Article: McCAIN MAVERICK NO MORE

THE PALM BEACH POSTSunday, August 3, 2008

Don't Reform Social Security -- Fix Medicare

By Robert Weiner and John Larmett
(in the Palm Beach Post)

Presidential candidate John McCain has called Social Security funding "a disgrace" and asserted last weekend that "everything is on the table," including his desire to convert at least a portion to "private accounts." However, it's time to end the widespread myth that Social Security is faltering. The program will remain indispensable in enabling the 38 million senior citizens over 65 nationwide and 3 million in Florida to live their lives in dignity.Social Security has been enormously successful-reducing the number of seniors in poverty by 75 percent according to a study by the nonpartisan and highly respected Center on Budget and Policy Priorities. Its future is equally bright. The Congressional Budget Office has reported each of the past five years that Social Security will be fully solvent through 2052, and after that will be 80 percent funded - able to pay more benefits than now. One third of the Bush tax cuts for the wealthy, or one third of the cost of the Iraq War that (hopefully) will be over well before 2052, would cover the possible shortfall. In other words, we have the money. Moreover, after the Baby Boomers reap their Social Security benefit, since those Boomers as parents have had the fewest children ever (2.1 per couple vs. the current 2.7 rate), the system returns to full solvency because it pays out benefits to fewer people. We are only facing a temporary blip. Calls to "reform" Social Security through risky privatization are a cry-wolf, granny-you're-on-your-own, Wall Street giveaway - turning Social Security from a guarantee to a gamble. To match a decade ago plus inflation, the stock market would have to be at 15,000 - it is now 11,000.The real problem is Medicare. At issue are soaring health-care costs driving entitlement to grow at a rate much faster than the U.S. economy over the next several decades. On July 15, Congress passed legislation tinkering at the edges by protecting doctors' Medicare reimbursement rates (and had to override a Bush veto to do it), but that was merely a finger in the dike. The Medicare Board of Trustees' prognosis for the condition of Medicare is grave. According to their annual report, the hospital insurance trust fund is projected to be exhausted by 2019, just as the greatest numbers of Baby Boomers start relying on Medicare for health-care coverage.Medicare revenues and spending are inherently mismatched. Medicare is largely funded through a payroll tax of 2.9 percent and premiums from Supplementary Medical Insurance. Payroll revenues are tied to the rate of business growth and have proved insufficient and undependable. Supplementary Medical Insurance premiums never provided enough money, and they cover only 12 percent of total Medicare costs.Today, more than 85 million Americans rely on Medicare. Over the past 40 years, medical costs have outstripped economic growth by 3''percentage points annually. While dramatic advances in medical technology and patient treatment - such as heart bypass surgery and targeted cancer treatments "" have been a chief driver of this trend with obvious benefits, the price tag is huge. Health-care costs in America have grown exponentially since 1965, when Lyndon Johnson signed Medicare legislation. Health costs in real dollars have skyrocketed from $204 per person to $5,274 annually today. In 1965, medical care primarily involved doctor visits, hospital stays and nursing care. Four decades later, we now have a range of miracle drugs and surgical procedures to treat illnesses that once were unmanageable. The program has grown from $2.7 billion in 1965 to an estimated $372.3 billion this year.There are few, if any, incentives to prudently control the cost of medical treatment. The few steps Congress attempts are being blocked. While the House of Representatives passed legislation to authorize Medicare to negotiate best rates with pharmaceutical companies and to allow patients to import safe, affordable drugs, Senate Republicans and the administration have stopped the bills by throwing out such red herrings as "negotiations won't work" (they do for the VA and every labor-management team that agrees on a contract) or "imports aren't safe" (is Canada a Third World country?). As for providers of medical care, such as doctors, nurses, hospitals, and the drug companies, any desire to restrain costs through cheaper treatment is often overridden by self-interest or the perception that more expensive treatments are in order.A national health insurance plan could absorb and fix Medicare's problems. Failing that, increases in federal payments and possibly higher contributions by wealthy beneficiaries may be needed. All stakeholders - not just the young - need to bear the burden of making Medicare sustainable. We are now a shocking 47th in life expectancy worldwide. The least we can do is give our seniors, and those of us who hope to get there, a fighting chance. It may be tough medicine to swallow, but we can't keep blindly passing Medicare's costs on to future generations or allow its benefits to whittle down to being nearly meaningless. Robert Weiner was spokesman for the White House Drug Policy Office and chief of staff of the U.S. House Aging Committee and Health Subcommittee under Chairman Claude Pepper (D-FL). John Larmett, senior analyst at Robert Weiner Associates, researched Social Security and Medicare issues as Communications Director to Rep. Jim McDermott (D-WA) and Sen. Gaylord Nelson (D-WI). Link to original: http://www.palmbeachpost.com/opinion/content/opinion/epaper/2008/08/03/a1e_iw_weiner_0803.html