address Mr. Keller's concern about Social Security: the topic is not germane to my blog. This blog addresses the elder care industry and I found Mr. Keller's column interesting to the extent that it relied on hyperbole rather then on facts.
    There is no need for me to defend either the New York Times or Mr. Keller.

  • fb_avatar
    In reply to Bruce:

    Bruce, I hope that you can explain to me how Social Security doesn't fit into an aging blog.

    Today people as old as 63 expect to have their benefits forcibly cut when the Trust Fund is exhausted. That is under favorably assumptions. Social Security provides less favorable assumptions (but still pretty optimistic) where someone as old as 69 expects to outlive the Trust Fund.

    While Social Security and Medicare are legally separate, both programs depend upon payroll taxes. When medicare reaches insolvency in 2024, the government will have 3 choices :

    Pull payroll taxes away from Social Security

    Pull general taxes away from debt control

    Redefine Medicare benefits.

    These two programs are highly connected.

  • In reply to Joe Economist:

    Mr. Economist,
    Thank you for reading my blog. Although titled "Aging In Chicago" I chose not to comment on Social Security because my professional experience is not directly relevant and I would not inform the debate in any meaningful way. My avoidance of the topic, should not be interpreted as a denial of the importance of Social Security in the lives of millions of older adults.

    I disagree that the two programs are highly connected, other then social security recipients and Medicare beneficiaries are primarily 65 years of age or older. It is important to remember that the Medicare trust fund (Hospital Insurance-HI) funds only the Medicare Part A benefit. Medicare Parts B, C and D are funded by a combination of premium supports and general revenue funds (SMI trust fund). Although, the HI trust fund is projected to become insolvent in 2024, unless the revenue/benefit mix is adjusted, the real concern is funding the SMI trust fund. In the current political climate where government can do-no-good, it will be challenging to find the federal resources (i.e. taxes) necessary to maintain SMI funding as the number of beneficiaries and health care expenses continue to grow.

  • fb_avatar
    In reply to Bruce:

    We are opposite in writing. I don't touch any aspect of medicare.

    Legally these Social Security and Medicare are separate but they are highly connected because they the draw on the same taxbase - like two straws drinking out of one soda. In 2024, if medicare goes to insolvency, Congress will have one of three choices :

    divert payroll taxes away from Social Security
    divert general taxes away from debt control
    Redefine medicare benefits

    If you increase payroll taxes for medicare you by definition make it more difficult to raise payroll taxes for Social Security. Social Security will not be immune to the discussion of how to fix Medicare.

    Chances are you will see this debate manifest itself sooner. When you hear 2033, it means the combined OASDI trust funds. In 2016, disability hits insolvency and Congress will have to vote to move resources out of OAS to DI. This will probably be a contenious discussion as retirees may not like that.

    Virtually all plans to fix Social Security silo the program from the rest of government's problems. We talk about raising the retirement age - but guess what that means that Disability will go broke faster because people who would leave to take retirement, stay on the roles for an extra year or two. We talk about raising the cap, which pulls more taxbase away from debt control. It is easy to fix Social Security, but it is not easy to do without breaking everything else.

  • In reply to Joe Economist:

    Joe,

    I understand your point that since Social Security and the Medicare HI Trust Fund (funding Part A benefits) both rely on payroll taxes, they could be considered connected, I simply disagree that it serves as a useful framework. As I mentioned earlier, payroll taxes are only relevant with regards to the funding of the HI Trust Fund.

    Additionally, there are other alternatives to the three you succinctly present. For example, in the mid-1990's legislative action including modifications in Medicare Part C payments, the establishment of prospective payment systems for certain Part A providers and continuing efforts to combat fraud and abuse. This action prevented Medicare HI Trust Fund from becoming insolvent in 2001.

    Also, it seems to my uninformed eye, that the issue of SSI Disability requires scrutiny. The explosion in the number of beneficiaries of SSI disability is statistically inconsistent with the published disability rates as experienced by private insurers: something is amiss.

    I will investigate whether WordPress allows for comments to be edited. Thank you for the suggestion!

  • fb_avatar
    In reply to Bruce:

    Disability is really out of my area as well. It is my guess that you will find that the explosion may stem from people getting older. Age is positively correlated to usage.

    So my first question is whether the private insurers don't have some qualifiers which create a more favorable insurance pool.

    Both private and SS disability is however out of my depth...

  • fb_avatar

    As a sidenote, you should consider adding edit capacity on your comments.

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    Bruce Lederman

    Bruce Lederman has over 25 years experience in the senior care field as a direct care provider and thought leader. Bruce was CEO and president of his own firm that operated skilled nursing facilities in Illinois. He is a former nursing home administrator and has consulted to numerous elder care providers on planning for strategic growth as well as process improvement. Recently he served as board chair of CJE SeniorLife, a leading non-profit elder care provider in the Chicago area. Bruce is currently employed as chief strategy officer for a multi-facility skilled nursing facility company.

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